Alaska mining development in 2015.

• Author: Anderson, Tom
• Position: MINING

As Alaska's fiscal horizon appears ominously inclement because of waning oil prices on a global scale, policymakers, entrepreneurs, and communities across the state are welcoming proverbial clear skies and sunshine when it comes to mining development.

The spectrum of resources Alaska's economy is dependent on includes oil, gas, fisheries, timber, tourism, and a sprinkling of other developmental opportunities. Mining, however, may just be the most robust and expansive of the collective. The success of mining in 2015 and beyond will equate to continued employment and investment in the state, with development at center stage.

Advanced Exploration vs. Producing Mines

The Alaska Miners Association is one of several trade associations and advocacy nonprofit organizations in the state representing mineral interests.

The Alaska Miners Association released The Economic Benefits of Alaska's Mining Industry report in 2014 delineating the mining exploration timeline and overviewing participants. The McDowell Group prepares mining industry economic impact reports for the association annually. The genesis and process of mining is fairly straightforward: mineral potential is determined, initial prospecting occurs, a claim is staked, drilling begins, advanced exploration with economic feasibility and economic studies to accompany permitting follows, then financing for the endeavor, and ultimately the development and production, shipping, waste discard, and cycle of mining ensues.

Most Alaskans may not realize there are only six mines under full operation and production in the state in 2015. These mines are Fort Knox (gold) and Pogo (gold) mines near Fairbanks, Usibelli (coal) in Healy, Red Dog (zinc, lead, silver) north of Kotzebue, and the Greens Creek (zinc, lead, silver, gold) and Kensington (gold) mines in Southeast Alaska.

Advanced exploration projects that are currently going through economic impact and analysis studies, permitting, engineering, and feasibility studies include Wishbone Hill (coal), Upper Kobuk (gold, silver, copper, zinc), Pebble (copper, gold, molybdenum), Niblack (copper, gold, silver, zinc), Livengood (gold), Donlin Gold (gold), Chuitna (coal), and Bokan-Dotson-Ridge (rare earth elements).

While some mining companies keep development project updates and information close to the vest, others are proactive in releasing details on their growth in 2015. To that end, there are projects this year that are worth noting from the mining industry and from which Alaska will share in the success of extraction, delivery, and sales at market.

Greens Creek Mine Expansion

Eighteen miles from Juneau, on the north end of Admiralty Island, Heda Greens Creek Mining Company and its 415 employees operate one of the ten largest producing silver mines in the world. Hecla's corporate biography delineates it purchased just under a 30 percent interest in the massive silver-gold-zinc-lead Greens Creek Mine in 1987. Twenty-one years later Hecla acquired the remainder of the mine from Rio Tinto, which held just over 70 percent interest in Greens Creek, officially owning 100 percent of the mine thereafter. By the next year in 2009 Hecla reported a company record silver production of 10.9 million ounces and cash flow of $115 million.

Fast-forward to 2015 and the company's mining efforts haven't slowed. Construction is now starting for the expansion of the mine's tailings storage facility that will give it capacity through 2026, which is projected to satisfy current reserves and possible future expansion. Capital expenditures will exceed $44 million over the next three years for the project, from 2015 to 2017.

As for actual mining and extraction, this year the efforts are full speed ahead. "We'll continue to spend on underground exploration in 2015 to continue to add to our reserve base. Historically we have always had a ten-year mine life, but over time we have been able to use our exploration success to replace the reserves and hope to continue that success in the future," says Mike Satre, a geologist with the company since 1999 and now serving as the Government and Community Relations manager.

Greens Creek is an underground mine and produces 2,100 to 2,300 tons of ore per day. The mine's primary...