Alaska minerals open at depth and in all directions.

• Author: Borell, Steve
• Position: Industry Overview

The increase in gold price has been a welcome change with the result that' some investment dollars have begun returning to exploration. It is clear, however, that investors are very cautious about where they place their funds. The increased price also has encouraged major projects in permitting. Two Alaska projects, Kensington and Pogo, are now in the Environment Imp act Statement and permitting phase. Kensington, an underground gold project 35 miles north of Juneau, had completed its EIS and permitting, but low gold price and land changes resulted in a re-design to lower capital and operating costs. Pogo, an underground gold project near Delta Junction, is also in the EIS and permitting stage. If metal prices hold and permits are completed in a reasonable time frame, both projects could be under construction by mid-2003.

Although low minerals prices during the past couple years have forced many placer mines to close, some operated again in 2002. These small family mines are especially hurt when they cannot o perate. They are small businesses that do not have fund reserves and must have an annual cash flow to feed their families, pay their loans and maintain their claims.

Low prices for zinc and silver have resulted in tough times for the Greens Creek Mine, and especially for the Red Dog Mine. Greens Creek has been able to make changes in its mining and backfill methods, and to the mill, that have resulted in lower operating costs. The mine continues to find new reserves, thereby ensuring the continued life of the mine for an additional 10 years and beyond. At Red Dog, mill upgrades have been, completed and the mine is operating more efficiently than ever before. Yet with the price of zinc now in the very low $0.33/lb price range, the mine project is losing several million dollars in 2002.

The other major mines in Alaska continue to operate. Fort Knox and True North, just outside Fairbanks, continue to set new production records and in 2001 together they produced 411,000 ounces of gold. Illinois Creek, located southwest of Galena, continues to produce as the mine approaches final reclamation. During 2002, Usibelli Coal at Healy will complete mining at its Poker Flats Mine and move all mining to the new Two-Bull Ridge Mine. Reclamation at Poker Flats will continue for more than a year. Usibelli also has completed the final shipments of coal to Korea for the immediate foreseeable future.

In exploration, the search continues for gold, silver...