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June 12, 2014 --- Vol. 08, No. 24June 2014

Alaska News Nuggets

COAL – Usibelli Coal Mine, Inc. June 10 reported the Alaska Department of Environmental Conservation has issued it a minor air quality permit required to operate a crusher and a coal preparation plant, or wash plant, at the Wishbone Hill coal mine. The crusher reduces the size of the coal coming out of the mine to pieces less than two inches, and the wash plant washes dirt and other impurities off of the coal so that the coal is ready to be used in power generators. “Usibelli has been working with the State of Alaska on this permit for about five years,” said Rob Brown, Wishbone Hill project manager and Usibelli’s vice president for business development. “Many years of air and meteorological data have been collected so that we could demonstrate our ability to meet National Ambient Air Quality Standards at the Wishbone Hill mine permit boundary.” Usibelli said the purpose of the air quality permit is to prevent harmful levels of dust or emissions from leaving the area. “Alaska has some of the most stringent air quality standards in the world,” said Lorali Simon, Usibelli’s vice president of external affairs. “It has taken over five years to secure this minor permit, however, the rigorous requirements for a permit illustrate Alaska’s commitment to protecting public health and the environment.” Mining in the Matanuska Coal Field dates back to the early 1900s. Exploration on the Wishbone Hill project began in the 1980s and the mine was completely permitted in 1991, however, a series of delays such as litigation over Mental Health Trust royalties, as well as a softening in the global coal market have prevented production at the mine. Usibelli acquired the leases and permits to the Wishbone Hill project in 1997 and launched a feasibility study in 2010, at a time when market conditions were strong. Though coal market has softened, Usibelli says its interest in further developing the Wishbone Hill Mine has not wavered. “Usibelli is committed to continuing the process to further develop the Wishbone Hill Mine,” Brown said. “The Wishbone Hill project will bring between 75 and 100 family-wage jobs to the Sutton area, and the State and Mat-Su Borough will benefit from increased economic development,” he said. Usibelli said continues to work towards renewal of the mining permit issued by the Alaska Department of Natural Resources. Once that permit has been renewed, the company will take a fresh look at market conditions to determine the timing for further development the Wishbone Hill Mine.

LAND AGREEMENT – Novagold Resources Inc. June 9 reported that Donlin Gold LLC and The Kuskokwim Corporation have reached an updated long-term surface use agreement for the Donlin Gold project in Alaska – one of the world’s largest undeveloped gold deposits. Conclusion of this agreement represents an important milestone in the advancement of this major project towards development and ultimately production. “This agreement represents a strong commitment by the project’s key stakeholders to continue advancing Donlin Gold in a responsible and sustainable manner for the benefit of the region and its shareholders,” said Donlin Gold General Manager Stan Foo. “Our strong and time-honored relationship with TKC and Calista Corporation, who, respectively own the surface and mineral rights to the lands encompassing the Donlin Gold project, forms a solid foundation for its successful development.” The agreement has been extended to coincide with the projected Donlin Gold mine life with provisions for a further extension, should production continue beyond that. The agreement also coincides with the length of the Calista’s exploration and mining lease. The agreement: provides direct compensation to TKC through payments for project milestones, annual surface use and mine operation. Includes a coordinated and consultative approach between Donlin Gold and The Kuskokwim Corporation regarding annual project planning, reclamation as well as preparation of a subsistence harvest plan for affected surface lands; gives preference to TKC for contracts, hiring and training TKC shareholders, as well as funding scholarships and working with federal, state and local entities to help create and fund a training facility in the region; and commits to an exclusive contract with TKC for the construction and operations of an upriver port site. “Our families have lived off this land for generations and we want to make sure it is developed both responsibly and in a way that benefits the shareholders of The Kuskokwim Corporation,” said TKC President and CEO Maver Carey. “Since 1995, Donlin Gold has worked constructively in our region, and I know our partnership will benefit our shareholders for many generations. Today’s agreement sets the basis for a long and productive relationship that with construction of the mine will provide jobs and financial value to the shareholders in our 10 villages.” Novagold President and CEO Greg Lang said, “We truly appreciate our partnership with the Alaska Native Corporations and look forward to a prosperous future.”

FINANCE – Goldrich Mining Co. June 9 reported that it has closed the first tranche of a private placement, resulting in gross proceeds of roughly US$781,000. Pursuant to the financing, Goldrich sold 14,208,637 units at a price of US5.5 cents per unit. Each unit consists of one share of the company’s common stock, and one half of a Series N warrant. Each full warrant is exercisable to purchase an additional Goldrich share at 11 cents, for five years following the date of issuance. The warrants are subject to a call option by Goldrich in which the company can provide notice of early expiration if certain share price conditions are met. Of the total issuance, Goldrich officers and directors bought 487,272 units, contributing US$26,800 of the total proceeds of the private placement. Such units were purchased on the same terms and conditions as the purchase of units by other investors in the private placement. The aggregate proceeds of the financing will be used primarily for ongoing development of Goldrich’s Chandalar property in Alaska and general operating expenses.

INFRASTRUCTURE – Bering Straits Native Corporation June 6 reported the completion of an economic feasibility analysis of Port Clarence, a natural deep-water port located on the Bering Strait near the 50-mile-wide (80 kilometers) passage between Russia and Alaska. The analysis was completed by economic and engineering consultants familiar with Arctic maritime needs, and determined that development of Port Clarence would be economically feasible if development occurred in conjunction with development of Alaska’s Outer Continental Shelf. The study determined that port development can be viably achieved with private investment and that Port Clarence would be an ideal staging area for oil and gas exploration in the Chukchi and Beaufort Seas. Bering Straits Native Corporation determined that a basic deep-water port and man-camp at Port Clarence could be operational within four years of oil and gas industry decision to pursue resource development of Alaska’s Outer Continental Shelf. Development of Port Clarence would occur with minimal dredging, minor marine disturbance, little impact to subsistence harvests, and no required maintenance dredging. BSNC said it has been approached by numerous private entities interested in partnering in financing development of Port Clarence. “The growing potential of the Arctic is a high priority for us,” said BSNC President and CEO Gail Schubert. “I believe that in addition to supporting oil and gas industry needs, Port Clarence is going to positively contribute to sustainable economic growth in the BSNC region.” The world-class Graphite Creek deposit, situated about 24 miles (39 kilometers) east of Port Clarence., is a project in the BSNC region that would benefit from a deep-water port. Following two seasons of drilling, Graphite One Resources has outlined an inferred resource of 186.9 million metric tons averaging 5.5 percent graphitic carbon, for a total of 10.35 million metric tons of graphite at the project. BSNC said its management is pursuing title to Point Spencer, commonly called Port Clarence. BSNC selected land on Point Spencer in 1976 for conveyance under the Alaska Native Claims Settlement Act should the lands become available. BSNC said Point Spencer was traditionally used by local residents and served as the venue for an annually occurring indigenous, inter-continental, trade fair.


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