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What attracts mining companies to Alaska? Mineral, human and governmental resources play key roles.

In today's less-than-rosy economic climate and suffocating regulatory atmosphere, why do explorers continue to search for metals and minerals in Alaska? Why do sour-dough prospectors and mining companies alike spend countless days and dollars every year exploring the state? These questions are even more compelling in view of the high cost of exploration in Alaska, with its short work seasons, and the rise of anti-development attitudes and policies in state and national politics.

The answer lies in Alaska's vastness, its diversity and its unsurpassed mineral wealth. It also lies in its people, who embody a spirit of adventure, self-reliance and entrepreneurism. Alaska offers truly immense areas for mineral development, and precisely because of its size and remoteness, is vastly underexplored compared with the rest of the United States.

Alaska encompasses hundreds of geologically-diverse terranes that contain a wealth of resources, including some of the world's largest ore deposits. The state's mountains and ranges, as tough as they are to get around in, are important beyond calculation in providing the uplift and exposure of the Earth's crust to reveal ore deposits. To the explorer, all these aspects translate into a much higher probability of finding a major ore deposit.

An interesting economic comparison can be made between Alaska and northwestern Canada and the Russian Far East. These two regions are nearly identical geographically and geologically to Alaska, and experts estimate that together they support more than 50 operating hard-rock mines; Alaska has two! Although hundreds of theories try to account for this disparity, the important lesson for explorers is that economic viability is attainable across wide arctic and subarctic regions.

Land, Lots of It

Alaska's 366 million acres of surface land and water -- controlled principally by the federal and state governments and Native corporations -- is almost four times the size of California and accounts for almost one-fifth of the total land are of the United States. As set forth in the Alaska Statehood Act (1958), the Alaska Native Claims Settlement Act (1971) and other congressional enactments, about 215 million acres will fall under federal management, and the state government will manage and own about 105 million acres when land selections are finalized. Native regional corporations eventually will own 46 million acres, but due to complexities of land selection and the fact that selections are far from being complete, they currently control a much greater area.

Of course, not all of these lands are explorable. About 77 percent of federal land -- parks, monuments, wilderness areas and other restricted-access holdings -- are closed to development. Fortunately, 92 percent of state lands remain open to mineral entry. Excluding significant bodies of water, federal and state lands open to mineral entry total about 146 million acres. Through lease agreements, almost all Native corporation lands, owned or selected, are explorable. The estimated land available for exploration and development totals well in excess of 200 million acres. No matter how you look at it, that's a lot of land!

Supportive Attitudes

Native corporations directly or indirectly control more than 80 million acres. Much to the delight of mining interests, these corporations now take a more active role in the development of their mineral resources. For example, Cook Inlet Region Inc.'s subsidiary, North Pacific Mining Corp., controls numerous advanced-stage projects, including the Illinois Creek deposit, slated to become Alaska's first Native-owned hard-rock mine. The Red Dog mine, owned by NANA Regional Corp. and operated by Cominco, exemplifies successful cooperation between Native corporations and mining companies.

In addition, Kennecott Exploration Co. has a long-standing relationship with Bering Straits Native Corp. and recently made an agreement with Arctic Slope Regional Corp. Doyon Ltd., the largest Native land holder in the state, negotiated long-term exploration agreements with Central Alaska Gold Co. and American Copper & Nickel Co. (ACNC). Just this year, Doyon put together a multi-year deal with ASA Inc. In Southeast Alaska, Sealaska Corp. has exploration agreements with Cominco and ACNC.

Mining companies find that Native corporations can be much better partners than the state or the feds. Considering the acreages involved and the possibility of business deals, it's no wonder that exploration managers are lured by Native corporations.

Exploration work, whether panning creeks for gold or hopping from ridge to ridge in a helicopter, is ultimately guided by geology, and Alaska contains some of the most diverse geology in the world. To exploration geologists, who know that certain metals associate with particular rock types, this means that just about any metal or mineral can be found in the state.

Carrying the concept of metal and rock associations farther, geologists in recent years have recognized that Alaska is a collage of hundreds of geologic terranes, each unique in terms of geology and resource potential. These new insights not only help to focus exploration, they also have led to the recognition of resource-rich terranes in areas previously thought lacking in mineral potential.

"Elephants" Abound

Alaska hosts some of the world's largest ore deposits, an attraction that cannot be overstated. One example of these immense deposits, known in exploration circles as "elephants," is the Red Dog deposit, which contains at least 85 million tons of ore, grading at 17.1 percent zinc, 5 percent lead, and 2.4 ounces per ton silver.

Based on published reserves for this type of deposit, only Australia's Broken Hill deposit is larger. However, considering that about 90 percent of the Red Dog deposit was lost to erosion and glaciation, its original size was staggering, and may have exceeded the Broken Hill deposit.

The Quartz Hill deposit, east of Ketchikan in southeastern Alaska, containing in excess of 1.5 billion tons of ore with an average grade of .136 of molybdenum disulfide, is the world's largest molybdenum deposit.

Another world-class deposit, the A-J mine in Juneau, already has produced 3.52 million ounces of gold and Echo Bay Mines is developing an additional 4.7 million-ounce reserve.

Geologists consider the Red Mountain deposit near Seldovia to be North America's largest undeveloped chromite deposit.

The Klukwan iron-titanium deposit northwest of Haines contains an estimated 3 billion tons of material averaging 1.6 to 3 percent titanium.

With reported silver and gold grades to 25.3 and .16 ounces per ton, respectively, the 17 million-ton-plus Greens Creek deposit on Admiralty Island is not only a major base-metal producer, but also one of the top producers of precious metal in North America.

Having produced more than 50,000 ounces of gold last year, the Valdez Creek mine near Cantwell is Alaska's largest placer gold operation.

These sorts of deposits spur the interest of any explorer, and exploration managers won't overlook the fact that major discoveries continue to be made. Cominco's recently-discovered Pebble Copper deposit near Iliamna is reportedly the largest copper deposit of its kind in Alaska. Near Fairbanks, AMAX is developing the recently discovered Fort Knox deposit, reported to contain more than 3.2 million ounces of gold. The elephants are out there and people are finding them.

There is much to encourage the mineral explorer in Alaska: land availability, diverse geology, world-class deposits, Alaska's status as the least-explored area in North America, a stable and well-trained work force, the several developing mines, the many recent discoveries and the many operating mines in adjacent Canada and eastern Russia. The future of Alaska's long-term mineral industry depends on today's exploration.

From the part-time prospector to the major mining company, the commitment to the exploration of Alaska is there. As exploration continues and discoveries move toward operating mines, Alaska's mineral future will be assured.

Steven Newkirk is a senior geologist with Cominco Alaska Exploration. He has been in mineral exploration for 16 years and has worked in the Western United States, Canada, Australia and Alaska. He is completing a Ph.D. in economic geology.
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Title Annotation:Mining Special Section
Author:Newkirk, Steven
Publication:Alaska Business Monthly
Article Type:Industry Overview
Date:Nov 1, 1992
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