Alaska Gold. A real story (IV)
By Eric Prendeville. Elemetal – Anchorage , Alaska
Alaska is home to six large production hard rock mines, four of which produce gold. Alaska’s largest producing gold mine is aptly named Fort Knox, an open pit mine located 25 highway miles northeast of Fairbanks. The operation poured its six millionth ounce in 2013, and a total of 428,822 ounces for the year. In 2014, the mine produced 387,285 ounces, and employed 650 people. It was discovered in 1984 and has been producing since 1996.
Pogo is another important gold mine, which ranked as the number one gold producer in the state from 2008 through 2012. The underground mine is located about 85 miles southeast of Fairbanks. The deposit was discovered in 1994 and the mine has been producing since 2006. In 2014 the mine produced 342,147 ounces of gold and employed 320 people.
In the Southeast region of the state, Kensington gold mine produced over 100,000 ounces in 2014 and is planning to expand operations. A neighboring mine in the region, Greens Creek Mine is among the top 10 silver producers in the world. Other minerals extracted include zinc, gold and lead.
The Alaska Mining industry employs Alaska residents in more than 50 Alaska communities. In 2014, there were 4,400 direct mining jobs in Alaska, and that number rises to 8,700 jobs when indirect jobs attributed to the industry are also included. This total number of jobs provided a $620 million payroll for the year and some of the jobs are among the highest paying in the state, at $100,000, over twice the state average.
According to DNR, estimated revenues in 2014 to the State of Alaska and municipalities from mineral industry-specific fees, rent, sales, royalties and taxes amounted to $102.2 million, down from $142.5 million during the previous year. Alaska Native corporations also share in the wealth of mining, receiving $144 million in payments.
In light of recently depressed metal prices, exploration and development spending has declined worldwide, and Alaska has followed suit. Mineral exploration expenditures in 2013 were $175.5 million, which dropped significantly to $96.2 million in 2014, a ten year low for the state. The effect of decreased prices on development spending seems delayed however. In 2012, $342.4 million was spent on development, which increased to $358.8 million in 2013. It wasn’t until 2014 that spending decreased to $281.7 million.
There are at least nine ongoing exploration projects in the advanced exploration stage. Two projects specifically concentrated on gold mining are Donlin Gold, and Livengood. Donlin Gold was discovered in Southwest Alaska in 1988, and has been explored since 1995. The project began the permitting process in 2012. The mine could be responsible for doubling the state’s annual gold production. Livengood is a project in the interior of the state, near Fort Knox gold mine. Placer mining began at the site in 1914, and lode exploration began in 2003. There has been approximately $215 million invested as of 2014. Several other exploration projects looking to develop gold deposits include Niblack, Palmer Project and Upper Kobuk Mineral Projects. In addition to these, two projects seek to produce coal: Cheitna and Wishbone Hill.
To the southwestern part of Alaska there is a very significant exploration project known as the Pebble Project, exploring the largest known undeveloped deposit of both copper and gold in the world. Indicated resources are 57 billion pounds of copper, 70 million ounces of gold, 3.4 billion pounds of molybdenum and 344 million ounces of silver. At currently depressed metal prices, this represents a value of $230 billion in minerals. As of the end of 2014, $730 million has been invested in the project. The fate of the project is uncertain in light of ongoing controversy over the potential mine’s environmental impact.
Mining provides the raw materials for our industry, as well as the raw materials for many everyday things. Whether you’re a jeweler, minter, bullion dealer or scrap dealer, the gold you handle on a regular basis is likely to be a product of, at least in part, of gold mined in Alaska. It’s important to recognize the suppliers of our raw materials, the gold miners in Alaska and elsewhere, who allow the industry as a whole to continue growing and moving forward. The importance of the mining industry is demonstrated on bumper stickers in Alaska, “if it’s not grown, it’s mined”.