Partners of choice: native corporations attract mining companies to their lands for a win-win situation.

• Author: Liles, Patricia
• Position: Alaska Native: BUSINESS NEWS

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Rusty-colored, crumbly rocks and dirt sporadically mixed with small chunks of white quartz freshly uncovered immediately caught the attention, and the geological interest, of Jeff Pontius, a long-time gold prospector currently working on Native land in Interior Alaska.

A small John Deere bulldozer, leased from the nearby community of Tanana, had just scraped a small area on the hillside free of vegetation. Soil sampling conducted the prior year, and by past prospectors, had identified a soil anomaly with gold mineralization and associated pathfinder elements.

But in preparatory dirt work to create a level drilling pad, the dozer uncovered what Pontius believes is a layer of gold mineralization in the buried rock.

"This is it-this is the zone we want," Pontius said, after inspecting some of the broken-up rocks with his fold-up magnifying loupe hanging on a cord from his neck, a typical "necklace" geologists wear during the field season.

Deciding to move the drill pad and planned core hole a few feet further up the slope, Pontius discussed the changes with the dozer operator. Okay with the extra work, dozer operator Dean Siebold joked with the geologist. "If I wanted to mess with you guys, I would have covered that white stuff back up," he said, laughing.

Making on-the-spot calls based on geologic information is nothing new to Pontius, who has nearly 30 years experience looking for gold deposits for mid-tier and major mining companies, most recently AngloGold Ashanti.

What is new for Pontius, for his new company Talon Gold Alaska Inc., and for a growing number of other mineral exploration and mining companies currently working in Alaska, are prospecting opportunities on lands owned by Alaska Natives.

Denver-based Talon Gold, a wholly owned subsidiary of publicly traded International Tower Hill Mines Ltd., announced in September 2006 that it optioned the West Tanana gold exploration property from Doyon Ltd., the Interior Alaska Native regional corporation. The parties signed a two-stage exploration option/mining lease agreement covering some 60,000 acres of Doyon land located about 25 miles west of Tanana, and about 10 miles north of the Yukon River.

The West Tanana property includes overgrown historical placer mine workings on Grant Creek, the camp base for the exploration crew of nine working on the property this summer. The five-year exploration agreement, which calls for certain annual payments to Doyon, as well as specified minimum financial investment in the exploration property by International Tower while setting aside a royalty for Doyon should the property ever produce gold, resembles a standard mining company deal.

"There are some special provisions that are unique to working with a Native group, but they are not onerous to us," said Pontius, who serves as president and CEO of International Tower and Talon Gold. "Otherwise, it's a general business transaction like we would do with any company."

Those provisions include a preference in the choice of contractors, a shareholder hire provision and a contribution to Doyon's natural resources scholarship fund, typically about $10,000 a year.

BENEFITS REACH BEYOND COMPANIES

Through a competitive process, that endowment provides a full-ride scholarship to a college junior-also a Doyon shareholder-who is working toward a degree in the oil and gas industry, or mining, or some other type of natural resource field, according to Norm Phillips, resource manager at Doyon.

"It's very important to us for companies to make...