Alaska mining industry optimistic: support services essential to long-term growth.

• Author: Resz, Heather A.
• Position: MINING - Conference news

[ILLUSTRATION OMITTED]

Folks at the Alaska Miners Association's 2009 Convention and Trade Show Nov. 2-8 in Anchorage were optimistic about the 2010 Alaska mining season. The biannual Interior Conference is in Fairbanks March 9-12.

"This year will be better than last," said David Sell, with Evergreen Helicopter. "It's not going down. It's going up. As long as the price of gold stays high there will be exploration in Alaska."

After 10 years of steady growth, gold prices topped $1,000 in February 2009 and had climbed to $1,100 by mid-November 2009.

Executive director of the Alaska Miners Association, Steve Borell said 2010 looks better than 2009, but mining exploration isn't likely to rebound to recent record-breaking levels.

The mining industry saw historic high spending in 2007--$329.1 million --and 2008--$328.6 million, according to the Alaska Division of Geological and Geophysical Surveys. Though 2009 spending was down significantly from those record levels, at $125 million it was still the fourth highest year on record.

On the production side, gold mining reached its second highest production year since 1916. Two mines--Fort Knox and Pogo Gold Mine--produced 84 percent of Alaska's total 800,752 ounces of gold in 2008. That's nearly an 11 percent increase from 2007.

Total gold production in Alaska--and the mining support services industry that supports it--will likely get a bump in 2010, after Kensington, the state's third large gold mine, begins production late in the year.

Alaska's gold production already equals about 10 percent of the nation's total output.

Forecasts for base metal projects are less robust, according to Curt Freeman, a Fairbanks-based geological consultant and owner of Avalon Development.

"If you have a base metal project, other than a large copper project like Pebble, the markets are dead as a doornail," he said. "Demand has slowed, supplies are still up and although lead, zinc, copper, nickel, etc., are all up from their lows in the fall of last year, they are still well below the highs we saw in 2007 and early 2008."

Freeman said that means even high-quality projects such as Niblack, Palmer and 40-Mile are flying holding patterns, waiting for prices to recuperate.

LAST FRONTIER DEPENDS ON MINING

Much of the work that keeps Last Frontier Air Ventures, at Mile 81 of the Glenn Highway, flying is in support of mineral exploration, according to company president and director of operations Dave King.

Though the company's...