Mining the 49th state: high minerals prices pushing exploration.

• Author: Orr, Vanessa
• Position: SPECIAL SECTION: MINING

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While the Gold Rush originally brought many miners to Alaska, over the years the quest to find what riches lay underneath the state's lands has waned. But with the price of metals increasing every day, more interest is now being paid to unearthing the Last Frontier's natural resources.

"Alaska has a lot to offer; it is effectively unexplored," says Steve Borell, executive director, Alaska Miners Association. "While there has been mining in the state for more than 100 years, compared to anywhere else in the world, very little work has been done here. Nevada is one-fifth the size of Alaska and has 55 major mines.

"Part of the reason for this is because most areas have no road access," he added. "Combine this with the high cost of flying to get to remote locations, and the fact that most sites only allow a six-month exploration season, and it all contributes to making mining here more difficult."

Still, there are a number of companies willing to take the risk. Approximately 17 of the state's 34 largest mining and exploration companies will be drilling in 2011 in the hopes of taking advantage of rising metals prices.

"Metal prices drive exploration," Borell says. "Copper and gold are two primary targets, and right now, copper prices are above $4 per pound, and gold prices are plus or minus $800 per ounce."

"The industry is still riding high on outstanding metal prices, particularly gold prices," said Robert McLeod, vice president of exploration for Full Metal Minerals. "In addition to our already established sites, we're prospecting elsewhere in the state, looking for new projects."

EXPANDING MINES

According to Borell, a number of mines are expanding beyond existing properties. Teck for example, is not only drilling in the pit area of the Red Dog Mine, but also in adjacent ore bodies and on adjacent lands. Fairbanks Gold Mine Inc. is expanding its existing pit laterally and at depth at Fort Knox, and also looking for other potential ore bodies to mine.

"At Hecla Greens Creek Mining Co., they are doing both surface drilling and underground drilling for additional ore," Borell said. "In the past, the company typically found as much ore-grade material as they have mined each year. This year, their objective is to increase the amount of known ore material so they can better plan for the future."

The Greens Creek property, which produces 11 million ounces of gold per year and 60,000 ounces of silver per year, is the largest silver mine in the U.S.

"If the company does no additional exploratory drilling, it is estimated they have approximately 12 years of mining in front of them," Borell said. "With exploratory drilling, that could...