Alaska offshore gold: will there be a gold sale off Nome in the future?

• Author: Palmer, Irven F. Jr.
• Position: MINING

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With the price of gold inching toward the magic figure of $1,000 a troy ounce, mining companies are on the verge of taking a second look at offshore Alaska gold. And that gold comes with a long history.

Dating back to 1898, Nome has seen placer miners on beaches and inland recover more than a million troy ounces of gold in the years 1898 to 1985.

Most of the recovery came from glaciological and glaciomarine deposits associated with strandlines, such as the present-day beach in Nome or the elevated ancient beaches further inland. Initially, the gold eroded from lode deposits on the Seward Peninsula and then reworked by fluvial, glacial and marine processes.

On July 11, the Associated Press listed the price of gold at $940.90 a troy ounce. And while the price did dip to the mid-$800 dollar mark, the price still flirts with the $1,000 troy ounce threshold.

At one time, the federal governments considered holding gold lease sales offshore of Nome--I am sure they are once again assessing the potential of Alaska's offshore gold.

The federal agency responsible for conducting lease sales in the Outer Continental Shelf (OCS) is the U.S. Department of the Interior's Minerals Management Service (MMS). MMS considers the area offshore of Nome to offer real potential for mineral leasing, exploration and production.

Various sampling and coring programs in the mid-1960s, confirmed the presence of particulate gold offshore and resulted in defining distribution patterns. The highest gold concentration appears to be at places where submerged beach ridges cross areas of glacial drift. Seismic reflection studies across submerged beaches show that the internal structure is similar to that of modern beaches.

However, several early attempts to conduct placer operations offshore failed or met with only limited success, largely due to the small size or inadequate design and operating capabilities.

For instance, beginning in 1985, Western Gold Exploration and Mining Co. LLC (WestGold) conducted mining activities on State mineral leases and verified the existence and viability of gold placer deposits within the State's three-mile zone. More than 100,000 ounces of gold were recovered by the mining vessel, BIMA, during the first full three years of production. In September 1990, WestGold announced that the BIMA would not operate during the 1991 mining season because of financial difficulties, as well as needed repairs to the dredges. In November of...