Mining industry poised for further expansion.

• Author: Borell, Steve

The gold price continues to improve and this is providing a new level of optimism. Exploration companies and their investors have renewed confidence in long-term price stability, and the result is that investment dollars have continued their slow return to Alaska. Mines already operating are benefiting from these prices, as are major projects now in final stages of permitting.

The proposed Pogo gold mine, located 40 miles northeast of Delta Junction, is now awaiting its final environment impact statement. Pogo will be an underground mine, and once all approvals are received, construction of the road, camp and facilities is expected to start late this fall. The Kensington gold project also will be an underground mine. Kensington is located 35 miles north of Juneau and is now redoing its previously approved EIS. Acquisition of adjacent lands has resulted in design modifications that will lower capital and operating costs, and a land exchange proposed between Cape Fox and Sealaska corporations and the U.S. Forest Service will improve the project even further.

There are also three advanced stage projects that are very active. Workers at the Nixon Fork Mine, now known as Mystery Creek Mining, located near McGrath, are currently refurbishing the camp and underground workings and will spend this winter drilling underground in preparation for restarting the mine. Developers of the Rock Creek gold project at Nome are working on a feasibility study that will support project financing and development. At the Donlin Creek gold project, located north of Crooked Creek, Placer Dome has become the operator and its focus is evaluation of alternate sources of energy and access, which will lead to completion of a pre-feasibility study for the project.

The improved gold price has allowed some placer miners to begin mining again, but not as many as we had hoped. These small, family mines are especially hurt when prices are low and they are forced to shut down for a period of time.

The terribly low price for zinc, in the range of 36 cents a pound, continues and this has made life very tough for the Red Dog Mine. Red Dog continues to focus on cutting costs and improving metal recovery in the mill. Low zinc price also hurts the Greens...