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COEUR D’ALENE MINES CORP.
A worker hoses down a mined stope at the Kensington gold mine inSoutheast Alaska. Late in 2011, Coeur d’Alene Mines Corp. undertookseveral key initiatives aimed at improving this underground mine’s safetyand production profile, including an underground paste backfill plant thatprovides access to stopes in previously mined areas. This refitting ofKensington is a microcosm of company-wide transformations set in motionsince Mitchell Krebs took the helm at Coeur as president and CEO. Page 3.
A special supplement to Petroleum NewsWEEK OF
April 28, 2013
5 Miners get their day in Juneau Alaska legislators forward an array of mining-related bills to governor
11 Schaft Creek reaches tipping point Deadline looms for Teck to buy back control of large NW BC porphyry
12 Peel plan draws global response Yukon receives range of sentiments on future of wilderness watershed
By SHANE LASLEYMining News
Churning out 25,506 ounces of gold dur-ing the first three months of 2013,
Coeur d’Alene Mines Corp.’s retooledKensington Mine in Southeast Alaska is onpace to surpass100,000 ounces ofproduction in 2013.
Late in 2011,Coeur cut processingrates in half to under-take several key ini-tiatives aimed atimproving the mine’ssafety and productionprofile.
“We went througha pretty massive retooling of Kensingtonover the past year-and-a-half, and I ampleased to see the results from that,” CoeurPresident and CEO Mitchell Krebs said dur-ing an April 15 presentation at the EuropeanGold Forum in Zurich, Switzerland.
This refitting of Kensington is a micro-
cosm of the companywide transformationsset in motion at Coeur d’Alene Mines sinceKrebs’ ascent from chief financial officer topresident and CEO in 2011.
“We have really taken a major overhaulof the business; this work is ongoing andwill continue. The status quo, in our view, isjust not acceptable and so we have workedat retooling our business over the past cou-ple of years,” Krebs told the European Goldaudience.
Retooled KensingtonIn the three years prior to Krebs taking
the helm, Coeur brought three new minesinto production. Getting these fledglingoperations running safely and efficiently hasbeen a top priority of the new CEO.
“Job No. 1 for us is to strive for improvedsafety, environmental and community rela-tions initiatives; those are the key buildingblocks to any sustainable mining company,”Krebs explained. “Above and beyond that,where we need to improve is in our opera-
3NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF APRIL 28, 2013
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� A L A S K A
RetooledKensington;retooled CoeurImproved efficiencies at refitted SE Alaska mine is a microcosm of the transformations under way at the rebranded Coeur Mining
see COEUR MINING page 4
MITCHELL KREBS
CO
EUR
D’A
LEN
E M
INES
CO
RP
Focused on increasing the value at its existing operations, Coeur d’Alene Mines Corp. plansto spend roughly US$40 million on exploration in 2013, including a US$3.5 million programaimed at adding low-cost silver-gold reserves and resources by drilling historic stockpiles atits Rochester mine in Nevada.
4NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF APRIL 28, 2013
tional consistency in this set of operations that we have; allof which are new in the last five years.”
While the San Bartolomé silver mine in Bolivia, thePalmarejo silver-gold mine in Mexico had already workedthrough much of their growing pains by the time Krebs tookover, the kinks still needed to be worked out of Kensington,the youngest of the operations.
Situated some 45 miles (72 kilometers) north of Juneau,the Kensington gold mine began commercial production inJuly 2010. During 2011, the underground operation pro-duced 88,420 ounces of gold at cash operating costs ofUS$1,088 per ounce.
Unsatisfied with this performance, Coeur made the deci-sion to invest the time and money needed to improve theproduction profile and to position the operation to deliversustainable and consistent performance over the longer term.
To carry out much of the work, the rate of production atthe underground operation had to be reduced 50 percent atthe beginning of 2012 and gradually scaled up to full capac-ity as the year progressed.
One of the key initiatives during this scaled back produc-tion was the acceleration of underground developmentaimed at creating more working faces and greater opera-tional flexibility. The company also implemented an under-ground paste backfill plant and related distribution system,providing access to stopes located in previously mined areas;upgraded the electrical infrastructure; and completed con-struction of several new surface facilities – including a newadministrative building, warehouse, worker dormitory, andexpanded kitchen and dining facilities.
The slump in production resulted in skyrocketing operat-ing costs.
During the first three months of 2012, Coeur recovered7,444 oz of gold at Kensington at cash operating costs ofUS$2,709/oz. Returning to full-scale production of about1,500 metric tons per day in April, the Southeast Alaskaoperation improved to 21,572 oz of gold at cash costs ofUS$1,348/oz during the second quarter.
For the remainder of 2012, the production profile contin-ued to improve. During the third quarter, Kensingtonchurned out 24,391 oz of gold at operating costs averagingUS$1,298/oz and during the final three months of the year,the mine’s output hit 28,717 oz with costs averagingUS$1,065/oz.
All told, Kensington produced 82,125 oz gold in 2012. Coeur anticipates the Southeast Alaska mine will contin-
ue the production pace set in the fourth quarter and produce108,000–114,000 oz gold at US$900-US$950/oz in 2013.Though the company has not disclosed the cost of the 25,206oz of gold produced at Kensington in the first quarter of2013, indications are they are within this guidance.
Coeur is anticipating further increases in gold productionat Kensington in the second half of 2013 due to projectedimproved grades and higher throughput rates.
Squeezing valueKensington is not the only operation in Coeur’s portfolio
getting upgrades. Krebs, who was an investment banker inNew York before joining Coeur in 1995, also has identifiedopportunities to get a better return from the company’s oper-ations in Nevada and Bolivia.
“We love to try to squeeze more value out of existingoperations; those are very high return opportunities for the
company,” he told the crowd gathered in Zurich.Coeur sees this type of high-return opportunity at its
Rochester silver-gold mine. The Nevada operation produced2.8 million oz silver in 2012 at US$9.62/oz after a by-prod-uct credit for the 38,066 oz gold recovered.
With the objective of driving per-ounce recovery costsdown and cash-flow up, Coeur is investing roughly US$35million to increase crusher capacity and expand the heapleach facility at Rochester. These upgrades are expected toincrease the mine’s annual output to around 4.7 million ozsilver and 45,000 oz gold.
“Production at Rochester is expected to increase 35-50percent this year versus 2012 levels, which we anticipatewill drive cash operating costs down and significantlyincrease the mine’s cash flow,” Krebs said upon release ofCoeur’s 2012 financial results. “We are enthusiastic aboutfuture opportunities to expand production at Rochester evenfurther that could make this asset the second largest produc-er in our portfolio.”
The company is also expanding the mill capacity at itsSan Bartolomé operation in Bolivia by about 15 percent. Themine produced 5.9 million oz silver in 2012 at aboutUS$11.76/oz. The mill expansion is expected to maintain aproduction rate of around 6 million oz per year for anotherseven years while reducing per-ounce operating costs.
“We expect 2013 to be a strong year for Coeur, support-ed by significant expected growth at Rochester, a full year ofsteady state operations at Kensington, and stable productionat Palmarejo and San Bartolomé,” Krebs added.
High-return explorationWhen it comes to squeezing value out of its assets, explo-
ration is one area Krebs sees the company getting the bestbang for its buck.
“We have been investing heavily in exploration, mostlyaround our existing mine sites,” the CEO explained. “Lastyear was our company’s largest year from an explorationstandpoint – around US$40 million and this year it will beabout the same. On that US$40 million last year we gener-ated about 110 million new silver-equivalent ounces, so thatis less than 40 cents an ounce.”
Roughly 88 percent of the 190,500 meters of drilling in2012 was devoted to the operations.
“We find it very hard to beat the returns that we can gen-erate from exploration dollars being put back into the groundnear our processing facilities where we have invested soheavily over the years,” Krebs explained.
Coeur’s US$40 million exploration program for 2013 isfocused on expanding the existing silver-gold reserves andresources at Palmarejo, including the nearby Guadalupe andLa Patria deposits (US$15 million); adding high-grade goldresources at Kensington (US$8.6 million); drilling historicstockpiles at the Rochester mine in Nevada to add low-costsilver-gold reserves and resources (US$3.5 million);expanding the size of the silver-gold resources at theJoaquin project in Argentina (US$3.3 million); continuedsilver resource expansion at San Bartolomé (US$700,000);and exploring for new silver and gold deposits across all ofits properties (approximately US$9 million).
Preciosa opportunityWith Kensington and the rest of its operations set to
deliver consistent operational results over the longer term,Coeur now has grabbed a new asset to squeeze value from.On April 16, the miner announced it has completed theacquisition of Orko Silver Corp.
Orko’s primary asset, the La Preciosa project in Mexico,
has an indicated resource of 29.6 million metric tons aver-aging 104 g/t (99 million ounces) silver and 0.2 g/t (190,000ounces) gold, and an inferred resource of 47.7 million met-ric tons averaging 86 g/t (132 million ounces) silver and 0.16(245,000 ounces) gold. This resource is based upon a 25 g/tsilver cut-off grade and contained within two pit shells.
“It is one of the world’s largest undeveloped silverdeposits,” Krebs explained. “It is in a great location inMexico – in the state of Durango about 75 miles out of thecity of Durango – near infrastructure and should be a veryattractive project from a construction and logistical stand-point.”
“It should produce 7-10 million ounces of silver a yearover a very long mine life of at least 15 to 20 years, initial-ly,” he added.
The Coeur CEO said this silver stream would help bal-ance the company’s portfolio, which is weighted towardsPalmarejo. During 2012, Palmarejo accounted for some 45percent of the company’s 2012 silver and gold productionand 69 percent of its operating cash flow.
A second Mexico operation will also offset some of thegeopolitical risks posed by the San Bartolomé mine inBolivia.
“With La Presiosa, this will push up our Mexico contri-bution to our overall company,” said Krebs.
Coeur paid C$100 million in cash and issued 11,572,918Coeur shares in exchange for Orko and its La Preciosa proj-ect. A total of 1,588,768 warrants to buy Coeur shares wasalso part of the deal.
Coeur anticipates it will cost roughly US$500 million toget La Preciosa into production.
A preliminary economic assessment for La Preciosa isexpected later this year and the company hopes to begin pro-duction at the Durango-area mine in 2016.
“This is a good size acquisition for us – it’s not too bigand it’s not too small. It moves the needle but it is somethingwe can fund from our existing cash and cash-flow that weare generating,” Krebs said.
The retooling of Coeur goes beyond squeezing higherreturns from its silver and gold assets.
“We have been spending a lot of time on the organiza-tion,” Krebs told the crowd in Zurich. “With the amount ofgrowth that we have experienced over the past five yearsthere is a lot of catch up work just within the organizationitself, to make sure we have a solid foundation to not onlymanage the business we are today but to be scalable enoughto handle the additional growth in the company.”
This transformation is accentuated by a move of the com-pany’s headquarters from its namesake town of Coeurd’Alene, Idaho, to Chicago, Illinois.
“Relocating our headquarters to Illinois will improve ouraccess to key stakeholders and to our operations,” saidKrebs. “Chicago is a global, pro-business city, an interna-tional transportation hub and provides access to a broad anddeep talent pool. We look forward to our active involvementin our new community and are proud to call Chicago ournew home.”
A new name, Coeur Mining, will emblazon its downtownChicago headquarters.
Shareholders will be asked to affirm the new monikerduring Coeur’s annual meeting, to be held in the company’snew home town on May 14.
Coeur anticipates being settled into its downtownChicago office by the third quarter.
“So, that is a lot of change and we think a lot of improve-ment in the company,” the CEO of the new Coeur told hiscolleagues in Zurich. �
continued from page 3
COEUR MINING
5NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF APRIL 28, 2013
By SHANE LASLEYMining News
The 28th Alaska Legislature has forwarded a slew ofbills to the desk of Gov. Sean Parnell that are aimed
at recognizing the Last Frontier’s rich mining history andensuring the industry is a key component of the state’s eco-nomic future.
Senate Bill 1, which designates May 10 of every year asAlaska Mining Day, was the first of these to garnerParnell’s endorsement.
May 10 was chosen to coincidewith the day the General Mining Actof the United States was adopted in1872. This law, which established thesystem of locating mining claims onpublic lands still in use today, pro-vided a framework for Alaska’s greatgold rushes that started in Juneau in1880 and spread across the state.
“Mining has created opportunitiesfor Alaskan families for genera-tions,” Parnell noted. “I am honored to sign this legislationto recognize the miners and the mining industry, whichhave greatly contributed to our state’s economy, and willcontinue to do so in the future.”
SB 1, which was introduced by Sen. Cathy Giessel, R-Turnagain Arm/North Kenai, offers an annual opportunityto celebrate Alaska’s rich mining history and raise aware-ness of the contributions the industry continues to make.
According to the “Economic Impact of Mining inAlaska 2012,” a report recently completed by theMcDowell Group, roughly US$650 million in wages waspaid to the some 9,500 workers directly and indirectlyemployed by Alaska’s mining industry last year.
“Mining was central to Alaska’s early development andeconomy,” Sen. Giessel said. “In the late 1800s, rugged
individual prospectors came to Alaska and started what isnow the state’s second-largest industry, providing thou-sands of high-paying jobs and producing almost seven per-cent of Alaska’s gross state product.”
SB 1 received unanimous approval in both the Senateand House.
Mining compactAs the ink was drying on SB 1, a
second mining bill introduced byGiessel gained final legislativeapproval. This legislation, SenateBill 2, authorizes the state to join theInterstate Mining CompactCommission.
“SB 1 Alaska Mining Day honorsthis important industry, and SB 2 helps move it forward byenabling Alaska to become a full voting member of thewell-recognized IMCC,” Giessel said.
The IMCC is a multi-state governmental agency thatadvocates for responsible mining on a national level.
“It is the significant value and clout that comes from‘compacting’ together and speaking with a strong, unitedvoice that can make a difference in each state’s efforts toimplement effective regulatory programs that will con-serve natural resources and secure a vibrant state (and thusnational) mineral economy,” the IMCC says on its website.
Alaska, previously an associate member of the nationalorganization, now joins 20 other mining states as full mem-bers of the commission.
“In today’s legislative and regulatory climate inWashington, D.C., it is more important than ever for stategovernments to be heard,” said Giessel. “IMCC is recog-nized by many in the nation’s capital for its experience andexpertise on mining issues. Becoming a member of theIMCC pushes Congress to recognize Alaska as an impor-tant player in environmental concerns and regulatory
issues.”Member state governors serve as commissioners of the
IMCC. A representative is appointed by each commission-er, typically from the upper echelons of the states’ naturalresources or environmental departments, to sit on the vari-ous IMCC committees.
In addition to a more robust voice in the nation’s capi-tal, full membership in the IMCC offers Alaska’s regulato-ry agencies with access to a network of peers to exchangeinformation about best practices and regulations to furtheradvance the mining industry in Alaska.
“Joining the IMCC gives Alaska the opportunity tobuild on our successes, share what works with other states,and foster a better relationship with federal agencies,”explained Giessel.
SB 2 received unanimous approval by members of theSenate and House and was signed into law on April 16.
Minerals Commission streamlinedWhile SB 2 provides Alaska a stronger voice on mining
issues in Washington D.C., House Bill 99 ensures thestate’s mining industry continues to be heard in Juneau.
HB 99, introduced by Rep. Dan Saddler, R-JBER/EagleRiver, extends and streamlines the Alaska MineralsCommission, an 11-person panel created in 1986 to makerecommendations to the governor and legislators on waysto spur development of the state’s mineral resources.
“The Alaska Minerals Commission has done importantwork and provided sound recommendations on how tokeep the minerals industry healthy in Alaska, and I’mgrateful that it is being extended another 10 years,” Saddlersaid. “The commission members’ broad experience hashelped the state keep up to date on industry trends, identi-fy roadblocks and suggest solutions to maintain a healthymining sector, which provides needed jobs and economic
� A L A S K A
Alaska miners get their day in JuneauFrom establishing Mining Day to lowering Interior energy costs, legislators send a number of mining-related bills to governor
see MINING LEGISLATION page 6
GOV. SEAN PARNELL
SEN. CATHY GIESSEL
6NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF APRIL 28, 2013
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benefits to communities and regions across the state.”Funding the Roads to Resources program, reforming
Alaska’s permitting system and assuming state primacy onwater quality regulation are among the commission rec-ommendations that have been implemented by the AlaskaLegislature.
In its 2013 report, the Alaska Minerals Commissionthese recommendations:
•Improve tax climate for mineral investment andresource revenue sharing;
•Support Roads to Resources;•Support K-12 and college level resource education; •Fund opposition to federal intervention on mining proj-
ects; •Fund retention of state mineral
geologists; and•Fund upgrading the Alaska
Geologic Materials Center.In addition to extending the com-
mission until 2024, HB 99 limitsmembership to two three-year termsand staggers these appointments.
In February 2014, all of the seatson the commission will expire. Tofill the commission, five of the panelmembers will be appointed by the governor and three eachby the Alaska Speaker of the House and president of theAlaska Senate.
To stagger the expiration dates, the first appointmentsunder HB 99 will be divided between one-, two-, or three-year seats. Once staggered, all appointments will be forthree-year terms.
HB 99 received unanimous approval in both the Houseand Senate.
Resolved to oppose federal overreachFederal efforts to impede the development of Alaska’s
resources are not only a concern of the mineral commis-sion but are on the minds of the state’s legislators as well.
Senate Joint Resolution 2, introduced by Sen. FredDyson, R-Eagle River, lends the Legislature’s support tothe stand taken by the Parnell Administration to protect thestate from federal intrusion into the management ofAlaska’s resources.
“At statehood, the debate over how Alaska would sup-port itself focused on stewardship of the state’s naturalresources, and the state being able to develop thoseresources,” said Dyson. “Unfortunately, we find ourselvesin an unprecedented dangerous time, when national envi-ronmental groups and their allies within federal bureaucra-cies are making every effort to finally lock up as much ofAlaska’s land and resources as they can.”
Dan Sullivan, who is commissioner of the AlaskaDepartment of Natural Resources Commissioner and thestate’s former attorney general, said that a resolution suchas SJR 2 would help demonstrate that the Legislature and
its constituents support the ParnellAdministration when it needs tostand up to the federal government incourt.
“In these critical times, it isimperative that we have a governorand attorney general who are proac-tive in standing up to these federalefforts, and it is equally necessarythat we the people, speaking throughour elected representatives in theLegislature, affirm our strong support for the governor andAG (attorney general),” Dyson expounded.
The resolution also urges “the United States Congressand the President of the United States to limit federal gov-ernment overreach into management of state resources.”
SJR 2 was unanimously passed by the Senate, and Rep.Andy Josephson, D-Anchorage, was the only member ofthe House who voted against the resolution.
Dredge and fill primacySenate Bill 27, a bill to establish Alaska primacy over
administering dredge and fill activities under section 404of the federal Clean Water Act, was the most highly con-tested of the mining-related legislation to run the gambit toParnell’s desk.
Supporters of SB 27 contend that because nearly half ofAlaska is considered wetlands, most major projects – suchas mines, pipelines and roads – and a large number ofminor construction projects – such as housing pads –require 404 permitting. Meanwhile, the Army Corps ofEngineers, the agency currently charged with issuing the404 permits, is experiencing budget and staff cuts that willlikely slow the permitting process.
“In a state like Alaska with a very narrow window forconstruction, such delays can and do result in projectdelays of a year or more. A state-run program that isaccountable to Alaskans and the Legislature will assurethat it is the state that decides the level of resources todevote to a program that is so essential to the state’s econ-omy. The state will have control of its permitting priori-ties,” the Alaska Department of EnvironmentalConservation penned in a testimony to the Senate.
Pointing to Michigan and New Jersey, the only otherstates with 404 primacy, opponents of SB 27 argue thatadministration of the dredge and fill activities will beexpensive.
Nunamta Aulukestai, a Southwest Alaska conservationorganization that played an active role in opposition to thePebble copper-gold-molybdenum project, testified that in atime of budgetary belt-tightening the authority over 404permits “would commit significant financial resources fordecades to come.”
DEC and the Alaska Department of Natural Resourceswill be charged with administrating the 404 program.
DEC informed lawmakers that it has worked closelywith DNR in recent years to streamline the state’s permit-ting processes, and the two agencies are poised to applythis experience to wetlands dredge and fill permitting.
“These faster, streamlined practices place more empha-
sis on results – protection of wetlands and water resources– and less on cumbersome processes,” DEC testified.
While SB 27 sets Alaska in motion to gain 404 prima-cy, DEC anticipates further legislative actions will be need-ed once the state agencies have a better grip on the amountof money and other resources that will be required toimplement the program.
“By the (fiscal 2016) budget cycle, however, we expecta decision point regarding whether to advance the primacyeffort. At that point, DEC and DNR will have a much bet-ter understanding of the resources that will be required forthe full program. We expect that additional resources, like-ly significant because it is a significant program, will berequired at that time,” DEC forewarned.
SB 27 passed the Senate on a 15-2 vote and received25-13 approval in the House.
Resolved to develop REEsThe realization of Alaska’s rare earth minerals potential
is one notion that every policymaker in Juneau seems tosupport. Senate Joint Resolution 8, which urges increasedproduction of rare earth elements in Alaska, drew sweep-ing support in the state House and Senate.
“The United States used to be almost self-sufficient inrare earth elements, but now we almost completely relyupon foreign sources for those important elements,” saidSen. Lesil McGuire, R-South Anchorage, sponsor ofSenate Joint Resolution 8. “We need to move now tobecome a dominant world player in the development ofrare earth elements which are critical for military and eco-nomic security, as well as renewable energy systems.”
The resolution also calls for the federal government,including the United States Geological Survey, to workwith the State to identify REE deposits in the state, devel-op an REE information database, and promote the devel-opment of Alaska’s REE industry.Additionally, the resolution calls onagencies that deal with permitting toexpedite consideration and issuanceof REE permits.
“So far, we have identified at least70 sites in Alaska that contain rareearth elements. Several experts havesaid it is likely that Alaska has one ofthe most significant rare earthprospects in North America,” saidMcGuire. “If we play our cards right, this could secure ourfuture as the lead supplier of America’s rare earth mineralneeds.”
SJR 8 recognizes the deposits at Bokan Mountain as“rich in the heavy rare earth elements of europium,gadolinium, terbium, dysprosium, thulium, holmium,erbium, ytterbium, lutetium, and yttrium” and “the onlyknown (heavy rare earths) deposits in the world that havedeep water access, accessible labor, and prospective powersources.”
“There are actually two opportunities developing REEsoffer for Alaskans. One is the value of the actual minerals
continued from page 5
MINING LEGISLATION
see MINING LEGISLATION page 7
REP. DAN SADDLER
SEN. FRED DYSON
SEN. LESIL MCGUIRE
By CURT FREEMANFor Mining News
Mineral consulting group BehreDolbear Group Inc. released its
2013 “Ranking of Countries For MiningInvestment Where Not to Invest.” Since1999 the group has compiled annualpolitical risk assessments from key play-ers in the global mining industry.
Geology and mineral potential are notconsidered in this survey, since suchpotential is inherently indicated by thefact that mineral exploration, develop-ment, and mining activity are occurringin these countries. The only factors con-sidered relevant are those pertaining to“political risk.” Seven risk factors wereconsidered, ranging from a country’spolitical and economic system to corrup-tion, monetary stability, bureaucraticinefficiencies and social issues. Out of25 countries considered, the UnitedStates came in at No. 6, behindAustralia, Canada, Chile, Brazil andMexico. Could be better but not bad.However, in the sub-category relating tocountries with the most permittingdelays, the Unites States was tied fordead last with Papua New Guinea!
Pretty sad. On an unrelated subject, thereport also pointed out that increasedcommodities prices have allowed previ-ously defined but sub-economic projectsto be resurrected, gussied up and trottedout as new projects. Some of these proj-ects are not what they seem. BehreDolbear put it rather well: “The highercommodity prices have resulted in thatold dog of a project (let’s call it Fido) tore-emerge under a new name with newsponsorship – (now Phydeaux). It’s still
a dog, but a higher-class dog. Caveatemptor!”
Western AlaskaFIRE RIVER GOLD provided an
update of activities over the last threemonths at it Nixon Fork mine nearMcGrath. To date in 2013 the mine hascompleted 3,339 meters of undergroundexploration drilling and 3,507 meters ofunderground definition drilling at theCrystal and Garnet areas of the mine.Drifting on the 385/J5A drift continueswith the drift expected to be completedin the J5A ore body shortly. DuringFebruary the mine processed 4,784 tonsof ore grading 0.474 ounces of gold perton and recovered 1,677 oz (74 percentrecovery). In March the mine processed3,467 tons of ore grading 0.420 ouncesof gold per ton and recovered 1,153 oz(79.1 percent recovery). Althoughprogress at the mine has been madetoward reaching commecial production,
the pace of the progress has been insuffi-cient to reach productions levels neces-sary to achieve commercial productionin the first quarter of 2013. In particular,the company’s milling throughput forFebruary and March was been negative-ly impacted by continued inclementweather, logistical challenges relating toair deliveries of key production suppliesand fuel, and unscheduled downtime forequipment repair of the Larox filter, sec-ondary cone crusher and ball mill motor.Because of these cash flow issues andthe company’s increasing dependence oncreditors, the board of directors hasdecided to explore all strategic options.
NOVAGOLD RESOURCES INC.reported results for its first quarter endedFeb. 28, and gave an update on the per-mitting process for its Donlin gold proj-ect. During the quarter, the company hastransitioned from the public scopingperiod into the preliminary draft envi-
7NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF APRIL 28, 2013
and the other is creating a whole new layer of the economyby refining those minerals here,” McGuire added.
In addition to lending its support to the exploration forand mining of rare earths, SJR 8 urges Alaska permittingagencies to expedite consideration and issuance of permitsrequired for the development of REE projects in the stateand urges “the United States Congress to support efforts ofthe state to develop rare earth elements in the state for thebenefit of the economic and national security of the UnitedStates.”
SJR 8 received unanimous approval in both the Houseand Senate.
Lowering Interior power costsSenate Bill 23, which authorizes the Alaska Industrial
Development and Export Authority to provide up toUS$275 million in financing for a natural gas liquefactionplant on the North Slope and a liquefied natural gas distri-bution system within the Fairbanks North Star Borough, ispart of Gov. Parnell’s strategy to lower energy costs inInterior Alaska.
“For too long, Interior and rural Alaskans have beensuffering from skyrocketing energy costs,” Gov. Parnell
said. “I am pleased the Legislature worked quickly toaddress this issue and provide the necessary framework toreduce energy costs for Alaskans.”
Lower electricity and heating costs will bring relief tothe Interior’s residents and mines alike.
Kinross Gold Corp.’s Fort Knox Mine, situated about26 miles (42 kilometers) north of Fairbanks, spent roughlyUS$40 million, or about US$110,000 per day, on power in2012.
“When I am paying 78 percent more for the same unitcost of power than my sister mine in Washington and 68percent more than they are in Nevada, I struggle with that,”said Fort Knox General Manager Dan Snodgress. “If thismine was located near Anchorage, near Southcentral, ver-sus the Interior of Alaska, the cost differential of power issubstantial.”
Snodgress said lowering power costs in the Fairbanksregion is not only important to the bottom line at Fort Knoxbut is crucial to developing other mines in Alaska’sInterior.
“Mining in the Interior is expensive and if we are goingto develop new mines, we are going to have to figure outhow we reduce the power rate,” he told the mining com-munity.
He suggests trucking liquefied natural gas down fromthe North Slope to fuel Interior Alaska power plants as one
avenue of reducing costs. SB 23 would not only build the necessary infrastructure
to accommodate trucking LNG to Fairbanks but it alsowould ready the Interior city to connect to a natural gaspipeline, if and when it is built.
SB 23 received unanimous approval in the Senate andHouse.
A natural gas pipeline also moved one step closer toreality during Alaska’s 28th Legislature.
House Bill 4, legislation authorizes the Alaska GaslineDevelopment Corp. to develop, finance and operate a 500-million-cubic-feet-per-day in-state pipeline that wouldbring natural gas from the North Slope to Fairbanks andSouthcentral Alaska.
“This is Alaska’s opportunity to advance the state’sinterests to get Alaskan gas into the hands of Alaskans onour schedule, without waiting for others to determine ourfuture,” HB 4 sponsors Rep. Mike Hawker, R-Anchorage,and House Speaker Mike Chenault, R-Nikiski said in ajoint statement.
“Alaskans have had to wait too long to get their gas,”Parnell said. “I commend Representative Hawker andSpeaker Chenault for spearheading this legislation to getAlaska’s gas to Alaskans first, then to markets beyond.”
HB 4 passed the House with a 30-9 vote and received a34-4 approval in the Senate. �
www.hdrinc.com
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Providing engineering, environmental baseline, planning, and consultation services for mining and mineral exploration clients since 1979.
continued from page 6
MINING LEGISLATION
� C O L U M N
Report rates countries on political riskOf 25 countries, United States ranks No. 6 for mining investment, but ties for last with Papua New Guinea for permitting delays
TheauthorThe author
Curt Freeman,CPG #6901, is awell-known geol-ogist who lives inFairbanks. He pre-pared this column CURT FREEMANApril 22. Freeman can be reached bymail at P.O. Box 80268, Fairbanks, AK99708. His work phone number atAvalon Development is (907) 457-5159and his fax is (907) 455-8069. His emailis [email protected] and his website iswww.avalonalaska.com.
“On an unrelated subject, the report also pointed out that increasedcommodities prices have allowed previously defined but sub-economicprojects to be resurrected, gussied up and trotted out as new projects.”
—Curt Freeman, columnist
see FREEMAN page 8
ronmental impact statement phase ofpermitting at the project. Importantmeetings were held in 13 villages and inAnchorage and public feedback was gen-erally positive. Permitting efforts areexpected to require 3-4 years to com-plete. Throughout the balance of theyear, the company anticipates that theU.S. Army Corps of Engineers, the leadpermitting agency for the project, willdraft the PDEIS, receive comments fromthe Federal and State agencies on thePDEIS in preparation for issuance of theEnvironmental Impact Statement in2014. In addition, the company will con-
tinue to optimize the project and evalu-ate third-party owner-operator agree-ments to reduce the up-front project cap-ital costs.
GRAPHITE ONE RESOURCES INC.said it has commissioned JDS ENERGYAND MINING INC. to complete ongoinghigh-level engineering and logistics stud-ies pursuant to the completion of a pre-liminary economic assessment at itsGraphite Creek graphite project north ofNome. Current resources at the projectconsist of inferred resource of 164.5 mil-lion metric tons grading 4.61 percentgraphite.
LINUX GOLD CORP. announced thatit has signed a teaming agreement withKenn Roberts to produce gold at its DimeCreek placer gold and platinum project in
the Koyuk District on the eastern SewardPeninsula. Following capital investmentsby Linux of US$32,000, production rev-enue will be shared on a graduated basisuntil Linux receives payback and then thepartners will split revenue evenly. Thecompany also indicated that it plans toconduct lode and placer explorationdrilling on the project.
NORTHERN DYNASTY MINERALSLTD. announced that the Pebble LimitedPartnership has approved a budget ofabout US$80 million to advance thePebble project in 2013, with the goal ofinitiating permitting under the NationalEnvironmental Policy Act before the endof the year. Since the Pebble Partnershipwas established in July 2007, a subsidiaryof Anglo American plc has invested aboutUS$500 million to advance engineering,environmental and socioeconomic studies.When added to Northern Dynasty’s initialUS$180 million contribution, investmentsin the project total US$680 million. Thisyear the budgeted US$80 million expen-ditures will include: engineering studies tocomplete a project description andadvance a prefeasibility study; continuedenvironmental monitoring studies in keyareas including groundwater hydrology,water quality and fisheries resources; siteinvestigations, including exploration,geotechnical and metallurgical drilling, aswell as geo-hydrological testing; andstakeholder engagement and public affairsprogramming, workforce and businessdevelopment initiatives, public educationand community investment.
Interior AlaskaENDURANCE GOLD CORP.
announced that Liberty Gold Corp. hascompleted a US$20,000 option paymentand will continue with their option on theMcCord Creek gold project nearLivengood. As part of the 2013 program,16 additional State of Alaska mining
claims were recently staked and recorded,which increases the size of the property to49 claims (7,820 acres). To date, 439 soilsamples and 73 rock samples have beencollected from the property. The 2011 and2012 programs identified seven multi-ele-ment soil anomalies, associated with mul-tiple anomalous gold values (>100 partsper billion gold). The two largest multi-element soil anomalies are about 1,500meters by 400 meters, and 1,100 metersby 500 meters in size. Planning is inprogress for the 2013 exploration pro-gram.
Alaska RangePURE NICKEL INC. said its joint ven-
ture partner on the MAN Alaska project,ITOCHU CORP., has confirmed fundingof about US$3.5 million for the 2013exploration season. ITOCHU has earned a30 percent ownership interest in the proj-ect and has funded some US$21 millionworth of exploration work since 2008.Exploration activity in 2013 will consistprimarily of a drill program targeting thewestern part of the Alpha complex, wheredrilling in 2010 and 2012 intersectedanomalous nickel-copper-platinum groupelement mineralization. The 2013 budgetcalls for a 2,200-meter drill program uti-lizing one helicopter supported drill rig.The program is expected to commence inthe last week of May, and will be com-pleted by mid-August.
Northern AlaskaNOVACOPPER INC. announced the
results of its first quarter ended Feb. 28,and an update on its Upper Kobuk miner-al project in the Ambler Mining District.The company has approved a budget ofUS$16 million for its 2013 explorationprogram at the Arctic and Bornitedeposits. The company plans to carry outadditional diamond core drilling focusedon the Bornite deposit and complete apreliminary economic assessment studyon an open-pit mining scenario at theArctic deposit during the summer of2013. This work includes technicalreviews, formal studies and general andadministrative costs. The company alsoindicated that it was continuing to workwith the Alaska Industrial Developmentand Export Authority and plan to sign amemorandum of understanding during thefirst half of 2013 as the next step toadvancing the road into the AmblerMining District. The State of Alaska andAIDEA are working on initiating permit-ting for the road which is expected to pro-vide access to both the Bornite and Arcticdeposits.
GOLDRICH MINING CO. said it hadcompleted forward gold sales from itsChandalar project of about US$600,000 ata 25 percent discount to market price ascalculated on the date of sale. A total ofapproximately 500 ounces of gold wassold for delivery in November 2014.GOLDRICH NYACAU PLACER LLC, a50/50 joint-venture company formed byGoldrich and NYACAU LLC plan to com-mence placer gold production in June ofthis year. The production goal for 2013 is8,500 ounces of fine gold and about10,000 ounces per season thereafter.
Southeast AlaskaCOEUR D’ALENE MINES posted first
quarter 2013 production results from itsKensington gold mine. The mine pro-duced 25,206 ounces of gold at a cashcost of US$900-950 per ounce. The millprocessed 129,057 metric tons of oreaveraging 0.20 ounces per metric ton goldduring the quarter. Mill recoveries camein at 96.2 percent. The mine is expectedto produce 108,000 to 114,000 ounces ofgold during 2013. �
8NORTH OF 60 MINING
continued from page 7
FREEMAN
9NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF APRIL 28, 2013
Fort KnoxFirst things first. At Fort Knox, our priorities are simple. Our people. Our community.Our environment.
Fairbanks Gold Mining Inc.A Kinross company
We invest in our people, so they are trained to do the best job possible.
We support our community with charitable donations, volunteer hours and local purchases.
We adhere to the toughest standards to protect water and air quality. These are our priorities.
Because at Fort Knox, it’s about putting first things first.
kinross.com
� C O L U M N
For Alaska, the only constant is changeA downward swing in the price of gold should not prevent us from proudly sharing Alaska Mining Day on May 10 with our neighbors
By J. P. TANGENFor Mining News
About 2,500 years ago, Heraclitus ofEphesus observed that the only
constant is change. Looking out thewindow on a snowy Alaska April morn-ing brings this observation home onceagain. It is amusing to reflect on theacrimony associated with “global warm-ing,” which was renamed “climatechange” when it became apparent thatthe last decade has not proven to be aswarm as the preceding decade. As oneobserver put it, “global temperatures arewarmer than about 75 percent of any-thing we’ve seen over the last 11,000years or so.” In other words, 25 percentof the time since the last ice age, it’sbeen warmer than now.
Likewise, the price of gold has beenin slump for the six or seven months,dipping from a high of US$1,790 perounce last September to a low ofUS$1,352/oz last week. We were notdismayed but delighted when in thesummer of 2010, gold passed throughUS$1,350/oz headed north. A part of myglee in musing about change and recenthistory, I suppose, is related to themuch-touted promise in 2008 of “Hopeand Change,” or as our favorite distaffAlaskan wag put it, “that hopey andchangey stuff.” The “changey stuff” doeskeep coming.
In any case, Alaska is a mining state.Let me repeat that: Alaska is a mining
state. The Alaska Miners Association hasjust published its annual descriptor ofthe industry with the news that there arelots of dollars being spent in Alaska byminers and for mining activities and thatthere are many more opportunities pend-ing for the short- and long-term future.In the overview, it is disclosed that in2012, there were 4,800 people directlyemployed in the mining industry inAlaska and another 4,700 indirect jobs.This translates into a US$650 millionpayroll. The average annual mine workerwage is estimated to be US$100,000 peryear.
After the oil and gas industry, miningis Alaska’s second-largest economic pro-ducer, and it is on a steady, inclined tra-jectory, with seven major mines in pro-duction in the state and at least thatmany progressing toward permitting andultimate production. This does not count
the 85,000/oz gold produced last year bythe 300 or so placer miners rangedaround the state.
We know that the price of gold, aswell as those for other commodities, willfluctuate, sometimes wildly. A 25 per-cent dip in the price of gold, therefore,should not necessarily be a cause for dis-may. Of course, the microeconomics ofthe industry is such that there are goingto be local impacts especially among theoverextended. On the other hand,because mining is typically front-loaded,if and when payback is achieved, miningcan be profitable despite temporaryswings in the price. Every change willaffect individuals differently.
And so that brings us to star-gazingand climate change once again. Wherewill the price of gold go, and when?Who knows? My recommendation forinvestors and planners alike is to tap into
the model embraced by the acolytes ofAl Gore who promised us that virtuallyall reputable weather scientists knew thatif we didn’t start reducing global warm-ing, the world was going to come to acatastrophic end, without the concomi-tant assurance that if we did slow downglobal warming, a glorious future await-ed us. The Gore paradigm enabled is tosee into the near and distant future dis-tinctly, and I for one cannot see why itcannot be adapted to foreseeing the priceof gold with equal clarity.
In the meantime, let us rejoice in thefact that we, in Alaska, have a marvelousresource base being evaluated andtapped by a healthy, safe and environ-mentally sound industry dedicated tobettering the lives of its employees, thecommunities where operations are beingconducted, the state as a whole and the
Mining & thelaw
The author,J.P. Tangen hasbeen practicingmining law in J.P. TANGENAlaska since 1975. He can be reached [email protected] or visit his Web site atwww.jptangen.com. His opinions do notnecessarily reflect those of the publishersof Mining News and Petroleum News.
And so that brings us to star-gazing and climate change once again.Where will the price of gold go, and when? Who knows? My
recommendation for investors and planners alike is to tap into the modelembraced by the acolytes of Al Gore who promised us that virtually allreputable weather scientists knew that if we didn’t start reducing globalwarming the world was going to come to a catastrophic end, without the
concomitant assurance that if we did slow down global warming aglorious future awaited us. The Gore paradigm enabled is to see into thenear and distant future distinctly, and I for one cannot see why it cannot
be adapted to foreseeing the price of gold with equal clarity. —J.P. Tangen, guest columnist
see TANGEN page 18
By SHANE LASLEYMining News
With the goal of filing for permits bythe end of the year, the Pebble
Limited Partnership has agreed to a budgetof roughly US$80 million for Pebble in2013, which will push the total investmentin the Southwest Alaska copper-gold-molybdenum deposit above US$750 mil-lion.
“By the time the Pebble Partnershiptriggers permitting under NEPA (NationalEnvironmental Policy Act), more thanUS$700 million will have been invested toensure a robust project design from a tech-nical, financial, environmental and socialperspective. PLP (Pebble LimitedPartnership) fully expects that the rigor ofthat work will be recognized and reflectedin the outcome and efficiency of the NEPApermitting process,” said NorthernDynasty President and CEO RonaldThiessen.
The Pebble Partnership was establishedin 2007 as a 50-50 alliance betweenVancouver B.C.-based Northern Dynastyand London-based Anglo American plc.
To earn its 50 percent stake in Pebble,Anglo American agreed to invest US$1.5billion in the massive copper-gold-molyb-denum deposit. These funds are beingspent on the comprehensive exploration,engineering, environmental and socioeco-nomic programs toward the future devel-opment of Pebble.
By the time the 2013 budget is exhaust-ed, the London-based global miner willhave invested some US$580 million to
advance engineering,environmental andsocioeconomic stud-ies at Pebble. This ison top of the roughlyUS$180 millionNorthern Dynastyspent primarily ongrasping the scope ofthe massive copper-gold-molybdenumproject prior to Anglo American comingon-board.
Pebble, considered to be the largestknown undeveloped copper deposit on theplanet, contains 80.6 billion pounds of cop-per, 107.4 million ounces of gold and 5.6billion pounds of molybdenum. That isenough copper to supply the copper needsof every person on the planet for fouryears, based on 2012 consumption, and asmuch gold as held by Germany, which hasa gold reserve second only to the UnitedStates.
The massive deposit is situated in theBristol Bay region of Southwest Alaska,home of an equally world-class sockeyesalmon fishery.
Finishing touchesWhile it comes in at about 25 percent
less than the US$107 million spent in2012, this year’s budget should be suffi-cient to put the finishing touches on thehighly anticipated mine plan for thePebble, according to the Pebble partners.
“Following a very substantial pre-per-mitting planning program and years ofcomprehensive study, the Pebble
Partnership is now nearing the final stagesof completing its project description for thePebble Project,” said Thiessen.
The project description is expected toinclude details of the Pebble mine plan; atransportation corridor that stretches fromthe deposit some 85 miles (137 kilometers)east to Cook Inlet; a deep-water port-site atCook Inlet; and power generation for thesome 400 megawatts of electricity expect-ed to be needed to power the mill and otherfacilities at the enormous copper project.
Engineering a mine and infrastructurethat does justice to the massive copperdeposit while protecting the integrity of thedownstream waters and the fish in themhas been ranked difficult to impossible,depending on who you ask.
The Pebble Partnership, which sits inthe difficult camp, has invested at levelsequal to the task at hand.
“To date, more than US$150 millionhas been invested in environmentalresearch alone, conducting one of the mostextensive scientific programs ever initiatedfor a mining project in Alaska. Data fromenvironmental studies drives significantaspects of the engineering program as thepartnership works toward developing afuture mine plan that safely and responsi-bly co-exists with the fishery and sur-rounding ecosystem,” the Pebble develop-er said in announcing the 2013 budget.
Before presenting the mine plan to fed-eral and state agencies for permitting, thePebble partnership plans to undertake abroad-based public engagement programin Southwest Alaskan. In addition to pre-senting a plan to develop and mine theworld-class copper deposit, the partnershipwill talk with area residents about the eco-nomic opportunities the project could offer.
A workforce development plan, due tobe released soon, will provide details aboutthe types of jobs anticipated at Pebble, therequirements for the positions, and wherepeople could go to seek the trainingrequired for the positions.
“This project has significant socioeco-nomic benefits for the people of SouthwestAlaska living in a region recognized withone of the highest costs of living in thenation, considerable village outmigration,school closures and high rates of unem-ployment,” says Pebble Partnership CEOJohn Shively.
A national economic impact study,which is also due to be published in thenear term, will outline how these econom-ic benefits are anticipated to ripple outfrom Pebble.
“The Pebble Partnership will soonrelease a national economic impact studyof the Pebble Project, which together withthe workforce development plan and proj-ect planning updates will form the basis foran enhanced public engagement initiativethis year,” Thiessen said. “The PebblePartnership will continue to meet and con-sult with people and communities through-out Southwest Alaska about the manyaspects of this project, while listening totheir issues and questions and describinghow the Pebble project will be built andoperated to co-exist with clean water andhealthy fisheries, and provide significantbenefits to the region and country.”
Final assessment As the Pebble Partnership enters the
final stretch to permitting, the U.S.Environmental Protection Agency is put-ting the finish touches on its Bristol BayWatershed Assessment, a study that couldseal the fate of Pebble.
Under Section 404 of the Clean WaterAct, the Army Corps of Engineers ischarged with issuing permits for dischargeinto wetlands. Some 130 million acres ofAlaska, about the combined area ofCalifornia and Kentucky, are consideredwetlands. Much of this vast expanse,including the Pebble property, is treelessareas of moist and wet tundra underlain bya permanently frozen layer that prohibitswater drainage.
Although the Corps has been relegatedthe authority over the discharge permits onthese wetlands, the EPA was granted thepower to prohibit, restrict, or deny CWASection 404 permits that pose an unaccept-able adverse impact to fisheries or otherwater uses.
A group opposed to the development ofPebble petitioned the EPA to use this vetopower to pre-emptively deny the Pebblepartnership discharge permits that wouldbe needed to build a mine at the world-class copper-gold-molybdenum deposit.
10NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF APRIL 28, 2013
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� A L A S K A
US$700M plan for Pebble nears completionProject owners seek to begin permitting for colossal copper project in 2013; EPA’s Bristol Bay assessment moves on parallel track
RONALD THIESSEN
see PEBBLE PLAN page 18
“Following a very substantial pre-permitting planning program andyears of comprehensive study, the Pebble Partnership is now nearing thefinal stages of completing its project description for the Pebble Project.”
—Northern Dynasty President and CEO Ronald Thiessen
By ROSE RAGSDALEFor Mining News
Copper Fox Metals Corp. recently com-pleted a positive feasibility study of its
Schaft Creek porphyry copper, gold,molybdenum and silver project in north-western British Columbia that could markan important turning point for the project.
The Calgary, Alberta-based companyholds title and a 100 percent working inter-est in Schaft Creek, which is located dueeast-northeast of Petersburg, Alaska, about61 kilometers (38 miles) south of the villageof Telegraph Creek.
The feasibility study prepared by TetraTech in late December outlines plans for aconventional open pit mine at Schaft Creekwith a mill rate of 130,000 metric tons perday for a minimum 21-year mine life basedthe deposit’s proven and probable mineralreserves of 940.8 million tons containing5.6 billion pounds of copper, 5.7 millionounces of gold, 363.5 million lbs of molyb-denum and 51.7 million oz of silver as ofMay 23, 2012.
Ore will be processed in a conventionalflotation plant, producing a 28 percent cop-per concentrate containing gold and silver,and a separate 50 percent molybdenumconcentrate. The project will require a per-mitting and construction period of justunder five years, initial capital costs ofC$3.257 billion including 11.5 percent con-tingencies, and sustaining capital of C$1.24billion, including a C$200 million provisionfor construction of BC Hydro’s NorthwestTransmission Line. (Access to cheap elec-trical power provided by the line is viewedas a critical factor to the development ofSchaft Creek along with many other largemineral deposits in the region.) The projectalso carries a pre-tax internal rate of returnof 10.1 percent and a pre-tax net presentvalue at an 8 percent discount of C$513million with a payback period of 6.5 years.
Deposit with growth potentialLocated within the Tahltan First
Nation’s traditional territory, the 56,267.54-hectare (139,040 acres) Schaft Creek prop-erty encompasses portions of the SchaftCreek and Mess Creek Valleys, and MountLaCasse situated in the Cassiar/LiardMining Division.
Described as a calc-alkalic copper-molybdenum porphyry system related to anelongate, high-energy, structurally con-trolled breccia system, the Schaft Creekdeposit was discovered in the late 1950s,and since has been the subject of extensiveexploration, including the completion of410 drill holes totaling 98,445.82 meters.The deposit has historically been dividedinto three zones; the Liard (Main) Zone, theParamount Zone, and the West BrecciaZone. For estimation purposes, and due tothe geometry of the mineralization, theWest Breccia zone has been included with-in the Paramount Zone. The Liard zone isrelated to the intrusion of feldspar quartz-porphyry dikes, while the Paramount zoneis closely related to a north-south trendingbreccia zone.
A May 2012 mineral resource estimate,calculated at a 0.15 percent copper-equiva-lent cut-off, pegged the size of the deposit at146.6 million metric tons in the measuredcategory grading 0.31 percent copper, 0.017percent molybdenum, 0.24 grams per met-ric ton gold and 1.78 g/t silver (containing1.0 billion pounds copper, 55.6 millionpounds molybdenum, 1.15 million ounces
gold and 8.40 million ounces silver; 1.08billion metric tons in indicated resourcegrading 0.26 percent copper, 0.017 percentmolybdenum, 0.18 g/t gold and 1.68 g/t sil-ver (containing 6.1 billion pounds copper,399.7 million pounds molybdenum, 6.22million ounces gold and 58.34 millionounces silver); and 597.2 million metrictons in inferred resource grading 0.22 per-cent copper, 0.016 percent molybdenum,0.17 g/t gold and 1.65 g/t silver (containing2.87 billion pounds copper, 206.3 millionpounds molybdenum, 3.36 million ouncesgold and 31.60 million ounces silver).
In addition, the mineralization remainsopen in several directions (along strike),which adds an extra dimension to the poten-tial size of the deposit, according to CopperFox President and CEO Elmer B. Stewart.
“We feel the Schaft Creek area is a dis-trict, and we think Schaft Creek is a muchlarger deposit than what is reflected in theMay 2012 resource estimate,” Stewart told
analysts on a recent conference call. “Myguess is somebody is going to be at SchaftCreek a long time.
Teck’s earn-back option The Schaft Creek area has been
explored for more than 50 years. Asarcoworked the property for most of the 1960s,and was followed by Hecla, Paramount andPhelps Dodge in various programs in thelate ’60s and early ’70s. In 1978, Heclasold its interest in Schaft Creek to Teck,which explored the area for the next 24years.
In 2002, Copper Fox acquired theSchaft Creek claims held by TeckResources Ltd. Included in this total are the“Schedule A” mineral tenures originallyconveyed to Copper Fox pursuant to theTeck Option Agreement, which consist of8,334.34 hectares (20,594 acres). The“Schedule A” mineral tenures are subject
to a 3.5 percent net profits interest held byRoyal Gold, Inc., a 30 percent carried netproceeds interest held by Liard and, togeth-er with the additional mineral tenuresobtained by Copper Fox within the “Areaof Interest” provided for in the Teck OptionAgreement, an earn-back option held byTeck.
The remainder of Copper Fox’s regis-tered interests in mineral tenures in BritishColumbia total 47,933.19 hectares(118,445 acres). These interests wereacquired by Copper Fox through mineraltenure acquisitions and mineral tenure pur-chase agreements subsequent to the com-pany entering into the Teck OptionAgreement. Certain portions of the regis-tered mineral tenures are subject to inclu-sion within the Schaft Creek project pur-suant to the terms of the “Area of Interest”provisions of the Teck Option Agreement.
� B R I T I S H C O L U M B I A
Wily junior advances promising porphyry Turning point looms for Schaft Creek project as Northwest Transmission Line, decades of work open new vistas for huge mine project
Cu29
63.55
World-class project. World-class science.
Pebble is a world-class copper deposit and one of North America’s most significant copper
discoveries. Since 2001, more than 100 independent scientists and technicians have
conducted one of the most extensive environmental studies program in Alaska.
The Pebble Partnership is committed to responsible resource development in Southwest
Alaska — recognizing that a world-class project requires world-class science.
www.pebblepartnership.com
11NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF APRIL 28, 2013
see SCHAFT CREEK page 13
By ROSE RAGSDALEFor Mining News
The Government of Yukon receivedcomments from around the globe
during recent public consultation in theprolonged land-use debate over the PeelWatershed, a 77,000 square kilometermountainous and wild expanse in thenorthern part of the territory that alsoextends across the border into centralNorthwest Territories.
The Yukon portion of the watershed,
68,000 square kilometers (26,255 squaremiles), an area roughly the size of WestVirginia and Delaware combined, isundergoing land-use planning in aprocess laid out in Chapter 11 of theYukon Land Claims Agreement and iscalled the Peel Watershed PlanningRegion. The Peel area is one of eightregions for which mineral-rich YukonTerritory is developing land-use plans. Itis located north of Mayo in northeastYukon Territory.
No communities are located within the
Peel region; however, it is situated withinthe traditional territories of, and is exten-sively utilized by, four First Nations –The Na-cho Nyak Dun, the TetlitGwich’in, the Vuntut Gwitchin and theTr’ondëk Hwëch’in.
The Porcupine Caribou Herd travelsfrom the Peel into Alaska, from theBeaufort Sea to the Yukon River. TheYukon part of the watershed contains sixmajor tributaries to the Peel; from west toeast: the Ogilvie, Blackstone, Hart, Wind,Bonnet Plume and Snake Rivers. The
Bonnet Plume is a Canadian HeritageRiver.
In 2009, the Peel Watershed PlanningCommission, a citizen advisory panel,recommended banning all mining activityin 80 percent of Peel watershed region.
Mining groups oppose the proposedban, noting that the area has seen a lot ofmining exploration in the past 50 yearsand several deposits have been identifiedin the region, including the world-classCrest iron formation.
According to Yukon governmentrecords, there are 245 Minfile occur-rences in the Peel watershed, 12 of whichare deposits – seven coal deposits, threeiron deposits (including Crest iron), onezinc deposit (Goz Creek), and one cop-per-zinc deposit (Hart River). Mineralexplorers also have conducted diamonddrilling programs on 45 occurrenceswithin the watershed.
All of the deposits identified inMinfile are historical deposits, and nonehave current NI 43-101-compliantresources.
Public consultation processThe Yukon government conducted a
four-month public consultation on thePeel Watershed Regional Land Use Planbetween Oct. 23 and Feb. 25. The plan,which has been subject to public debatefor nearly a decade,
In the “Peel Watershed Regional LandUse Plan Public Consultation 2012�2013
What We Heard Report,” a 27-pagedocument compiled to reflect the gist ofthe comments, the government reportedinput from 2,127 submissions, of which82 percent came from within the Yukon.In addition, 11 petition drives and post-card campaigns generated 8,048 signa-
12NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF APRIL 28, 2013
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Rock River
Yukon River
Engineer Creek
KlondikeRiver
Tombstone
We
st
R ap it an
RI
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MountMacDonald
QuartetLakes
PopcornfishLake
DogLake
ChappieLake
TurnerLake
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T A I N S
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M O U N T A I N S
N A D A L E E N R A N G E
N A H O N I
R A N G E
O G I L V I E M O U N T A I N S
MountBaird
MountSchellinger
MountPhelps
AitchHill
MountJoyal
IthothHill
Edigii Hill
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Duo Lakes
Pinguicula L.
Elliot L.
Gillespie L.
McClusky L.
FairchildLake
MargaretLake
Hart L.
Lusk Lake(Caribou lake)
DeceptionLake
Chapman Lake
Bonnet Plume L.
Lomond L.
DEM
PS
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NORTH KLONDIKE
HWY
HIGHWAY
Arctic Circle
N O R T H W E S T T E R R I T O R I E S
N O R T H W E S T T E R R I T O R I E SY U K O N
S E L W Y N M O U N T A I NS
Mount Ferrell
RustyMountain
NadaleenMtn
BonnetPlumePass
MtPatterson
MtCameron
SteamboatMountain
CastleMountain
MountJeckell
NorthForkPass
Seela Pass
TombstoneTerritorial Park
MtHarper
MountBurgess
BearCaveMountain
BaldHill
TI
NT
IN
A
TR
EN
CH
MountDempster
MountTurner
MountMcCullum
Mount Huley
Salter Hill
VGR-07A
TGR-07FS
VGR-06A
NNDR-04A
THR-49A
NNDR-07A
THR-64B
VGR-08A
NNDR-11A
THR-01A
VGR-02A
THR-02A
NNDR-05A
THR-03A
TGR-03FS
VGR-05A
TGR-10FS
TGR-08FS
NNDR-17A
TGR-12FS
VGR-04A
NNDR-08B
TGR-04FS
THR-79B
NNDR-10B
NNDR-09B
THR-58B
THR-20A TH
R-22B
THR-80B
TGR-05FS
TGR-13FS
TGR-14FS
TGR-11FS
TGR-01FS
THR-07A
VGR-12A
THR-11A
VGR-09A
THR-83A
NNDR-26B
THR-19B
THR-14A
THR-23A
THR-27A
THR-21B
THR-31A
THR-25A
THR-40B
THR-34B
THR-29A
THR-33A
THR-28A
THR-66A
THR-63A
THR-69B
THR-41B
THR-35B
THR-59B
THR-32A
THR-70B
THR-38A
NNDR-15B
VGS-3A
VGS-6A
VGS-1A
VGS-7A
THS-2B
VGS-19A
VGS-37A
VGS-32A
VGS-44A
VGS-10A
VGS-45A
VGS-48A
TGS-4FS
TGS-4FS
TGS-3FS
TGS-9FS
TGS-6FS
TGS-8FS
THS-31B
THS-64B
NNDS-1B
THS-33B
THS-30BTH
S-29B
THS-88B
THS-25B
THS-24B
THS-27B
THS-66B
THS-99B
THS-50B
THS-47B
THS-80B
VGS-2A/D
VGS-4A/D
VGS-8A/D
VGS-9A/D
TGS-11FS
TGS-12FS
TGS-10FS
THS-107B
THS-169B
TGS-11FS
TGS-12FS
NNDS-185
NNDS-106
THS-181B
THS-145B
THS-134B
THS-135B
THS-123B
THS-144B
THS-206B
THS-176B
THS-142B
THS-159B
VGS-59A/D
VGS-57A/D
VGS-14A/D
VGS-13A/D
VGS-11A/D
VGS-12A/D
VGS-56A/D
NNDS-187B
NNDS-138B
NNDS-134B
NNDS-122B
NNDS_115B
NNDS-137B
NNDS-143B
NNDS-102B
NNDS-101B
NNDS-104B
NNDS-139B
NNDS-188B
NNDS-149B
NNDS-152B
NNDS-151B
NNDS-135B
NNDS-150B
NNDS-168B
NNDS-171B
NNDS-121B
NNDS-103B
NNDS-140B
NNDS-125B
NNDS-124B
NNDS-148B
NNDS-130B
TGS-2FS
TGS-7FS
THS-28B
THS-41B
THS-72B
THS-71B
THS-128B
TGS-13FS
THS-112B
THS-184B
THS-109B
THS-180B
THS-124BTH
S-202B
THS-136B
THS-137B
THS-138B
THS-143B
THS-168B
THS-106B
THS-113B
THS-203B
THS-205B
VGS-58A/D
VGS-20A/D
NNDS-105B
NNDS-133B
NNDS-183B
NNDS-184B
NNDS-170B
NNDS-169B
NNDS-127B
THS-26B/D
THS-208B/D
Permit #0014
Permit #0012
Permit #0010
Permit #0008 Permit #0009
Permit #0016
Permit #0005
Permit #0009
Permit #0013
Permit #0017
Permit#0018
Permit #0015
Permit #0007
Permit #0011
Permit#0001
SDL-021
SDL-022
SDL-020
Dawson
Eagle Plains
131°
134°
134°
135°
135°
136°
136°
137°
137°
138°
138°
139°
139°140°
132°
132°
133°
133°
67°
66°
66°
65°
65°
64°
Map 4Non-renewable Resource Values
PEELWATERSHEDPLANNING COMMISSION
PEEL WATERSHED PLANNING REGION, YUKON
LEGEND
!\
!(
!(
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!(
Y U K O N
NORTHWESTTERRITORIES
AL
AS
KA
BRITISH COLUMBIA
BEAUFORT SEA
Fort McPherson
Peel WatershedPlanning Region
WHITEHORSE
MayoDawson
EaglePlains
InuvikOld Crow
© Peel Watershed Planning Commission, January 2009
0 150 300
Kilometres
F
Yukon Albers Projection, NAD83
10 0 10 20 30 40 50 km
1:1,400,000
Land Ownership
First Nation LandYukon First Nation site selection#*Yukon territorial park
!9 Yukon territorial campground
Peel Watershed Planning Region (PWPR)
Basemap FeaturesWatershed/Drainage BoundaryMajor road/highwayTerritorial boundary
Land Designation
Wind River trailDempster Highway Development Area
DATA SOURCES
Base data: 1:1M hydrology (Digital Chart of the World); 1:250,000 National TopographicDatabase (NRCAN); 1:1M toponomy, 90m and 300m shaded relief (Yukon Environment)
Thematic data: 1M First Nation Lands (R-block & Fee simple), 1:250,000 S-Sites (YukonEnvironment); 1:1M Gwich’in land use planning zones (Gwich’in Land Use PlanningBoard); 1:250,000 North Yukon land use planning zones (YLUP); 1:250,000 PeelWatershed planning region (YLUP); 1:250,000 territorial boundaries, 1:250,000 territorialparks and campgrounds (Yukon Environment), 1:250,000 Dempster Hwy DevelopmentArea (Yukon Highways Act)
DATA DISCLAIMER
This map is a graphical representation, which depicts the approximate size, configurationand spatial relationship of known geographic features. While great care has been takento ensure the best possible quality, this document is not intended for legal descriptionsand/or to calculate precise areas, dimensions or distances. We do not accept anyresponsibility for errors, omissions or inaccuracies in this data.
Mineral Potential
Higher
Lower
Oil and Gas Basin Potential
Mineral Claims
Active mineral claim
Active coal license
Oil and Gas DispositionsSignificant discovery licence
Oil and gas permit
Higher
Lower
A New in Remote Site AccessEra
F l y i n g i s o u r p a s s i o n , S a f e t y i s o u r m i s s i o n
� Y U K O N T E R R I T O R Y
World community weighs in on Peel planYukon government reports extensive public feedback about territory’s prolonged land-use debate over future of undeveloped region
see PEEL WATERSHED page 14
PEEL
WA
TER
SHED
CO
MM
ISSI
ON
, YU
KON
13NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF APRIL 28, 2013
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In completing the feasibility study,Copper Fox earned Teck’s 78 percent inter-est in Liard. The earn-back option for Teckto acquire either, 20 percent, 40 percent or75 percent, of Copper Fox’s interest in theSchaft Creek property also was triggeredwhen the junior delivered the feasibilitystudy to the miner in late December. Teckhas 120 days or until the end of April toexercise the earn-back option, according toStewart.
If the major elects to earn back 75 per-cent interest, Copper Fox will effectivelyretain a 23.6 percent ownership interest inthe project.
If Teck elects to earn back any stake inthe project, the two companies will have60 days to form a joint venture for devel-oping the Schaft Creek project.
Plan to overcome challenges“Like all large-scale projects located in
alpine-type terrain, this project did comewith its own unique technical challenges,”said Stewart, in announcing the feasibilitystudy.
The project also has significant advan-tages. In addition to a favorable politicaland geographical climate of BritishColumbia, it is situated in an area of theprovince with very low average rainfall(one meter per year), low environmentalimpact, minimal impact on wildlife andzero fish habitat near the mine site.
Its location is another plus, some 45kilometers (28 miles) due west of Highway37 and the route of the NTL now underconstruction and due to be completed inMay 2014.
Access to electrical power from theNTL, the potential to significantly expandits tailings storage facility and a concen-trate storage and shipping agreement withStewart Bulk Terminals are among otherpositive features that support possiblefuture expansion of the Schaft CreekProject.
Power for the Schaft Creek projectwould be provided from the 344-kilometer(213 miles), 287 kV NorthwestTransmission Line currently under con-struction by the British Columbia Hydroand Power Authority between SkeenaSubstation (near Terrace, B.C.) and a newsubstation to be built near Bob QuinnLake. Estimated to cost between C$561million and C$617 million, the power lineis scheduled for completion in the spring of2014.
Copper Fox has requested transmissionvoltage service (69,000 kV and above) atthe Schaft Creek project via an 81-kilome-ter- (50.2 miles) long connection line fromproject to the Bob Quinn electrical substa-tion. In March the company entered into afacilities study agreement with BC Hydroin connection with proposed electricalpower supply for Schaft Creek. The agree-ment sets forth the terms and conditions forBC Hydro to perform a facilities study toassess the electrical and equipmentrequirements to connect the project to thesubstation.
Copper Fox will pay a required depositto BC Hydro. The junior previously sub-mitted a system impact study request toBC Hydro; an interconnection queueposition was assigned to the Schaft Creekproject and the system impact study wasundertaken. The queue position is used toprioritize study work and allocate inter-connection costs. The study is expected tobe completed on or before May 31, 2014and is estimated to cost more than C$1million.
The project will require other major
continued from page 11
SCHAFT CREEK
see SCHAFT CREEK page 19
14NORTH OF 60 MINING
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tures of which 86.5 percent came from outside of theYukon.
The feedback was collected through a variety ofmethods including website, notes posted at public meet-ings, emails, telephone, fax and VIA a form provided tohouseholds throughout the territory.
The public also was invited to provide comments atopen houses held in four Yukon and four NWT commu-nities in December, January and February.
The feedback ranged from the thoughts of Yukonersto those of other Canadians and the perspectives of mem-bers of the international community.
The government identified 16 significant themes inthe submissions, four of which it characterized as“major,” as well as other perspectives that focused onwater quality, importance of tourism, the lack of a needto extract resources immediately and active managementrequiring enforcement capacity.
The government said the themes had to either repre-sent the views of a significant number of respondents orhad to be critical to the reader gaining a good under-standing of the nature and scope of the input providedduring the consultation period.
The four major themes are: •The Peel Watershed is an irreplaceable global asset
and the views of all must be considered, not justYukoners;
•The Peel Final Recommended Plan is fair and bal-anced because it calls for 55 percent permanent protec-tion, 25 percent interim protection, and 20 percent opento development;
•The Government of Yukon is not following the rulesas laid out in Chapter 11 of the Umbrella FinalAgreement; and
•The Government of Yukon must balance develop-ment and environmental protection in the Peel region.
‘An irreplaceable global asset’Some respondents offered the perspective that the
Peel Watershed is more than an amalgam of variouslands and rivers; it is a complete boreal ecosystem that,
to this day, is still virtually intact. Any significant frag-mentation of that ecosystem by virtue of the develop-ment of roads irrevocably degrades the ecosystem and noamount of reclamation or post development remediationcan bring it back to its original wilderness status.Effectively, once the damage is done, it is too late; theasset is lost forever. Also, from this perspective, theYukon government has a moral obligation to considernot only the desires of Yukoners but those of all peopleregardless of their place of residence, i.e. there are placesin the world that are just too precious and unique todestroy and the Peel Watershed is such a place.
A Whitehorse, Yukon resident, for example, said “Ican only hope that the Yukon government will eventual-ly accept the Final Report Recommendations, whichtook almost seven years of hard work, consultations, andpublic funds to develop. I do not support any of the otheroptions that YG has proposed.”
A British Columbia resident, meanwhile, offered: “Iam disappointed that we are still having this ‘consulta-tion’. The Peel Watershed has been consulted to deathand a reasonable compromise plan was approved by thePeel Watershed Planning Commission. This plan hasalso been approved in the court of public opinion andshould be adopted immediately.”
The fact that several thousand people from across theworld took the time to submit comments demonstrateshow strongly global citizens feel about their right to havethe Peel Watershed preserved for them and their descen-dants, the government said. From this perspective, gov-ernments, including the Yukon government, are stewardsof the land not owners who may dispose of the land asthey see fit.
A European resident, for example, shared this: “I amaware that not living in your country might also meanthat I cannot fully grasp what is going on there.However, I am living on the same planet and that givesme the right to share my own opinion about it. I trulyhope that the Yukon government will make up their mindand take the right decision – a decision that will protectthe Peel Watershed for the people that live there now andfor future generations. It seems to me that those who careto protect the Peel Watershed have a solid plan build up.”
Reject the final planSome respondents stated their desire for the govern-
ment to reject the Peel Commission’s FinalRecommended Plan in unequivocal terms, while othersoffered a rationale for their position.
A Yukon resident, for example, wrote: “Please beadvised that I do NOT support the Final RecommendedPlan and do not support 80 percent blanket protection.We need to consider all interests in the Peel Region, pro-tect the key environmental areas and river corridors, butalso allowed strictly regulated industrial activities.”
A Whitehorse resident stated: “I prefer all four of theYukon government’s sample land use plans to the FinalRecommended Plan proposed by the advisory commis-sion, although I still think they are too restrictive todevelopment.”
A resident of Dawson offered this: “I urge you to dis-pose of the failed Peel Watershed Regional Land UsePlan forthwith. This planning exercise has failed theYukon and has failed Yukon people. […] The land willwait for us. Let’s take the time to do the job right.Garbage the current planning exercise – accept that wehave failed – return to the process 10 years hence.Hopefully, by then, a spirit of common sense and com-promise will finally prevail as we embark on a newprocess.”
And from another Yukoner: “As a First Nations per-son born in the North I appreciate the beauty of the Peelarea. I reject the Peel Planning Commission’s plan as itis too restrictive. I want mining to be allowed in thisarea. This activity provides good paying jobs and con-tributes greatly to our economy. My children will bene-fit from this.”
‘An irreplaceable wilderness ecosystem’This theme is related to the perspective that it is desir-
able to keep the Peel Watershed as wild and undevelopedas possible because this makes senses from both an eco-logical and economic perspective.
In effect this theme is associated with the view thatthe Peel Watershed in its entirety represents a virtuallyintact ecosystem that can and must be protected from anydevelopment that would irreversibly alter its wilderness
continued from page 12
PEEL WATERSHED
see PEEL WATERSHED page 15
character. The building of roads and theinfrastructure related to mining and oiland gas development are seen as irrecon-cilable with wilderness protection.
For example, a Whitehorse residentsaid, “When it comes to ecology andecosystems, the Yukon government’s newrecommended plans are far from theirsupposed goals of balance. Although inthe lifestyles of humans, we are able tofragment and allocate valued resourcessuch as time, money, and attention, it isnot so simple from the position of a com-plex and intertwined ecosystem – particu-larly when it comes to an area like thePeel Watershed, one of the last of its kind,quality, and size on the planet.Development in such a landscape wouldhave very dire consequences for the lifethat sustains itself there, whether it bewildlife, vegetation, or even people whoare dependent on the health of the ecosys-tem for their livelihoods. The impact thatwe have through development of naturalresources is not confined – the compo-nents of an ecosystem are interdependenton each other in ways that we do not evenfully understand.”
From a New Zealander: “I think min-ing can be done in environmental friend-ly ways or at least have the impact mini-mized to a sustainable level. […]However, I think there is huge importancein leaving areas pristine. We don’t have tomine everywhere, and once you begindevelopment, it will never be untouchedagain. Furthermore I think there are greatbenefits in having large, connected andproductive untouched ecosystems. Theseare important on many levels; biological-ly for maintaining healthy viable popula-tions, scientifically for studying the popu-lation dynamics such as climate changewithout a human impact variable and cul-turally for retaining an example of thesesystems for the next generation, to namejust a few. I read a case study during myuniversity degree on a team of scientistsin New Zealand trying to return a coastalfreshwater lake to its natural pre�humancondition. The scientists were unable tofind an example of an undisturbed lake toreplicate. Every single lake within NZhad a human impact variable. I wasshocked that as a conservation leader,New Zealand had reached a point of noreturn. We could never go back.”
And from an Ontario resident: “Theboom�bust cycle of the developmentproposed in the Peel will bring someyears of development to the Yukon, butnot economic prosperity to the Territoryin the mid- to long term. History and factsreveal that industry leaves minimal profit,is a burden on the Yukon’s energy sourcesand infrastructure, and leaves a hazardousmess in its wake. Ultimately, the costs ofcompromising the integrity of one of thelast pieces of wilderness left on this plan-et outweigh the short-term economicgains.”
Final plan is ‘fair and balanced’The government said this theme is
related to the perspective that despite amajority wanting 100 percent protectionfrom nonrenewable resource extraction inthe Peel Watershed the actual FinalRecommended Plan compromised by per-manently protecting only 55 percent. Thistheme is also associated with the viewthat all members of the public, includingrepresentatives of the non�renewableresource sector had a fair opportunity tohave their views considered during theextensive six�year�long consultationprocess. Finally, from this perspective the
plan is seen as balanced, because it isopen to cyclical review and because itallows development including mineraland oil and gas extraction.
For example, a Yukon resident stated,“The Peel Planning Commission’s FinalRecommended Plan is the result of anextensive process, involving hundreds ofYukoners, and years of debate and negoti-ation, a wise document that balances ourdesire to have a successful and growingeconomy, yet affords true protection of anirreplaceable treasure, the PeelWatershed, for future generations.”
Final plan is neither ‘balanced nor fair’Respondents that share this perspec-
tive, said the Commission’s final plan isbiased against development because itfails to sufficiently take into account theeconomic value of non�renewableresources present in the Peel Watershed.Further, this theme is related to the viewthat too little is known about the mineraland oil and gas potential of the region tomake reasonable and informed decisionsabout which areas should be preservedfrom development at any cost. Also asso-ciated with this theme is the view that thefinal plan is truly not a land use plan butrather a land preservation plan.
A Yukon resident, for example, said,“First and foremost the mineral resources,oil and gas potential in the PeelWatershed need to be identified and pro-tected (in reserve) for the Crown, YukonGovernment and all Canadian citizensfuture economic development. Onceidentified, then a process can be negotiat-ed for protection of the remaining water-shed system. These resources belong tothe future generations for their economi-cal need. It would be economic suicidefor Canadian and Yukon citizens to nothave these vast resources available forfuture generations’ economic needs.”
A Whitehorse resident shared this:
“The final recommended plan does nottake into consideration our economy, ourfuture or what is fair to the interests of theterritory. We should not let foreign envi-ronmental groups, who contribute little tothe health and wellbeing of the Yukon,determine our future. Outfitting conces-sions and eco�tourist groups leave alarge footprint on the land, just as muchas any exploration program in the area.Maybe wilderness tourism companies andoutfitters should be charged publicresource as well as reclamation fees, as isstandard in the mining industry?”
Another Whitehorse resident offered:“I support a more balanced land use plan,one that shares the values of everyone.The final recommended plan does nottake into consideration jobs, employmentand the Yukon being able to pay its billsin the long term.”
Respect the Umbrella Final AgreementUnder Chapter 11 of the Umbrella
Final Agreement, the government mustconsult with affected First Nations andany affected Yukon community and thenapprove, reject or modify the plan as itapplies to Crown land; about 97 percentof the Peel region is Crown land. Underthe UFA, the affected First Nations alsomust consult with government and thenapprove, reject or modify the plan as itapplies to their respective settlementlands.
Some comment reflected the perspec-tive that the introduction by the Yukongovernment of new land use designationsand concepts, as part of its final consulta-tions on the Final Recommended Plan forthe Peel Watershed, is, in effect, a viola-tion of section 11.6.3 of the 1993Umbrella Final Agreement. From thisperspective, the Yukon government waslimited to public consultations on the FRPand that the introduction of its own pro-posals prepared in�house and independ-
ently from the PWPC are in contradictionwith the Yukon government’s land useplanning obligations. Finally, this per-spective is also related to the view that theYukon government had ample opportuni-ty to introduce its proposed designationsand concepts in support of a more bal-anced land use planning approach back in2009, and since it failed to do so at thattime, has effectively abrogated any rightsto do so at this time.
A Whitehorse resident, for example,said: “The Peel Commission’s work andplan are the result of a process laid outunder the Final Agreements. Theseprocesses were created to ensure thatcommunities make decisions about theirresources at a local level. Final approvalby the Minister is there to ensure account-ability of the process, not as a means toimplement a different agenda. If therewas a significant problem with the Peelplanning process, itself, then that shouldbe examined. But if the process wassound (and I believe that it was) and pro-duced a result not to the taste of the gov-ernment of the day, then that plan shouldstill be respected.”
From a Yukon resident: “After years ofdiscussion and research, within theparameters of a transparent process led bythe Peel Watershed PlanningCommission, the people of the Yukonfinalized a plan to protect the PeelWatershed in 2011. The details of thesedeliberations can be found in theUmbrella Final Agreement, a contractbetween the Yukon government and FirstNations. The plan being presented by (theYukon government), although elected torepresent the people of the Yukon, is notthe existing plan outlined in that agree-ment. Our current government has devel-oped its own revised plan from behindclosed doors. […] So in summary, our
15NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF APRIL 28, 2013
Cell: (907) 306-7135 Email: [email protected]
Cell: (907) 727-8686 Email: [email protected]
Stewart Smith Ryan Mae Lucas
• Approximately 6,000 total acres of mining claims available (1,000 acres are patented)
• Lots of heavy/light min-ing equipment (D8 s, D9 s, Nodwell drills, etc)
• Transportation vehicles, large mechanic shop, mul-tiple living quarters, & other camp related structures
• 5,000 foot airstrip big enough for DC-4 and DC-6 aircrafts
• More than 600,000 ounces of gold has been removed from the Candle area with pos-sible reserves up to 400,000 ounces remaining on site
• Hard rock potential
• Geological data, drilling reports, surveys, and pro-duction reports are available upon request
• Includes 1,640 acres of pay
dirt, huge suction dredge,
dozers, mining camp, and
credible exploration data
with package
• Located in the Northern
Innoko Mining District of
Western Alaska (260 air
miles from Anchorage)
• 17,330 ounces of proven
ground at cut off and much
more virgin ground to
explore
• Geological data, drilling
reports, surveys, and
production reports are
available upon request
Bear Creek Mine - $8.5 Million Jewel Monarch - $198,000Soo Shepard Mine - $10 MillionCandle Creek Mine - $5 Million
PLACER PLACERLODE LODE
• The Soo Gold Project is
situated on the north side of
Pedro Dome, Fairbanks, AK
• Exploration & mining
mineable grades
• The Property is comprised
of two sets of claims.
• 450,745 oz of probable gold
reserve
• $50 million plus in property
infrastructure with road
access to the property
• Over $128 Million of gold
has been mined
• 300 acres with extensive drill
logs and exploration data
• 1,410 acres of mining claims
• The Jewel Mine is 8 miles from Girdwood near the head of Crow Creek, .5 mile South of the Monarch veins at an elevation of 3,450 feet
• Total recorded production, including that of the Jewel Mine was 4,933 ounces Au and 996 ounces Ag
• Mill has burned so there is no equipment of value
• Prospective buyers must
amount of due diligence to determine the lode feasibility & permitting requirements
• A 5 acre mill site is included in the purchase price
• Approximately 25.16 total acres
MINING CLAIMS BUY, SELL, OR LEASE
continued from page 14
PEEL WATERSHED
see PEEL WATERSHED page 19
Mining Companies
Kinross Fort Knox/Fairbanks Gold Mining Inc.Fairbanks, AK 99707Contact: Anna Atchison, Manager, Community and Government RelationsPhone: (907) 490-2218 Fax: (907) 490-2290E-mail: [email protected]: www.kinross.comLocated 25 miles northeast of Fairbanks, Fort Knox isAlaska’s largest producing gold mine; during 2011,Fort Knox achieved 5 million ounces of gold pro-duced, a modern record in Alaska mining.
Usibelli Coal MineFairbanks, AK 99701Contact: Bill Brophy, VP Customer RelationsPhone: (907) 452-2625Fax: (907) 451-6543Email: [email protected]: www.usibelli.comOther OfficePO Box 1000Healy, AK 99743Phone: (907) 683-2226Usibelli Coal Mine is headquartered in Healy, Alaskaand has 700 million tons of coal reserves. UCM pro-duces an average of 2 million tons of sub-bituminouscoal each year.
Service, Supply & Equipment
Alaska Air Cargo • Horizon Air CargoP.O. Box 68900 SEAFZSeattle, WA 98168Contact: Joe Sprague, Vice President of CargoPhone: (206) 392-2705 or 800-2ALASKA
Fax: (206) 392-2641E-mail: [email protected]: www.alaskacargo.comAward winning cargo services to more places, moreoften, with more lift to, from, and within the stateof Alaska.
Alaska Analytical Laboratory1956 Richardson HighwayNorth Pole, AK 99705Phone: (907) 488-1266 • Fax: (907) 488-077E-mail: [email protected] analytical soil testing for GRO, DRO,RRO, and UTEX. Field screening and phase 1 and 2site assessments also available.
Alaska Earth SciencesAnchorage, AK 99515Contact: Bill Ellis, Rob Retherford, ownersPhone: (907) 522-4664 • Fax: (907) 349-3557E-mail: [email protected] full service exploration group that applies earthsciences for the mining and petroleum industries pro-viding prospect generation, evaluation and valua-tion, exploration concepts, project management,geographic information systems and data manage-ment. We also provide camp support and logistics,geologic, geochemical and geophysical surveys.
Alaska Frontier ConstructorsP.O. Box 224889Anchorage, AK 99522-4889Contact: John Ellsworth or Chris LedgerwoodPhone: (907) 562-5303Fax: (907) 562-5309E-mail: [email protected]: akfrontier.comAlaskan heavy civil construction company specializing
in Arctic and remote site development with theexperience, equipment and personnel to safely andefficiently complete your project.
Alaska Steel Co.1200 W. DowlingAnchorage, AK 99518Contact: Joe Pavlas, outside sales managerPhone: (907) 561-1188Toll free: (800) 770-0969 (AK only)Fax: (907) 561-2935E-mail: [email protected] Fairbanks Office:2800 South CushmanContact: Dan Socha, branch mgr.Phone: (907) 456-2719 • Fax: (907) 451-0449Kenai Office:205 Trading Bay Rd.Contact: Will Bolz, branch mgr.Phone: (907) 283-3880 • Fax: (907) 283-3759Rebar Division1200 W. DowlingAnchorage, AK 99518Contact: Mike Galyon, rebar mgr.Phone: (907) 561-1188 • Fax: (907) 562-7518Full-line steel, aluminum, and rebar distributor.Complete processing capabilities, statewide service.Specializing in low temperature steel and wear plate.
Arctic FoundationsAnchorage, AK 99518-1667Contact: Ed YarmakPhone: (907) 562-2741 • Fax: (907) 562-0153Email: [email protected]: www.arcticfoundations.comSoil stabilization – frozen barrier and frozen coredams to control hazardous waste and water move-
Companies involved in Alaska andnorthwestern Canada’s mining industry
D I R E C T O R Y
The Red Dog mine in northwest Alaska.
17NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF APRIL 28, 2013
ment. Foundations – maintain permafrost for durablehigh capacity foundations.
Austin Powder CompanyP.O. Box 8236Ketchikan, AK 99901Contact: Tony Barajas, Alaska managerPhone: (907) 225-8236 • Fax: (907) 225-8237E-mail: [email protected] site: www.austinpowder.comIn business since 1833, Austin Powder providesstatewide prepackaged and onsite manufacturedexplosives and drilling supplies with a commitmentto safety and unmatched customer service.
Calista Corp.301 Calista Court, Suite AAnchorage, AK 99518Phone: (907) 279-5516 • Fax: (907) 272-5060Web site: www.calistacorp.com
Construction Machinery Industrial, LLC5400 Homer DriveAnchorage, AK 99518Contact: Robert Fairbanks, Sales ManagerPhone: (907) 563-3822Fax: (907) 563-1381Email: [email protected]: www.cmiak.com
ERA Helicopter6160 Carl Brady DriveAnchorage, AK 99502Contact: David Sell, Business Development AlaskaPhone: (907) 550-8607Fax: (907) 550-8608E-mail: [email protected]: www.erahelicopters.comHelicopter charters, flight-seeing tours, aerial pho-tography, oil and gas support, mineral exploration,construction, seismic remote site work, internal andexternal load, heli-hiking and sled-dog adventures.
GCI Industrial TelecomAnchorage:11260 Old Seward Highway Ste. 105Anchorage, AK 99515Phone: (907) 868-0400Fax: (907) 868-9528Toll free: (877) 411-1484Web site: www.GCI-IndustrialTelecom.comRick Hansen, [email protected] Johnson, Business Development [email protected]:Aurora Hotel #205Deadhorse, Alaska 99734Phone: (907) 771-1090Mike Stanford, Senior Manager North [email protected], Texas:8588 Katy Freeway, Suite 226Houston, Texas 77024Phone: (713) 589-4456Hillary McIntosh, Account [email protected] Industrial Telecom provides innovative solutionsto the most complex communication issues facingindustrial clientele. We deliver competitive services,reputable expertise and safely operate under themost severe working conditions for the oil, gas andnatural resource industries. GCI-your best choice forfull life cycle, expert, proven, industrial communica-tions.
Global Equipment Services Inc. 3820 Schact St. Fairbanks, AK 99701Contact: Jeff Dahl, General ManagerPhone (425) 531-1854Email: [email protected]: www.GESequipment.comGlobal Equipment Services Inc. purchases, sells andrents high quality heavy equipment worldwide witha strong emphasis on high quality work readyCaterpillar Track type tractors.
HDR Alaska Inc. 2525 C St., Ste 305Anchorage, AK 99503Contact: Jaci Mellott, Marketing CoordinatorPhone: (907) 644-2091Fax: (907) 644-2022Email: [email protected]: www.hdrinc.comHDR Alaska provides engineering, environmental,planning, and consultation services for mining andmineral exploration clients. Services include: biologicalstudies; cultural resources; project permitting; NEPA;stakeholder outreach; agency consultation; and envi-ronmental, civil, transportation, energy, and heavystructural engineering.
Jackovich Industrial & Construction SupplyFairbanks, AK 99707Contact: Buz Jackovich
Phone: (907) 456-4414 • Fax: (907) 452-4846Anchorage officePhone: (907) 277-1406 • Fax: (907) 258-170024- hour emergency service. With 30 years of experi-ence, we’re experts on arctic conditions and extremeweather.
Judy Patrick Photography511 W. 41st Ave, Suite 101Anchorage, AK 99503Contact: Judy PatrickPhone: (907) 258-4704Fax: (907) 258-4706E-mail: [email protected]: www.judypatrickphotography.comCreative images for the resource development indus-try.
Keller Williams Commercial101 West Benson, Ste. 503Contact: Stewart Smith, Associate BrokerAnchorage, AK 99503Phone: (907) 865-6505Cell: (907) 727-8686Email: [email protected]: Ryan Mae Lucas, AssociateCell: (907) 360-7135Email: [email protected]: www.stusell.com;www.AKMiningClaims.comMining Claims to buy, sell, or lease, call the Alaskaprofessionals. We provide real estate brokerage serv-ice to the mining industry, with over 35 years of com-mercial experience. Call for a list of our featuredproperties.
Last Frontier Air Ventures39901 N. Glenn Hwy. Sutton, AK 99674Contact: Dave King, ownerPhone: (907) 745-5701Fax: (907) 745-5711E-mail: [email protected] Base (907) 272-8300Web site: www.LFAV.comHelicopter support statewide for mineral exploration,survey research and development, slung cargo,video/film projects, telecom support, tours, crewtransport, heli skiing. Short and long term contracts.
LyndenAlaska Marine Lines • Alaska Railbelt MarineAlaska West Express • Lynden Air CargoLynden Air Freight • Lynden InternationalLynden Logistics • Lynden TransportAnchorage, AK 99502Contact: Jeanine St. JohnPhone: (907) 245-1544 • Fax: (907) 245-1744Email: [email protected] combined scope of the Lynden companiesincludes truckload and less-than-truckload highwayconnections, scheduled barges, intermodal bulk
chemical hauls, scheduled and chartered airfreighters, domestic and international air forwardingand international sea forwarding services.
Northern Air Cargo3900 W. International Airport Rd. Anchorage, AK 99502Contact: Mark Liland, acct. mgr. Anch./Prudhoe BayPhone: (907) 249-5149 • Fax: (907) 249-5194Email: [email protected] • Website: www.nac.aeroServing the aviation needs of rural Alaska for almost50 years, NAC is the states largest all cargo carriermoving nearly 100 million pounds of cargo on sched-uled flights to 17 of Alaska’s busiest airports. NAC’sfleet of DC-6, B-727, and ATR-42 aircraft are availablefor charters to remote sites and flag stops to 44 addi-tional communities.
Pacific Rim Geological ConsultingFairbanks, AK 99708Contact: Thomas Bundtzen, presidentPhone: (907) 458-8951Fax: (907) 458-8511Email: [email protected] mapping, metallic minerals exploration andindustrial minerals analysis or assessment.
Pebble Partnership3201 C St., Suite 604Anchorage, AK 99503Phone: 907-339-2600www.pebblepartnership.com
PND Engineers Inc.1506 W. 36th Ave. Anchorage, AK 99503Phone: (907) 561-1011Fax: (907) 563-4220Website: www.pndengineers.comFull-service engineering firm providing civil, structur-al, and geotechnical engineering, including miningsupport, resource development, permitting, marineand coastal engineering, transportation engineering,hydrology, site remediation, and project manage-ment.
TTT Environmental LLC 4201 “B” St.Anchorage, AK 99503Contact: Tom Tompkins, general managerPhone: 907-770-9041 • Fax: 907-770-9046Email: [email protected]: www.tttenviro.comAlaska’s preferred source for instrument rentals,sales, service and supplies. We supply equipment forair monitoring, water sampling, field screening, PPEand more.
Taiga Ventures2700 S. CushmanFairbanks, AK 99701Mike Tolbert - presidentPhone: 907-452-6631 • Fax: 907-451-8632Other offices:Airport Business Park2000 W. International Airport Rd, #D-2Anchorage, AK 99502Phone: 907-245-3123Email: [email protected] site: www.taigaventures.comRemote site logistics firm specializing in turnkeyportable shelter camps – all seasons.
Total Safety U.S. Inc.209 E. 51st Ave.Anchorage, AK 99503Contact: Tyler Zollinger, District Manager.Phone: (907) 743-9871Fax: (907) 743-9872E-mail: [email protected]: www.totalsafety.comA full service safety company specializing in RemoteMedical Services, H2S Services, Industrial Hygiene,and Safety Consultants. Total Safety provides Service,Rental, or Sales of Safe Breathing Air, Gas Detection,and Technical Safety Equipment.
URS Corp.700 G Street, Suite 500Anchorage, AK 99501Contact: Joe Hegna, Alaska Vice President/AlaskaOperations ManagerPhone: (907) 562-3366 • Fax: (907) 562-1297E-mail: [email protected]: www.urscorp.comProvide engineering, construction and technical serv-ices with capabilities to support all stages of projectlife cycle. We offer a full range of program manage-ment; planning, design and engineering; constructionand construction management; operations and main-tenance; and decommissioning and closure services.
Advertiser IndexAlaska Airlines Cargo . . . . . . . . . . . . . . . . . . . . . . . 10Alaska Analytical Laboratory. . . . . . . . . . . . . . . . . . 7Alaska DreamsAlaska Earth Sciences . . . . . . . . . . . . . . . . . . . . . . . . 6Alaska Frontier Constructors . . . . . . . . . . . . . . . . . . 8Alaska Steel Co.Arctic Foundations. . . . . . . . . . . . . . . . . . . . . . . . . . . 4Austin Powder Co.Calista Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Constantine Metal ResourcesConstruction Machinery . . . . . . . . . . . . . . . . . . . . . 20Fairbanks Gold Mining/Fort Knox Gold Mine . . . . 9GCI Industrial Telecom . . . . . . . . . . . . . . . . . . . . . . 13General Refining Corp.Global Equipment ServicesGreer Tank Inc.IFR Workwear Inc.Jackovich Industrial & Construction Supply. . . . . 19Judy Patrick Photography . . . . . . . . . . . . . . . . . . . . 5Keller Williams Commercial . . . . . . . . . . . . . . . . . . 15Last Frontier Air Ventures. . . . . . . . . . . . . . . . . . . . . 8Lynden. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Nature Conservancy, TheNorthern Air CargoPacific Rim Geological Consulting . . . . . . . . . . . . . . 8Pebble Partnership . . . . . . . . . . . . . . . . . . . . . . . . . 11PND Engineers Inc.Salt+Light CreativeSourdough Express Inc.Taiga Ventures/PacWest Drilling Supply . . . . . . . . 6Total SafetyURS Corp.Usibelli Coal Mine
Responding to the request, the environ-mental agency initiated the Bristol BayWatershed Assessment to see if thisunprecedented stretch of its authority isjustified.
A draft Bristol Bay WatershedAssessment released in May 2012 wasapplauded by Pebble opponents becausethe hypothetical scenario used by EPAseems to demonstrate that a large mine inBristol Bay would damage the fisheriesthere.
Pebble supporters argue that the water-shed assessment is fatally flawed from theconcept.
“A pre-design assessment will always
use incorrect mine design features (becausethe design has not been done); it will alwayslack important environmental features ofthe site (because most or all of the facilitysites have not been identified); and it willomit prevention and mitigation measures(because they have not been identified bythe company or the government). For thesereasons, the pre-design ecological riskassessment is an unsupportable methodolo-gy that cannot produce reliable conclu-sions,” Bob Loefler, a visiting professor atthe University of Alaska AnchorageInstitute of Social and Economic Research,wrote.
Or, as Pebble CEO Shively put it,“They developed a mine that could not bepermitted and then went on to show peo-ple that since it could not be permitted, it
would kill fish.”A 12-person peer review panel charged
by the EPA to scrutinize the watershedassessment found multiple shortcomings inthe report.
Based on the critiques made by the 12-person panel and the some 230,000 com-ments on the assessment, EPA said it is tak-ing the following steps to shore up the draftassessment:
•Clarifying the overall purpose andobjective of the assessment;
•Clarifying the development and use of arealistic mining scenario;
•Expanding the use of the conceptualmodels to better illustrate how mining activ-ities could potentially affect Bristol Bay’sfishery resources; and,
•Enhancing the review of modern min-
ing practices to consider additional strate-gies for mitigation of potential adverseimpacts of mining.
To determine if the adjustments to thedraft assessment reflect the peer reviewers’feedback, the EPA has asked the 12 originalpanel members to take a look at the updatedreport.
The reworked assessment is due out inthe coming days, at which point the peerreviewers and public will be afforded theopportunity to provide input.
The EPA said the Bristol Bay WatershedAssessment will be finalized in 2013. Whileit is unclear what the EPA intends to do withthe finished report, it is certain that if theenvironmental agency tries to pre-emptive-ly block Pebble partnership from applyingfor permits there will be a major pushbackfrom Alaska and Washington D.C.
“If EPA should decide to deny thePebble partnership the benefit of dueprocess, ladies and gentlemen, I’m afraidit may just be the first of many times thatwe may see that abuse of process; so wesimply can’t allow it to happen,” said Sen.Lisa Murkowski, R-Alaska. �
continued from page 10
PEBBLE PLAN
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18NORTH OF 60 MINING
PETROLEUM NEWS • WEEK OF APRIL 28, 2013
� C A N A D A ’ S N O R T H E R N T E R R I T O R I E S
North should prosper despite tough timesEconomists cite vulnerable global economy, firming base metal prices and tight financial markets as factors in near-term outlook
By ROSE RAGSDALEFor Mining News
The mining industry in northern Canada is expectedto continue to flourish in 2013 despite current chal-
lenges, including slow economic growth, lower com-modity prices and dismal financial markets, according toeconomists at The Conference Board of Canada.
“The territories are not immune to the vulnerability ofthe global economy,” said Marie-Christine Bernard,associate director, forecasting and analysis at TheConference Board. “New mine development and pro-duction will provide a solid economic foundation forCanada’s territories. However, base metal prices are onlynow firming up, after slipping in 2012. And tight finan-cial markets are making it more difficult for mining com-panies to raise capital, which is delaying or downsizingprojects.”
In “Territorial Outlook: Winter 2013,” publishedMarch 18 by The Conference Board of Canada’s Centrefor the North, the economists said the global economy ismaking its presence felt in Canada’s territories, dampen-ing – but not dousing – the mining boom under way inCanada’s North.
The outlook, which is published twice yearly, exam-ines the economic and fiscal outlook for each of the ter-ritories, including output by industry, labor market con-ditions, and the demographic make-up. It is funded bythe Centre for the North, which under a five-year man-date works with Aboriginal leaders, businesses, govern-
ments, communities, educational institutions, and otherorganizations to provide insights into how sustainableprosperity can be achieved in Canada’s North. TheCentre aims to help to establish and implement strate-gies, policies and practices to transform that vision intoreality.
The winter 2013 report cites a number of recentdevelopments in the territories that will affect the near-to medium-term outlook for mining in the territories.
Nunavut’s mining sector is experiencing both acceler-ating growth and downside risks, the board noted.Production at the Meadowbank gold mine in 2012 farexceeded initial predictions, and output is expected torise over the next three years.
On the other hand, the Mary River iron ore projectwas recently scaled back from planned C$4-billionexpenditures to a C$740-million project. Difficulty inobtaining financing led to the plans being revised down-ward. The revised plan is expected to produce less ironore and not include a rail line or the Steensby Inlet port,although it will begin operations earlier than it wouldhave under the larger project.
New mining developments in Nunavut, however, are
expected to propel growth in real gross domestic productin that territory over the next few years, according to theeconomists. Even with the downgrade at Mary River,overall economic growth in Nunavut is forecast to hit 3.4percent in 2013 and jump to 8.8 percent in 2014.
In the Northwest Territories, real economic growthwill remain depressed this year as diamond productiondeclines, according to the report. Growth of 0.2 percentis anticipated in the territory in 2013, which is animprovement over declining real GDP in 2011 and 2012.The diamond mining industry is both maturing andentering a long-term decline.
“Luckily for the territory, its fortunes are not all tiedto the diamond industry – several metal ore mines will bedeveloped and explored over the next few years,” theeconomists said.
Stronger economic growth of 2.6 percent is forecastfor the Northwest Territories in 2014.
Yukon Territory’s real GDP is forecast to increase bya strong 6.3 percent in 2013 as mineral production con-tinues to climb and construction gets a lift from mineraldevelopment. New mines are expected to be developedin the Yukon, leading to at least five producing mine dur-ing the mid- and latter part of the decade.
Yukon’s next mine will be Victoria Gold’s Eagle goldmine, which is scheduled to begin construction this year.
Overall, new mine developments in the North willprovide a solid foundation for job creation and incomegrowth during the next year, the Conference Board con-cluded. �
nation. May 10 has been once againdeclared Alaska Mining Day. Wewho are associated with the indus-try have just cause to celebrate thishistorical anniversary of the MiningLaw of 1872, but I urge everyonewho is associated with the miningindustry in Alaska in any way totake advantage of this opportunityto share our notable and noble min-ing history with all our friends andneighbors, openly, visibly and withgreat joy. Let’s work together toraise the profile of this great indus-try and the exemplary people whowork in it. �
continued from page 9
TANGEN
The outlook, which is published twice yearly,examines the economic and fiscal outlook for
each of the territories, including output byindustry, labor market conditions, and the
demographic make-up.
current government wants to implement arevised plan that requires that
Yukoners put aside all the previous pub-lic consultation and study that has goneinto an informed land use/protection plan;agree to less protected land and more landdesignated to mining and gas/oil explo-ration; ignore the fact that we have a legalcontract with First Nations which outlineshow we said we would deal with Peel area;
and embrace the fantasy that we can devel-op a wilderness and it will still be wild.”
And from a British Columbia resident:“In the final analysis (the Yukon govern-ment’s) actions in rejecting the plan appearto be a prima facie violation of the YukonLand Claim Agreement and failure to liveup to the spirit of the (Umbrella FinalAgreement). In fact, one might argue thatif the commission had proposed protectingonly 20 percent of the region there wouldbe strong pressure to accept it from somequarters on the grounds that it had been
arrived at through due process.”Other themes threaded through the
comments include: Process has been unde-mocratic and disrespectful; exhibit coura-geous leadership; future land use planninghas been undermined; roads and wilder-ness are incompatible; new designationsand concepts are not a land use plan;unhappiness with the open house consulta-tion format; preference for 100 percentprotection of the Peel Watershed; opposi-tion to the Restricted Use Wilderness Areadesignations; support for the RUWA desig-
nations; and support for the Yukon govern-ment proposals.
Yukon Environment Minister CurrieDixon said, “The government will reviewthe ‘What We Heard’ document, completeconsultations with affected First Nations,and then move to conclude the planningprocess in a way that achieves balance andrespects the environment as well as all sec-tors of the economy.”
The “What We Heard” report and acompilation of all comments received areavailable at www.peelconsultation.ca. �
19NORTH OF 60 MININGPETROLEUM NEWS • WEEK OF APRIL 28, 2013
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continued from page 15
PEEL WATERSHED
infrastructure, including a single-lane access road withdouble-lane sections to support construction and ongoingoperations. Copper Fox’s plan is to reach agreement withGalore Creek Mining Corp., owner of the nearby GaloreCreek copper-gold project, regarding joint use of theaccess road from Highway 37 (Kilometer 0) to aboutKilometer 65, including construction of the More CreekCanyon Bridge, and to complete of an additional 25.2kilometers (16 miles) of the Galore Creek road for a totaldistance of 65.2 kilometers (40.4 miles).
The access road would then turn north and Copper Foxwill construct about 40 kilometers (25 miles) of new roadthrough the Mess Creek Valley to the mine site. Theaccess road will be used to transport material and con-sumables to and from the mine site, and to deliver minecapital equipment and would have controlled access toensure the health and safety of company personnel andthe public, as well as to protect the environment.
Other infrastructure envisioned for the projectincludes a new on-site airport, capable of receiving air-craft with a capacity of up to 78 passengers; and watersupply, distribution and reclamation systems. Mine per-sonnel would be transported to and from the Schaft Creeksite via aircraft.
More work lies aheadCopper Fox is currently preparing the Province of
British Columbia Environmental Assessment Applicationand a federal environmental impact statement, both ofwhich are required for the company to obtain a BC EACertificate and federal approval. Copper Fox anticipatessubmitting the EA application and EIS as early as Q32013.
Copper Fox is working with Stantec Consulting Ltd.and other environmental consultants to complete variousstudies and reports required for the EA application. Thejunior is also developing permit applications required toconstruct the access road to the mine site. Access roadpermits have been prioritized based on the constructionschedule presented in the feasibility study. Other permitapplications required for mine site construction will fol-low completion of the EA application and EIS.
At Jan. 31, the company had working capital of slight-ly more than C$5.04 million. It also raised anotherC$2.65 million in a private financing that closed in earlyApril. These funds will cover costs associated with theEA application and development expenses at Schaft
Creek as well as the company’s copper projects inArizona and general operating expenses.
From completion of the feasibility study in December,the time period estimated to allow for permitting, detailedengineering, equipment procurement, construction andproduction startup at Schaft Creek is about seven-years,with phase 1 of commercial production envisioned inDecember 2019 followed by phase 2 in August 2020.
However, Copper Fox’s management believes thisperiod could be significantly shortened during the detailedengineering phase by running concurrent activities.
Hurdles yet to clearThough the company has made considerable progress
in advancing the Schaft Creek project, the venture still isa ways from overcoming all of its challenges. This wasreflected in the reaction of investors to the feasibilitystudy in December. Copper Fox shares fell more than 21percent after the study was released, down to about 83cents on the TSX Venture Exchange. The stock is cur-
rently trading at about 60 cents per share.Project costs remain critical. For example, life-of-
mine copper production costs net of gold, silver andmolybdenum credits jumped in the feasibility study toC$1.15 per pound from a previous estimate of negativeC32 cents/lb.
Stewart said estimates for production costs soared onthe significant increase in operating costs and lower metalrecoveries identified in the feasibility study.
However, additional work in a number of differentareas, such as improving metal recovery costs, upgradinginferred resources and boosting mill throughput, not tomention the impact of higher copper prices, couldimprove the project’s economics dramatically, heexplained.
“If this project goes into production, it will be a fairlydynamic operation. That’s why the feasibility study has abuilt-in flexibility at the mine site to continue enhancingthe economics of the project going forward,” Stewart toldthe analysts. “There is a lot of work to be done, all ofwhich could have a significant impact on the project.Copper is trading at about US$3.50 a pound and givenwhat’s been happening in China, my guess is the price isgoing up.”
Options for the futureCopper Fox has made no secret of its desire to sell the
Schaft Creek project at the right time. “We’ve always groomed this project for a potential
buyer,” said Stewart.Once Teck acts on its option, the Copper Fox CEO
said the junior can approach other parties about selling itsremaining interest in the project. If the major chooses notto exercise its earn-back option, then Copper Fox willhave 100 percent ownership of the project and can pursuea number of different avenues, including mounting a2013 work program at Schaft Creek.
Stewart, who also chairs Copper Fox’s board of direc-tors, said he will recommend to the board that the com-pany do more drilling and metallurgical work this yearand a “little bit of engineering work” to determinewhether the time to production can be shortened and pos-sibly look at the possibility of expanding the size of theproject.
If Teck elects to earn-back a controlling interest in theproject, it will have four years to develop Schaft Creekunder terms of the original option agreement. But Stewartsaid that he does not know whether this deadline, draftedin the 1960s version of the agreement, would stand up inthe courts today. �
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PETROLEUM NEWS • WEEK OF APRIL 28, 2013
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