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New owners.

One of Alaska's most promising mineral sites already has changed hands and a sale of a second mineral-rich property is pending. Cominco Ltd. of Vancouver, British Columbia, purchased the Quartz Hill molybdenum site, and Amax Gold of Golden, Colo., is pursuing the Fort Knox gold deposit.

Cominco acquired the Quartz Hill molybdenum property from U.S. Borax & Chemical Corp. in September for an undisclosed amount. The proposed mine, 45 miles east of Ketchikan, has not been developed because of adverse rulings by the Environmental Protection Agency regarding underwater disposal of mine tailings in Wilson Arm. Don Finney, U.S. Borax's former manager in Ketchikan and now manager for Cominco, says that with 10 percent of the world's reserves, Quartz Hill easily would be the largest molybdenum mine in the world. Molybdenum is used in steel alloys and electrical equipment.

According to Finney, U.S. Borax spent more than $100 million in 17 years trying to clear regulatory hurdles, and it would take an additional $900 million to develop the site. Studies indicate the operation could yield 80,000 tons of ore per day for 55 years. Finney says Cominco is acquiring the property as a long-term investment and has no plans to develop it until molybdenum prices rise.

In the Interior, Amax has expressed interest in purchasing the Fort Knox property from Fairbanks Gold Ltd. in a two-for-one stock swap. Gilmore Gold Inc., a minority shareholder, would become a wholly owned subsidiary of Amax. Acquisition of the property would double Amax's gold reserves.

Fairbanks Gold has been exploring and developing the site on Gilmore Dome near Fairbanks since its discovery in 1987. A study completed in May determined that the proposed mine could produce 4.1 million ounces of gold over a 16-year life. The project is expected to be one of the largest gold mines in the United States.

The purchase is contingent on shareholders of Fairbanks Gold tendering at least 90 percent of their outstanding shares, unless this condition is waived by Amax Gold. The transaction also must be approved by Amax shareholders and U.S. and Canadian regulatory agencies.
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Title Annotation:Cominco Ltd. purchases Quartz Hill molybdenum site, and Amax Gold pursues Fort Knox gold deposit
Publication:Alaska Business Monthly
Article Type:Brief Article
Date:Dec 1, 1991
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