High-grade zone found at pebble: called 'extraordinary' and 'phenomenal,' this mine has great potential, but with logistics and other difficulties, will it be profitable?

• Author: Liles, Patricia
• Position: Northern Dynasty Mines Inc.

Joni Paule spent last summer and fall handling mineral-rich rocks taken from a mammoth-sized gold-copper-molybdenum deposit near her Lake Iliamna home.

"Sometimes I'd go home with glitter all over my clothes ... the rocks are green to gray. They're gorgeous," said Paule, who earned $15 per hour working up to 50 hours a week from April through October, splitting drill core taken from the Pebble project, located some 15 miles northwest of the community of Iliamna.

"I'd probably come back and do it again. It's good physical work-keeps me busy," she said, in early October. "During fishing season, they let me have time off, so it's been really good."

Her fourth-grade son even got in on the act, Paule said, stopping at the company's core shacks on his way home from school. "He told his friends that he works at the mine ... that he's a geologist," Paule laughed. "It makes it exciting to him."

Paule and more than 70 other Lake Iliamna locals were part of the 450-person work force employed during the 9005 season by Pebble's developer, Vancouver, B.C.-based Northern Dynasty Mines Inc. The summer and fall work season ended on a high note, with public announcements of discovery of a large, high-grade mineralized area called the East Zone, which is more deeply buried than the valuable metals already known and geologically defined.

The announcement should be encouraging to Paule, her fellow core splitters and the hundreds of other exploration, engineering and environmental workers who want to return to work at Pebble this year.

Although final figures for Pebble's 2006 budget were not yet approved in late January, Bruce Jenkins, Northern Dynasty's chief operating officer of environment, socioeconomic, government, community relations and permitting, expects another busy year in the remote region southwest of Anchorage on the Alaska Peninsula.

"Initial plans suggest an estimated $20 million drill program concentrating on the East Zone, including groundwater, geotechnical and waste characterization holes and $10 million to $20 million for engineering and environmental/community relations," he said, in a Jan. 19 e-mail.

That 2006 spending plan would be close to the company's outlay on Pebble in 2005, which tallied $35 million. Since acquiring the exploration property from Teck Cominco in 2002, Northern Dynasty has spent nearly $70 million on Pebble, not counting any projected monies for 2006.

A substantial amount of past spending went toward exploration work...