Mining News: Producing mines in Alaska

NovaGold Resources Inc.’s Rock Creek gold mine began production Sept. 19. Crews began feeding the 6,500-metric-ton-per-day-mill at 25 percent capacity with a ramp-up to full production targeted for year’s end. Once in full production, the operation is expected to turn out 100,000 ounces of gold per year. The main pit at Rock Creek has a resource of 500,000 ounces. The company’s objective is to increase the resource to 1 million ounces over the next year.

The Usibelli Coal Mine is a fourth-generation family-owned business founded in 1943 by Emil Usibelli. The company started off supplying coal to the newly constructed Ladd Army Air Field (now Fort Wainwright). Today, Usibelli transports coal to six power plants in Interior Alaska and ships 500,000 metric tons overseas. The miner has 30 years of reserves at its current production rate of 1.5 million tons of sub-bituminous coal per year and could easily double production if the market demanded.

Teck Resources Ltd.’s Red Dog Mine in Northwest Alaska is the world’s largest zinc mine and accounts for about 80 percent of the zinc and nearly 30 percent of the lead produced in the United States. Teck and partner NANA Regional Native Corp. are currently acquiring permits to begin mining the Aqqaluk deposit, an extension of the main pit that is currently being mined. The Aqqaluk deposit contains 51.6 million tons of reserves with an average zinc content of 16.7 percent along with 4.4 percent lead and enough ore to extend the life of the mine by 20 years.

Kinross Gold Corp.’s Fort Knox gold mine, about 26 miles north of Fairbanks has been in production since 1996 and currently produces about 330,000 ounces of gold per year. The carbon-in-pulp mill at the open-pit mine processes between 33,000 and 45,000 metric tons of ore per day. In February Kinross’ board of directors approved the construction of a heap leach facility and expansion of the open pit mine. These upgrades are expected to extend the life of the project from 2012 to 2018 and double expected life-of-mine production to 2.9 million ounces of gold.

The Pogo Mine, located about 110 miles southeast of Fairbanks, is Alaska’s second largest gold mine. The underground gold mine, which went into production in early 2007, suffered some early setbacks. Teck Resources Ltd., 40 percent owner and operator of Pogo, realized its first profit from the mine in the second-quarter of 2008. Mitsubishi Group companies own the other 60 percent of Pogo. Teck said it is on track to reach a gold production target of 340,000 ounces at Pogo in 2008 and expects operating costs to remain near current levels for the balance of the year.

Greens Creek Mine, located about 16 miles south of Juneau, had a change in ownership this year. Hecla Mining Co., which had previously owned a 29.7 percent stake in the mine, bought out majority partner Rio Tinto and acquired full ownership of the polymetallic mine. During the second-quarter of 2008, Hecla produced about 2.4 million ounces of silver, 15,257 ounces of gold, 16,000 tons of zinc, and 9,000 tons of lead at an average cash cost of $3.43 per ounce of silver, after by-product credits. Hecla said it anticipates producing a total of 9 million ounces of silver in 2008 at an average cost of about $3.25 per ounce, given current metals prices.