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www.MiningNewsNorth.com The weekly mining newspaper for Alaska and Canada's North Week of January 1, 2017
IDM team looks forward to workingwith buyer of large Yukon portfolio
l O U T L O O K 2 0 1 7
KIN
RO
SS G
OLD
CO
RP.
Trucks lined up in the pit at Fort Knox, an Interior Alaska mine that has produced more than 7 million ounces ofgold during its first 20 years of operation. Owned by Kinross Gold, this mine recovered roughly 400,000 ouncesof gold, about 40 percent of the yellow metal produced in Alaska, in 2016.
NORTHERN NEIGHBORSCompiled by Shane Lasley
Auryn has big plans for 2017Auryn Resources Inc. Dec. 22 provided preliminary explo-
ration plans for its Committee Bay gold project in Nunavut and
recently acquired Homestake gold project in northwestern
British Columbia. During its 2016 field season, Auryn identified
17 significant gold-in-till anomalies that represent large-scale
mineralized systems across the 300-kilometer-long (185 miles)
greenstone belt at Committee Bay. Nine of these gold-in-till
anomalies were identified in the southwest region of the
Committee Bay project. Anuri, a 20-kilometer-long (12.5 miles)
north-south trending gold-in-till structural corridor identified in
2015, has been extended to 30 kilometers (19 miles) with this
year’s sampling. In addition to Anuri, a cluster of three new till
anomalies was identified in the vicinity of Quartzite Ridge and
a very well defined till anomaly was identified near Four Hills,
both in the southwestern region of Committee Bay. In the cen-
tral region of the Committee Bay belt, near the 1.6-million-
ounce Three Bluffs gold deposit, six gold-in-till anomalies were
identified. The 2016 sampling program identified two other
large till anomalies south of the Inuk prospect, in the northeast-
ern region of Committee Bay. In 2017, Auryn plans to complete
55,000 meters of drilling to test these 17 targets that span the
enormous Committee Bay property. In addition to its work in
Nunavut, Auryn is planning 15,000 meters of drilling at its
Homestake property in British Columbia’s Golden Triangle, an
asset it acquired through an all-share acquisition of Homestake
Resource Corp. valued at C$8.9 million. According to a 2013
calculation, the three main deposits at Homestake host 604,000
metric tons of indicated resource averaging 6.4 grams per met-
ric ton (124,000 oz.) gold; 48.3 g/t (939,000 oz.) silver; and
0.18 percent (2.4 million pounds) copper. Additionally, these
deposits host 6.77 million metric tons of inferred resource aver-
aging 4.2 g/t (911,000 oz.) gold; 93.6 g/t (20.37 million oz.) sil-
ver; and 0.11 percent (16.3 million lbs.) copper. Auryn is also
planning about 15,000 meters of drilling at its Sombrero,
Huilacollo and Baños del Indio projects in southern Peru. "Each
project provides a significant standalone opportunity for major
discoveries while our portfolio approach significantly lowers
Auryn's overall risk profile,” explained Auryn President and
CEO Shawn Wallace. “2017 will be a year where our technical
and financial teams will capitalize on this foundation and exe-
cute our operational plan to realize the goal of value creation for
all stakeholders and investors."
see NORTHERN NEIGHBORS page 9
Golden 2017 for minersHigher metals prices, lower federal hurdles bodes well for Alaska’s miners
By SHANE LASLEYMining News
Strong metals prices and a pro-jobs businessman
who vows to inject “new American metal into the
spine of this country” preparing to set up his office in
the White House bodes well for Alaska’s mining sec-
tor going into 2017.
While a renaissance of Alaska’s mining sector
may not be at the top of President-elect Donald
Trump’s to-do list, pouring coal on the fire of
America’s economic engine – both literally and figu-
ratively – is.
The figurative coal important to Alaskan miners
includes rolling back burdensome regulations and
leveraging up to US$1 trillion worth of infrastructure
spending in the United States. Both of these facets of
Trump’s economic plan – easing the ability to permit
domestic mines and creating greater demand for the
metals these mines produce – is good news for min-
ers in Alaska and across the nation.
“We’re going to put our great miners and steel
workers back to work,” President-elect Donald
Trump vowed on the campaign trail.
With the metals important to Alaska’s mining sec-
tor – gold, silver, zinc, lead and copper – all enjoying
healthy gains during 2016, this promise from
America’s top executive comes at an opportune time.
Less regulationFrom the U.S. Bureau of Land Management
attempting to put large swaths of federal lands in
Alaska off limits to development to the U.S.
Environmental Protection Agency expanding its reg-
ulatory reach, the mining sector in Alaska and across
the nation has been inundated with tomes of new
policies written at the agency level of the federal gov-
ernment.
see 2017 OUTLOOK page 10
Mining Companies
Kinross Fort Knox/Fairbanks GoldMining Inc.Fairbanks, AK 99712Contact: Anna Atchison – ExternalAffairs ManagerPhone: (907) 490-2218 • Fax: (907) 490-2250E-mail: [email protected]: www.kinross.comLocated 25 miles northeast of Fairbanks,Fort Knox is the largest gold producingmine in Alaska. During 2016, Fort Knoxcelebrated two milestone events, theseven-millionth-ounce of gold producedand the 20-year anniversary of commer-
cial operations.
Usibelli Coal Mine100 Cushman St., Suite 210Fairbanks, AK 99701Contact: Lisa Herbert, Vice President PublicRelationsPhone: (907) 452-2625 • Fax: (907) 451-6543Email: [email protected]: www.usibelli.comUsibelli Coal Mine is headquartered inHealy, Alaska and has 700 million tons ofcoal reserves. UCM produces an average of2 million tons of sub-bituminous coal eachyear.
Service, Supply & Equipment
Alaska Rubber & Rigging Supply5811 Old Seward Hwy.Anchorage, AK 99518Contact: Mike Mortensen, GeneralManagerPhone: (907) 562-2200Fax: (907) 561-7600E-mail: [email protected]: www.alaskarubber.com.Alaska’s largest supplier of hydraulic andindustrial hose sold in bulk or assembled tospec. We also stock a large selection orwire rope, crane rope, lifting and trans-portation chain, sold in bulk or assembledto spec. We fabricate synthetic liftingslings, and supply shackles & rigging hard-ware. We sell and perform field installs ofconveyor belting. We are Arctic Gradeproduct specialists. We sell and service awide variety of hydraulic, lubrication, fuel-ing and pressure washing equipment. Wesell high pressure stainless instrumentationfittings and tube, sheet rubber, v-belts,pumps, Enerpac equipment, Kamlocks,plumbing fittings, and much more. Weperform hydro testing up to thirty thou-sand psi, & pull testing up to 350 thousandpounds. All testing comes standard withcertification & RFID certification trackingcapabilities.
Alaska Steel Co.6180 Electron DriveAnchorage, AK 99518Contact: Joe Pavlas, outside sales managerPhone: (907) 561-1188Toll free: (800) 770-0969 (AK only)Fax: (907) 561-2935E-mail: [email protected] Full-line steel and aluminum distributor.Complete processing capabilities, statewideservice. Specializing in low temperaturesteel and wear plate.
Arctic Wire Rope & Supply6407 Arctic Spur Rd. Anchorage, AK 99518Contact: Mark LamoureuxPhone: (907) 562-0707Fax: (907) 562-2426Email: [email protected]: www.arcticwirerope.comArctic Wire Rope & Supply is Alaskalargest and most complete rigging sup-ply source. Our fabrication facility islocated in Anchorage. We specialize incustom fabrication of slings in wire rope,synthetic webbing/yarn, chain and rope.In addition, we offer on-site inspectionservices. We carry a large inventory oftire chains for trucks and heavy equip-ment, chain hoists and rope.
Austin Powder CompanyP.O. Box 8236Ketchikan, AK 99901Contact: Tony Barajas, Alaska managerPhone: (907) 225-8236Fax: (907) 225-8237
E-mail: [email protected] site: www.austinpowder.comIn business since 1833, Austin Powder pro-vides statewide prepackaged and onsitemanufactured explosives and drilling sup-plies with a commitment to safety andunmatched customer service.
Calista Corporation5015 Business Park Blvd.Suite 3000Anchorage, AK 99503Phone: (907) 275-2800Fax: (907) 275-2919Website: www.calistacorp.comCalista is the parent company of morethan 30 subsidiaries. In terms of landarea and Shareholder base, Calista is thesecond largest of the Regional AlaskaNative corporations established underANCSA in 1971. Like us on Facebook(http://www.facebook.com/calistacorpo-ration) and follow us on Twitter(http://twitter.com/calistacorp).
CONAM Construction Co.301 W. Northern Lights Blvd., Ste 300Anchorage, AK 99503Contact: Dale Kissee, PresidentPhone: (907) 278-6600Fax: (907) 278-4401Email: [email protected] Website: www.conamco.comLeading provider of specialized contract-ing and EPC services delivering heavyindustrial infrastructure solutions to theoil and gas, mining and power industriesthroughout the State of Alaska. CONAMConstruction Co. is an operating unit ofQuanta Services (NYSE:PWR).
Construction Machinery Industrial, LLC 5400 Homer Dr.Anchorage, AK 99518Phone: (907) 563-3822Fax: (907) 563-1381Website: www.cmiak.comFairbanks officePhone: 907-455-9600 Juneau officePhone: 907-780-4030 Ketchikan officePhone: 907-247-2228 Sales and service for heavy equipment forconstruction, logging, aggregate, mining,oilfield and agricultural industries through-out Alaska. CMI represents more than 40vendors, including Volvo, Hitachi, AtlasCopco, and Ingersoll-Rand.
Cruz Construction, Inc.7000 E. Palmer-Wasilla Hwy. Palmer, Alaska 99645Contact: Dave Cruz, President, or Jeff Miller, Vice President ofOperations Phone: (907) 746-3144 Palmer or (907) 279-3144 AnchorageFax: (907) 746-5557E-mail: [email protected] flexibility and dedication haveenabled us to become a top provider for
Shane Lasley PUBLISHER & NEWS EDITOR
Rose Ragsdale CONTRIBUTING EDITOR
Mary Mack CEO & GENERAL MANAGER
Susan Crane ADVERTISING DIRECTOR
Heather Yates BOOKKEEPER
Marti Reeve SPECIAL PUBLICATIONS DIRECTOR
Steven Merritt PRODUCTION DIRECTOR
Curt Freeman COLUMNIST
J.P. Tangen COLUMNIST
Judy Patrick Photography CONTRACT PHOTOGRAPHER
Forrest Crane CONTRACT PHOTOGRAPHER
Tom Kearney ADVERTISING DESIGN MANAGER
Renee Garbutt CIRCULATION MANAGER
Mapmakers Alaska CARTOGRAPHY
ADDRESS • P.O. Box 231647Anchorage, AK 99523-1647
NEWS • [email protected]
CIRCULATION • 907.522.9469 [email protected]
ADVERTISING Susan Crane • [email protected]
FAX FOR ALL DEPARTMENTS907.522.9583
NORTH OF 60 MINING NEWS is a weekly supplement of Petroleum News, a weekly newspaper.To subscribe to North of 60 Mining News,
call (907) 522-9469 or sign-up online at www.miningnewsnorth.com.
Several of the individualslisted above are
independent contractors
North of 60 Mining News is a weekly supplement of the weekly newspaper, Petroleum News.
D I R E C T O R YCompanies involved in Alaska andnorthwestern Canada’s mining industry
continued on next page
9NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF JANUARY 1, 2017
the heavy civil construction and resource developmentindustries.
Dyno Nobel Inc. 4730 Business Park Blvd. Anchorage, AK 99503Contact: Matt Budin, Sr. Account MangerPhone: (907) 644-3966Fax: (801) 321-6773Email: [email protected]: www.dynonobel.com
GCI Industrial Telecom Anchorage:11260 Old Seward Highway Ste. 105Anchorage, AK 99515Phone: (907) 868-0400Fax: (907) 868-9528Toll free: (877) 411-1484Web site: : www.gci.com/industrialtelecomRick Hansen, Sr. [email protected] Mark Johnson, Sr. Business Development [email protected] Deadhorse:DAC Offices Deadhorse, Alaska 99734Phone: (907) 771-1090Houston, Texas:8588 Katy Freeway, Suite 226Houston, Texas 77024Phone: (713) 365-3154GCI Industrial Telecom provides innovative solutions tothe most complex communication issues facing indus-trial clientele. We deliver competitive fully managedvoice, video and data services, reputable expertise andsafely operate under the most severe working condi-tions. We understand remote project management andwork as an integrated part of the project team toensure success. GCI — your best choice for full life cycle,expert, proven, industrial communications.
Greer Tank and Welding Inc. 3140 Lakeview DrivePO Box 71193Fairbanks, AK 99707Contact: Mark Greer, General ManagerPhone: (907) 452-1711Fax: (907) 456-5808Email: [email protected] offices: Anchorage, AK; Lakewood, WAWebsite: www.greertank.comGreer Tank & Welding are the premier tank and weldingspecialists of Alaska and Washington. In business for over57 years, they have a long history of providing an array ofproducts and services for all contracting and custom fabri-cation needs – all from their highly trained and experi-enced staff.
Judy Patrick Photography511 W. 41st Ave, Suite 101Anchorage, AK 99503Contact: Judy PatrickPhone: (907) 258-4704
Fax: (907) 258-4706E-mail: [email protected]: www.judypatrickphotography.comCreative photography for the resource developmentindustry.
Last Frontier Air Ventures1415 N Local 302 Rd., Ste CPalmer, AK 99645Contact: Dave King, ownerPhone: (907) 745-5701Fax: (907) 745-5711Email: [email protected]: www.LFAV.comHelicopter support statewide for mineral exploration,survey research and development, slung cargo,video/film projects, telecom support, tours, crew trans-port, heli skiing. Short and long term contracts.
LyndenAlaska Marine LinesAlaska West ExpressBering Marine CorporationLynden Air CargoLynden InternationalLynden LogisticsLynden TransportAnchorage, AK 99502Contact: Jeanine St. JohnPhone: (907) 245-1544Fax: (907) 245-1744Toll Free: 1-888-596-3361E-mail: [email protected] is a family of transportation companies with thecombined capabilities of truckload and less-than-truckloadtransportation, scheduled and charter barges, rail barges,intermodal bulk chemical hauls, scheduled and charteredair freighters, domestic and international air forwarding,international ocean forwarding, customs brokerage, sani-tary bulk commodities hauling, and multi-modal logistics.
Mappa Inc. 1956 Richardson Hwy. North Pole, AK 99706Contact: Stefan Mack, EngineerPhone: (907) 488-1266Fax: (907) 488-0772E-mail: [email protected]: ww.mappatestlab.comContractor Quality Control, asphalt, soil, concrete &masonry testing and special inspection.
NRC Alaska (formerly Emerald Alaska)425 Outer Springer Loop Rd., Palmer, AK 99645Contacts: Shaun Tucker, business development managerW. Paul Nielsen III, director of sales & marketingPhone: (907)258-1558 Fax: (907) 569-5353 Email: [email protected] ; [email protected] Offices: 619 East Ship Creek Ave, Ste. 309,Anchorage, AK 99501Website: www.nrcc.comNRC Alaska is unrivaled in the management ofHazardous Wastes, automotive fluids and recovered
spilled products. NRC is located in Anchorage,Fairbanks, Palmer, Deadhorse, and Kenai.
Pacific Rim Geological Consulting, Inc.P.O. Box 81906Fairbanks, AK 99708Contact: Thomas Bundtzen, presidentPhone: (907) 458-8951Fax: (907) 458-8511Email: [email protected] mapping, metallic minerals exploration andindustrial minerals analysis or assessment.
Sourdough Express Inc.600 Driveway St. Fairbanks, AK 99701Contact: Brian Skinner, VP Phone: (907) 243-2545Other Office: (800) 488-2654Website: www.sourdoughexpress.comSourdough’s services include trucking of all types.Our equipment fleet consists of Lowboys, PneumaticBulkers, Vans, and Flatbeds. We also Lease/SellConnex Containers.
STEELFAB2132 Railroad Ave. Anchorage, AK 99501Contact: Ron Doshier – Business Development ManagerPhone: (907) 264-2813Fax: (907) 276-3448E-mail: [email protected] is the largest Alaskan-owned Steel ServiceCenter, Fabricator and Coating Facility in the state. Itprovides Stock Steel Products, Special Design ItemsFabricated, Coating (paint & metalizing) and Recoating.
TTT Environmental LLC 4201 “B” St.Anchorage, AK 99503Contact: Tom Tompkins, General ManagerPhone: 907-770-9041Fax: 907-770-9046Email: [email protected]: www.tttenviro.comThe preferred source for instrument rentals, sales, serv-ice and supplies. We supply equipment for air monitor-ing, water sampling, field screening, PPE and more.
Taiga Ventures 351 East 92nd Fairbanks, AK 99515Contact: Mike Tolbert, presidentPhone: 907-452-6631Fax: 907-451-8632Other offices: Airport Business Park 2000 W. International Airport Rd., #D-2Anchorage, AK 99502Phone: 907-245-3123Email: [email protected]: www.taigaventures.comRemote site logistics firm specializing in turnkeyportable shelter camps – all seasons.
AuRico agrees to pay a premium for KiskaAuRico Metals Inc. Dec. 23 announced that it has entered into a definitive agree-
ment to acquire all of the issued and outstanding securities of Kiska Metals Corp.
Under the terms of the agreement, Kiska shareholders will receive 0.0667 AuRico
common shares and C1.6 cents in cash for each Kiska share held. Based on AuRico's
Dec. 22 closing share price, this values the Kiska shares at roughly C7.8 cents each, or
roughly a 95 percent premium to Kiska shares on Dec. 22. The total value of this
arrangement is about C$9.6 million. AuRico and Kiska’s portfolios are complimentary,
as both companies have a combination of mining royalty and mineral exploration
assets in Canada. Toronto-based AuRico’s gold royalty assets include a 1.5 percent net
smelter royalty on the Young-Davidson gold mine; a 0.25 percent NSR royalty on the
Williams Mine at Hemlo; and a 0.5 percent NSR royalty on the Eagle River Mine – all
in Ontario. AuRico also has a 2 percent NSR royalty on the Fosterville Mine and a 1
percent NSR royalty on the Stawell Mine, both in Australia. Aside from its royalty
portfolio, AuRico owns the Kemess, an advanced gold-copper project in northern
British Columbia. AuRico recently released a feasibility study for Kemess and is work-
ing towards gaining the permits needed to develop an underground mine there. One of
Kiska’s primary assets is Kliyul, an advanced copper-gold exploration project about 50
kilometers (30 miles) south of Kemess. Additionally, Kiska's portfolio consists of six
existing royalties and five exploration projects in North America, including the Copper
Joe project in Alaska.
IDM finds buyer for Yukon gold portfolioIDM Mining Ltd. Dec. 21 said it has entered into a non-binding letter of intent to
sell its extensive portfolio of Yukon properties to StrikePoint Gold Inc., a Vancouver,
B.C.-based exploration company with gold properties in Ontario and Manitoba. The
Yukon portfolio to be vended to StrikePoint includes 282,000 hectares (696,800 acres)
of Yukon mining claims IDM acquired from Oban Mining Corp. late in 2015. This
extensive portfolio consists of 51 properties previously held by Ryan Gold Corp.
“StrikePoint is very enthusiastic about the acquisition of the Yukon portfolio from
IDM; the properties have seen C$25 million in exploration expenditures,” said
StrikePoint CEO Shawn Khunkhun. To acquire the properties, StrikePoint has agreed
to pay C$150,000 in cash and issue 10 million company shares valued at C38.5 cents.
In addition to the C$4 million of cash and shares, StrikePoint will be required to invest
C$1.5 million for exploration at the Yukon properties by the end of 2017. “IDM is
looking forward to being a substantial equity holder of StrikePoint and the Yukon port-
folio being advanced during 2017,” said IDM President and CEO Rob McLeod. IDM
will also be granted certain anti-dilution rights, the right to appoint two members of
StrikePoint’s board of directors and a right of first refusal over any proposed vending
of the Yukon properties during the two year period following closing.
TerraX ready to drill Con Mine extensionsTerraX Minerals Inc. Dec. 21 posted results from surface mapping and prospecting
on the Southbelt property of the Yellowknife City Gold Project. Southbelt is about five
kilometers (three miles) south of the city of Yellowknife and extends from the mine
leases of the historic Con Mine, where more than 6 million ounces of gold was pro-
duced duringr a 60 year mine life. TerraX says extensions of several mineralized trends
previously mined at Con, including the namesake Con Shear, which appears to extend
up to five kilometers (three miles) onto the Southbelt property. Other structures have
been traced on surface for about 1,000 meters onto the Southbelt property. Sampling of
these structures in 2015 returned up to 94.9 grams per metric ton gold and grab sam-
ples collected in 2016 returned 33.6 g/t and 16.4 g/t gold. “The extension of shear and
vein systems with known historical production on to our Southbelt property make for
very exciting targets for discovery of significant gold deposits,” said TerraX Chairman
and CEO Joe Campbell. “The Southbelt contains multiple high-grade, high priority tar-
gets with very high potential for discovery.” To further test this potential, TerraX has
applied for the permits required to begin drilling on Southbelt during the first quarter of
2017. The application is for a five-year permit that covers the entire Southbelt property,
giving TerraX maximum exploration flexibility for making a discovery. Subsequent to
the 2016 mapping and sampling programs, TerraX received the results of a LIDAR
survey flown over Southbelt. TerraX said the high-resolution imaging from LiDAR
flown in 2014 has proven valuable in defining and extending mineralized trends on the
Northbelt properties, and it is expected to greatly enhance TerraX’s exploration efforts
on Southbelt moving forward. Northbelt is a large land package that extends north
from Yellowknife where TerraX has made a number of gold discoveries in recent
years. TerraX says the six veins and shear zones it has discovered along this 10-kilo-
meter- long (six miles) core area of Northbelt – Mispickel, Sam Otto, Barney, Herbert-
Brent, 20 Shear and Crestaurum – are indicative of a larger mineralized system on the
property. l
continued from page 7
NORTHERN NEIGHBORS
Rolling back many of these regulations
that are hampering job growth due to the
pressure they are putting on mining, farm-
ing, energy production, manufacturing and
other industries in the United States is one
of Trump’s top priorities when he takes
office.
“Regulations have grown into a mas-
sive, job-killing industry – and the regula-
tion industry is one business I will put an
end to,” the president-elect vowed on the
final leg of his successful bid for the White
House.
The top regulations to be reviewed by
the Trump administration are:
•Environmental Protection Agency’s
Clean Power Plan, which is aimed at reduc-
ing carbon emissions from coal and natural
gas plants;
•EPA’s Waters of the United States rule,
a highly contentious regulation that would
substantially increase the regulator’s juris-
diction and is expected to be especially
burdensome for resource development in
the U.S.; and
•Department of Interior’s moratorium
on coal leases on federal lands, aimed at
restricting future coal available from the
U.S.
“My plan will embrace the truth that
people flourish under a minimum govern-
ment burden, and it will tap into the incred-
ible unrealized potential of our workers
and their dreams,” the president-elect
explained.
Higher zinc demandIn addition to removing some of the reg-
ulatory roadblocks, Trump proposes to
transform “America’s crumbling infra-
structure into a golden opportunity for
accelerated economic growth.”
These infrastructure plans are particu-
larly good news for zinc.
Roughly half of the zinc mined in the
world is used for galvanizing, a process of
applying a protective zinc coating to steel
or iron, to prevent rusting. Restoring
America’s crumbling infrastructure would
require guardrails, light poles, culverts,
bridges, cell towers and many other con-
struction materials made from galvanized
steel.
The Red Dog Mine in Northwest Alaska
and the Greens Creek Mine on the
Southeast Panhandle produce roughly
635,000 metric tons (1.4 billion pounds) of
zinc per year, or roughly 5 percent of the
global supply of this galvanizing metal.
This makes zinc the highest valued
metal produced in Alaska, a value that will
increase sharply this year thanks to soaring
zinc prices.
Starting off 2016 at around US72
cents/lb, the zinc price rocketed to a high of
US$1.27/lb. in December, a 76 percent
increase. While the galvanizing metal has
been climbing steadily this year, it shot up
12 percent in the two weeks following the
U.S. presidential election.
Pebble leverageWhile the price of copper has not rock-
eted to the same degree as zinc, the elec-
tricity conducting metal has climbed nearly
24 percent, from US$2.17/lb at the begin-
ning of 2016 to a high of US$2.69 earlier
this month.
Though copper currently is not mined in
Alaska to any economically significant
degree, the state hosts world-class copper
projects set to potentially enter the permit-
ting process during the Trump presidency.
The widest renowned and of these proj-
ects, Pebble, is set to benefit from both ris-
ing copper prices and an administration
that is determined to pull in the reigns on
federal regulatory agencies.
According to the latest resource esti-
mate, Pebble hosts 6.44 billion metric tons
of measured and indicated resources aver-
aging 0.4 percent (56.76 billion lbs) cop-
per, 0.34 grams per metric ton (70.38 mil-
lion ounces) gold, 240 parts per million
(3.4 billion lbs) molybdenum and 1.66 g/t
(343.6 million oz) silver.
If developed, this deposit would provide
enough ore to last several decades. Due to
this enormous size, current metals prices
are less of a factor in determining when to
develop this world-class deposit situated
on state lands. The bigger issue is a clear
path to permitting a mine that is of the scale
to due this enormous deposit justice while
protecting the environmental integrity of
the Bristol Bay region where it is located.
"Northern Dynasty and EPA share a
strong conviction that any mine developed
at Pebble must meet the highest environ-
mental standards, and protect the fisheries
resources of southwest Alaska, or it should
not be permitted," said Ron Thiessen, pres-
ident and CEO of Northern Dynasty, the
Canadian mining junior that owns the
Pebble project.
Pebble Limited Partnership, a company
formed to develop Pebble, has been in a
long legal fight with EPA over the environ-
mental agency’s efforts to use Section 404
(c) of the U.S. Clean Water Act to prevent
Pebble from entering the permitting
process.
In late October, Pebble and EPA decided
to settle their dispute outside of the court-
room, a negotiation that is expected to
result in the regulator backing away from
its pre-emptive action and allow the enor-
mous copper project to enter the permitting
process.
The hopeful Pebble developer gained
added leverage with the Trump victory.
Scott Pruitt, president-elect’s choice to
lead EPA, has a history of fighting back
against the agency’s overreach during his
tenure as Oklahoma’s attorney general.
The out of court negotiations between
Pebble Partnership and EPA were original-
ly slated to be finalized by the end of the
year. A settlement, however, now has been
delayed until early in 2017 and may wait
until the new administration takes over.
A clear path to gaining the permits
needed to develop Pebble could open the
door for a partner with the deep pockets
necessary to invest the billions of dollars
needed to put the enormous copper mine
into production.
Gold pressuredRoughly 1 million ounces of gold was
mined in Alaska in 2016, when you com-
bine the gold produced at four of Alaska’s
large metal mines – Fort Knox, Pogo,
Kensington and Greens Creek – and the
placer aurum from the family-scale opera-
tions across the state. This comes to about
US$1.25 billion of the precious metal at the
year’s average of US$1,250 per troy ounce.
Starting off 2016 at around
US$1,080/oz, gold made strong gains early
in the year, climbing more than 25 percent
to US$1,350/oz. at mid-year before giving
up much of these gains as the year came to
a close.
Surprisingly, much of the loss has come
in the seven weeks since the American peo-
ple elected Trump as the next U.S.
President.
Analysts were nearly unanimous in their
forecasts that a successful White House bid
by the business mogul and reality TV star
would inject political uncertainty into the
markets and push gold higher. The safe-
haven metal, however, has fallen steadily
since the election, from US$1,281 on Nov.
9 to US$1,158 on Dec. 29.
While gold has retreated from its mid-
year highs, it is still up 7 percent on the
year, marking the first such annual gain
since 2012.
Most analysts are expecting continued
downward pressure on gold early in 2017
and then modest gains as the year wears on.
Swiss bank UBS is among the most
bullish gold prognosticators, calling for the
safe-haven asset to average US$1,350/oz.
in 2017.
Silver uptickSilver, the primary metal mined at
Greens Creek Mine and a tertiary metal at
Red Dog Mine made even healthier per-
centage gains in 2016, rocketing 48 percent
from US$14/oz. to US$20.70/oz. in July.
Sometimes referred to as “poor man’s
gold”, silver too lost its luster as the year
wore on, settling to US$16/oz. on Dec. 28,
a 14 percent increase for the year.
According to early calculations by
North of 60 Mining News, Greens Creek
and Red Dog produced around 16 million
oz. of silver in 2016. With silver prices
averaging US$17.15/oz, this comes to
nearly another US$275 million of metal
production for Alaska this year.
While silver trades primarily as a pre-
cious metal, it does have a number of
industrial applications such as batteries,
LED chips, solar panels and semiconduc-
tors. Some analysts believe these uses, cou-
pled with Trump’s fiscal policies, could
drive the silver price higher.
“Clearly, any uptick in infrastructure
spending resulting from the recent U.S.
election could benefit silver's industrial
demand side,” an analyst at the Canadian
Imperial Bank of Commerce wrotein a
recent report.
Adding to this upward pressure from
demand, global silver supplies are expect-
ed to continue to fall in 2017, which could
add further upside pressure to this precious
industrial metal.
UBS looks for silver to average
US$18.60 next year. l
10NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF JANUARY 1, 2017
January 23-26, 2017
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2017 OUTLOOK
