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Old mine, new ways.

Old Mine, New Ways

Improvements at Alaska's largest open-pit placer mine, the Valdez Creek Mine, are increasing gold yields.

Since the early 1990s, the Valdez Creek mining district near Cantwell in Interior Alaska has proved to be an area filled with rich gold placer deposits. But miners have been challenged to economically tap the resources. Now, newly acquired technology is allowing Valdez Creek Mine's owners to realize record yields from the property.

In the early 1900s, gold went for $17 to $18 an ounce, and men worked five to six months a year at wages of $1 per hour. Today, gold prices are approximately $360 an ounce; hourly wages for employees are in double figures; and some placer gold mines operate year-round.

Cambior Alaska Inc., the Alaska subsidiary of a major Canadian gold producer based in Montreal, Quebec, became the operator of Valdez Creek last fall, when the firm acquired nearly 25 percent additional interest in the project. Cambior Alaska now owns 75 percent of the mine.

With production in full swing, 1991 looks to be very promising in terms of gold yield. "We are looking to produce approximately 80,000 ounces of gold by the end of the year," says Alison Knapp, spokeswoman for Cambior.

Last year, operating only from August through December, the mine produced 10,000 ounces. Production at Valdez Creek Mine had been halted because of weak gold prices and the large investment required to divert Valdez Creek so that the gold-bearing gravel upstream could be mined. But in the summer of 1990, higher gold prices persuaded Cambior and partner Camindex Resources Inc., based in Toronto, Canada, to resume mining and move ahead with improvements.

Valdez Creek Mine, sometimes referred to as the Denali Mine, is Alaska's largest open-pit placer mine. Located on the old Denali townsite some 215 miles north of Anchorage and 60 miles east of Cantwell, the mine is in the Valdez Creek mining district on the western flank of the Clearwater Mountains. It lies just upstream from the confluence of the Susitna River and Valdez Creek.

The mine was operated from 1984 through 1989 by Valdez Creek Mining Co. Owned by three mining firms -- Camindex Mines Ltd., Cambior Alaska and American Barrick Corp. -- the Valdez Creek Mine was Alaska's largest gold mine for five of its six years and produced more than 200,000 ounces of refined gold. The property had been obtained in 1983 from Curt Ames and Doug Clark, who had operated the mine on a smaller scale since 1980.

Credit for the initial discovery of gold at Valdez Creek is given to a team of four men led by Peter Monahan, who left the village of Valdez in 1903 to explore the area up the Susitna River. They discovered gold at the mouth of a creek that they immediately named Valdez Creek in honor of their native town.

A year later the men returned and discovered the Tammany Channel to the right of the creek. This was the beginning of a long period of mining activity in the area that lasted until the beginning of World War II. During subsequent years, until the 1980s, mining activity at the Valdez Creek prospect was conducted intermittently by various operators.

According to Knapp, Cambior Alaska drew up plans to make improvements that included building a new wash plant and installing a diversion dam and 7,000 feet of diversion channel during the winter of 1990-91. By the end of 1990, 80 percent of the necessary work was completed, including 5,200 feet of the diversion channel constructed at the base of the hillside.

Aside from 1990, gold production at Valdez Creek Mine increased in recent years. In 1988, nearly 45,000 ounces of refined gold were taken. A year later, with operations terminating in October 1989, refined gold production hit roughly 72,000 ounces, making Valdez Creek Mine Alaska's largest gold producer.

One reason for the increase in gold yield is the mine's year-round production. In the fall of 1986, two key surface facilities, the wash plant and pumping station, were modified to allow year-round mining, which began in March 1987. That switch from seasonal operations marked the first time a placer gold mining project had been operated on a year-round basis in sub-Arctic Alaska.

Uncovering Pay Dirt. Conventional open-pit mining methods are used at Valdez Creek. Waste gravel, or overburden, is removed by loaders and hydraulic shovels, then is transported by trucks to be used as fill, simultaneously ensuring an ongoing reclamation project. As deep as 270 feet thick, the overburden is composed of glacially derived sediments such as sand, silt, clay, gravel and boulders. On average, gold-bearing gravel, called pay, is covered by 170 feet of overburden.

Douglas Nicholson, chief engineer at Cambior, says, "Our large, high-capacity equipment, including shovels, loaders, dozers, and trucks, moves approximately 25,000 cubic yards of overburden every day to reach the gold. The gold is typically found at the bedrock level, and we consider a good grade to be about .14 ounce per cubic yard of pay gravel."

During 1991, Cambior's operations are expected to move 750,000 cubic yards of material per month, or 9 million cubic yards over the course of the year, according to Nicholson. "We will move approximately 8.5 million cubic yards of waste and 600,000 cubic yards of pay," he says.

Once the overburden is removed, the gold-bearing gravel is sent to the wash plant for gold recovery. Knapp says the new wash plant is expected to lower operating costs because it is better situated, has an improved design to better process the gold-bearing gravel, and has 60 percent more capacity than the old plant. The wash plant was completed in mid-February 1991 at a cost of nearly $2.8 million.

Steve Borell, executive director of the Alaska Miners Association, says, "I'm real optimistic about the project at the Valdez Creek Mine and think it's beneficial that the wash plant was moved up valley. As they mine farther up valley, the location of the wash plant will help increase production capability and productivity in terms of shorter hauls for the trucks."

The operations at the mine are scheduled to ensure the wash plant receives a constant supply of gold-bearing gravel. Any waste from the wash plant is pumped into a tailings area consisting of several ponds that provide for sedimentation of the solids.

At the wash plant, pay gravel is forced through a series of decreasingly fine screens that wash and sift out materials holding no gold. Material that is three-fourths of an inch and smaller passes into seven parallel sluice boxes, each 35 feet long by 29 inches wide. Each of the seven boxes is lined with artificial turf.

Large nuggets, containing 85.5 percent pure gold, are removed directly from the sluice boxes during the cleaning process. Approximately 60 percent of the nuggets are sold directly to jewelers.

When the sluice boxes are cleaned daily, gold-bearing material is recovered and sent to the gold room. In this last chamber, manual panning and various other techniques sort out fine gold. The majority of the gold particles are small and flat, suggesting they have traveled long distances, whereas gold that is well-rounded and lumpy indicates little stream action and short distances traveled.

The steady supply of pay gravel that is sent to the wash plant is recovered and transported by earth-moving equipment: two Hitachi 801 shovels and one Caterpillar 992 loader. The loading units feed waste and pay gravel to a half-dozen Komatsu 50-ton trucks and four Caterpillar 85-ton haul trucks. Other necessary equipment includes dozers, backhoes, and graders. All of the heavy-duty equipment is operated and maintained around-the-clock, seven days a week, by dozens of employees who spend at least 10.5 hours a day on the job.

According to Knapp, 170 workers -- 144 hourly and 26 salaried employees -- are employed at Valdez Creek Mine. The mine site contains facilities necessary to house and feed 125 people at any given time. "Most of our employees are rotated in sets of two weeks on and one week off," Knapp says. "Approximately one-third of the employees are off at the same time because of rotations. These weekly rotations ensure continuity of services and management."

Knapp adds, "Ninety-eight percent of all of our employees are Alaska state residents. The majority of them live in the Matanuska Valley." Workers also hail from Cantwell, Fairbanks, Anchorage and other parts of the state.

Many workers at the camp are employees of other corporations providing services for the mine. One company is Statewide Services Inc., an Anchorage-based business that caters to remote sites throughout the state.

According to Carol Craig, the firm's project manager, Statewide Services has been providing food, beverages, and housekeeping services to the Valdez Creek Mine for the past five years. "On the average, this mining operation spends $35,000 per month for food and beverages," she says. One-hundred and fifty dozen eggs, 200 pounds of fresh potatoes, 11 prime rib racks, and 30 to 35 cases of soda are ordered in a typical week, according to Craig.

According to Knapp, 95 percent of Cambior's expenditures are strictly within the state of Alaska. Of the projected $22 million annual budget for 1991, $12 million is expected to be spent on payroll.

Present levels of reserves at Valdez Creek ensure that the mine will continue to operate for the next several years. "We have a minimum of five years worth of mining on the property, particularly up valley, on which we own rights now," Knapp says.

"The Valdez Creek mining district is a very highly mineralized area," says Alaska Miners Association's Borell. "It's one of the most active exploration districts in the state and has proven itself as a huge gold placer deposit."

PHOTO : In the gold room at Valdez Creek Mine, fine filters are used to recover the precious metal.
COPYRIGHT 1991 Alaska Business Publishing Company, Inc.
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Title Annotation:Cambior Alaska Inc. uses new mining techniques in the reopened Valdez Creek Mine
Author:Kell, Lori
Publication:Alaska Business Monthly
Article Type:company profile
Date:Jul 1, 1991
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