Alaska 2005: mining in review: frenetic, wild, intense, frantic, hectic, feverish and exhausting. These are but a few ok the legally printable words used to describe the activity ok Alaska's mining industry in 2005.

• Author: Freeman, Curtis J.
• Position: 2005 Mining Special Section

The mineral industry for the state of Alaska is coming off a record year in 2004, and 2005 is bucking hard to surpass the 2004 results. Preliminary state estimates pegged 2004 exploration spending at $63.7 million, its highest level since 1981. Development expenditures jumped to $105.6 million, thanks largely to initiation of construction at the Pogo mine. Production value increased to a record $1.2 billion in 2004, mainly due to an increase in metals prices. Total mineral value in 2004 was $1.3 billion, another record high for Alaska. So how does 2005 compare so far with what was a pretty good year last year? Frenetic, wild, intense, frantic, hectic, feverish and exhausting. These are but a few of the legally printable words used to describe the activity of Alaska's mining industry in 2005. After the period 1999 through 2003 where words like somnolence, sleepy, dull, slow, silent and dead were used to describe the industry, the change from all-stop to flank speed has left the mining and mining support industries gasping for breath as it struggles to supply the manpower and equipment that companies and individuals have been demanding from one end of the state to the other. A strong increase in metals prices and worldwide industrial demand will answer the "why is that?" question being asked The basic reason for the metals price surge and the concomitant rise in Alaska's mining industry is a strong and growing demand for raw materials, particularly from China, India and several other rapidly expanding economies in Asia, Africa and South America. A quick look follows at how the global supply and demand dynamics has affected Alaska's mining industry this year.

WESTERN ALASKA

Teck--Cominco's Red Dog mine saw continued strong operating profits in the second half of 2005 as a result of strong zinc and lead prices, which averaged $0.59 and $0.45 per pound, respectively. Operating profit was $52 million versus an operating profit of $48 million in the same period in 2004. For the first half of 2005, the mine generated 270.8 tonnes of zinc and 44.4 tonnes of lead in concentrate versus 269.2 and 52.1 tonnes of zinc and lead, respectively, in the second half of 2004. These 2005 results follow hot on the heels of a stellar 2004 performance, which saw the mine produce 554,200 tonnes of zinc and 117,000 tonnes of lead in concentrate while posting $207 million operating profit.

NovaGold Resources and partner Placer Dome announced initial drilling results from its Donlin Creek project. The 2005 program included a 27,000 meter (88,000 foot) drill program with 84 infill, geotechnical and condemnation core holes and 25 condemnation-geotechnical reverse circulation holes. Detailed engineering, environmental and design studies continued. Highlights included hole DC05-1013, which intersected five mineralized intervals totaling 160.6 meters grading 6.24 gpt (grams per metric ton) gold; DC05-1061, which intersected 12 mineralized intervals totaling 226.9 meters grading 4.50 gpt gold; and DC05-1062, which intersected six mineralized intervals totaling 134.3 meters grading 5.33 gpt gold. Highlighting the open-ended nature of the mineralization at the ACMA portion of the deposit were holes DC05-1061, which bottomed in 54.1 meters grading 5.12 g-pt gold; and hole DC05-1062, which bottomed in 77.3 meters grading 5.24 gpt gold.

NovaGold also announced the final feasibility study has been initiated at the Rock Creek project. The company is completing additional in-fill drilling and metallurgical test work as part of the final feasibility study. The budget of $4 million is planned for the development work in 2005 with the objective of the program to advance Rock Creek to a stage of being fully permitted and ready to construct. An additional $1.75 million drilling program is planned for the Big Hurrah project, located 45 miles from Rock Creek.

Northern Dynasty updated resource calculations for its Pebble copper-gold-molybdenum deposit. The new resources include measured and indicated resources of 3.026 billion tonnes grading 0.28 percent copper, 0.32 grams gold per tonne and 0.015 percent molybdenum equivalent to 31.3 million ounces of gold, 18.8 billion pounds of copper and 993 million pounds of molybdenum. An additional inferred resource includes 1.130 billion tonnes grading 0.24 percent copper, 0.30 grams gold per tonne and 0.014 percent molybdenum equivalent to 10.8 million ounces of gold, 5.8 billion pounds of copper and 361 million pounds of molybdenum using a 0.30 percent copper-equivalent cut-off grade. All-in-all that's 42.1 million ounces of gold and 24.6 billion pounds of copper. Higher-grade resources have been increased substantially to a measured and indicated resource of 569 million tonnes grading 0.50 grams gold per tonne, 0.46 percent copper, and 0.021 percent molybdenum, or 0.88 percent copper-equivalent. The 2005 exploration program is budgeted at $36 million and will include delineation drilling of the East Zone discovery located on the eastern flank of the deposit where substantial higher-grade gold-coppermolybdenum mineralization was discovered in 2004. Mineralized intervals at East zone occur beneath post-mineral Tertiary volcanics at depths exceeding 2,300 feet below surface. Highlights include hole 4292, which returned 163.7 meters grading 0.86 gpt gold, 0.61 percent copper and 0.020 percent molybdenum; hole 4300, which returned 132.1 meters grading 0.98 gpt gold, 0.66 percent copper and 0.017 percent molybdenum; and...