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Vol. 15, No. 17 Week of April 25, 2010
Providing coverage of Alaska and Northwest Canada's mineral industry

Mining News: Road to Nome tops commission wish list

Infrastructure could enhance development of Alaska’s minerals while benefiting rural communities; lawmakers fund more studies

Shane Lasley

Mining News

The expansion of North America’s infrastructure ended about 500 miles short of reaching the westernmost shores of the United States, leaving more than 350,000 square miles of Alaska without surface transportation or affordable energy. A vast amount of mineral wealth is locked up in this Texas-sized expanse of western Alaska.

In its 2010 report, the Alaska Minerals Commission informed state lawmakers that, “Mining is one of few Alaska industries with near-term growth potential. Unfortunately, realizing this potential is currently limited by inadequate energy and transportation infrastructure.”

The commission, which was created by the Alaska Legislature in 1986 to make recommendations to lawmakers on ways to mitigate constraints on the development of minerals in the state, listed building a “road to Nome” and providing affordable power to rural Alaska as its top priorities in 2010.

In addition to westward expansion of transportation and energy systems, proposed improvements to Alaska’s existing infrastructure also are expected to lower the costs of mining in the state.

During the final days of the regular session Alaska legislators added US$58 million the state’s 2010 capital budget for infrastructure spending that could support mine development.

Road to Nome

The long-envisioned “road to Nome” has gained renewed traction in the form of the state-funded Western Alaska Access Planning Study, which investigates the costs and economic benefits of linking the Far West mining town to Alaska’s contiguous road system about 500 miles, or 800 kilometers, to the east.

Dowl HKM, an Anchorage, Alaska, engineering firm contracted to do the study, evaluated four alternative routes to Nome. The engineers considered the benefits to mining and communities in western Alaska in their recommendations.

Of the alternatives considered, the engineering firm determined that the Yukon River Corridor has the best balance of resource and community development benefits with the least adverse impact to the environment as well as land ownership and management.

The 500-mile road, which would generally parallel the Yukon River for most of its length, is estimated to cost about US$2.5 billion to build.

Benefits for mining were among the major considerations of the study. A road would support the exploration, development and operations of mining projects by providing a less expensive method of shipping supplies and fuel to the mines along with transporting mining concentrates out of the mines, according to the study.

The Tanana Chiefs Conference, a unified group of 42 Interior Alaska Native communities, has endorsed the Yukon route. The alliance’s board of directors cites the current high transportation and fuel costs as reasons it stands behind building the road.

“The transportation costs make everything more expensive around the community. A road system would alleviate that somewhat,” board President Jerry Isaac said.

Six communities belonging to the Tanana Chiefs Conference (Tanana, Ruby, Galena and Koyukuk) would share in the expected annual savings of US$19.1 million per year in fuel, freight and mail transport costs if road transportation is used. Other communities near the road also would benefit, but to a lesser degree.

In addition to serving several villages, the study said the Yukon Route also would provide connections to Donlin Creek gold mine to the south and the Ambler Mining District to the north.

The Alaska House of Representatives Finance Committee April 16 added US$1 million to the state capital budget to fund preliminary engineering of the road.

The northern route

Many in Alaska’s mining industry prefer the runner-up alternative, known as the northern route. This corridor would take off from the Dalton Highway north of the Yukon River and run southwest along the southern slopes of the Brooks Range to the road system near Nome. This nearly 700-mile, or 1,100-kilometer, route was specifically chosen to provide access to the Ambler Mining District, a region of the western Brooks Range which hosts several volcanic massive sulfide prospects, including the world-class Arctic deposit.

NovaGold Resources Inc. President and CEO Rick Van Nieuwenhuyse told an audience at the Arctic International Mining Symposium in Fairbanks in March that if the Ambler region had road access, there is no question a mine would be operating at the Arctic deposit.

Arctic, one of several known volcanic massive sulfide deposits in the region, contains an indicated resource of 16.8 million metric tons containing 4.1 percent copper, 6.0 percent zinc, 0.83 grams per metric ton gold 59.6 g/t silver and 0.94 percent lead. The estimate includes an additional inferred resource of 11.9 million metric tons with an average of 3.6 percent copper, 5.0 percent zinc, 0.67 g/t gold, 48.4 g/t silver, and 0.80 percent lead.

The northern route alternative passes about 50 miles, or 80 kilometers, south of the Arctic deposit.

Mackenzie rail

While a road to Nome may still be years down the road, a rail extension to Port Mackenzie is on the fast track to completion.

The Matanuska-Susitna Borough and the Alaska Railroad are working together to build the rail extension, which would connect a deep-water port capable of handling Cape-size ships to Alaska’s main rail.

The spur line is expected to provide an efficient means of transporting bulk commodities like Alaska coal and limestone to world markets. The railroad and the borough say the rail extension also would improve the economics of mining copper, zinc, lead and molybdenum along the railbelt.

The rail line would travel north from the port facility and connect to the existing rail system at a point between Meadow Lakes and north of Willow. Depending on the final route, the extension would be about 30 miles, or 48 kilometers, to 45 miles, or about 73 kilometers, long.

The route will be known when an environmental impact study, due this summer, is completed.

The Alaska State House added US$57 million to the state’s capital budget to continue work on the rail extension. Depending on the route chosen, the rail spur is expected to cost an additional US$170 million to US$240 million to complete.

The borough and railroad are projecting construction to begin this summer and the project’s completion by 2013.

Linking Livengood

Another transportation idea floated to miners is a rail extension from the Dunbar Station (located about 19 miles, or 30 kilometers, north of Nenana) to Livengood. This potential 50-mile extension would provide access to the world-class Globe Creek limestone deposit north of Fairbanks and could lower transportation costs to and from International Tower Hill Ltd.’s multimillion-ounce Livengood gold deposit.

Charles Bohart from the Department of Mining and Geological Engineering told participants in the Arctic International Mining Symposium in Fairbanks that preliminary estimates suggest that rail transportation could reduce shipping-transportation costs for the Livengood project between US$35 million and US$76 million.

The rail also would pass near the 1.6-billion-ton Globe Creek limestone deposit. At a quarry rate of 3,320 tons per day, the deposit could provide limestone, Portland cement and fertilizer to Alaska and the world for more than 100 years.

Bohart also noted the potential for the transport of timber from the Tanana Valley State Forest and sightseeing excursions for tourists as other ways the Alaska Railroad would benefit from laying tracks to Livengood.

Bohart told Mining News that a two-part prefeasibility study, investigating the costs and benefits of the rail extension, is expected to be completed in December.



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