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Vol. 12, No. 30 Week of July 29, 2007
Providing coverage of Alaska and Northwest Canada's mineral industry

MINING NEWS: Drilling deep, costs high at Pebble

Northern Dynasty aims to triple the amount of drilling done last year using eight rigs operating 24/7, supported by helicopters

Sarah Hurst

For Mining News

At the site of Alaska’s most controversial mining project, Pebble, near-tranquility reigns. Out on the mossy tundra, surrounded by deep blue lakes and streams, mountains and sky, the drone from the drill rigs and the buzzing of helicopters are the only disturbances. Away from the deposit itself, field crews conduct environmental studies in spots that would be ideal for picnicking, if they weren’t so remote.

Back in the village of Iliamna, where Vancouver-based Northern Dynasty has its project headquarters, core shack and employee accommodation, local people greet company vehicles with a friendly wave. Many of them work for the project, like Kimberly Rychnovsky from Newhalen, who has spent the past two summers as a core-cutter during her breaks from studying accounting at a community college in Auburn, Wash.

The pace of exploration this year is frenetic, but employees don’t appear over-stressed during a day-long press tour in mid-July. As for the political battlefield, it’s elsewhere — being waged in advertisements from both sides running continuously in all the state’s leading media outlets, in the Alaska Legislature and local assemblies, and possibly within the walls of a large private fishing lodge that stands by itself on a spit near Nondalton, the lodge belonging to Pebble’s biggest foe, Bob Gillam.

New drills reach to 6,500 feet

Much of the real action, for Northern Dynasty, is taking place deep beneath the surface of the earth — sometimes up to 6,500 feet below it, which is the depth that the company’s newest and biggest drill rigs can reach. Those three new rigs were designed and built specifically for the Pebble project by British Columbia-based Quest Drilling, and they were scheduled to be delivered in April, but due to a parts shortage, they only arrived in early July.

The late arrival of the largest rigs has set back Northern Dynasty’s ambitious drill program: The company intended to complete 243,000 feet of drilling in 2007 (compared to 77,000 feet in 2006), but it now expects to get to about 180,000 feet by the end of this year and to finish the program in the first quarter of 2008. Last year’s program ended Dec. 10 and this year’s began Feb. 3, about two months earlier than in previous years. Eight rigs are now in place at Pebble, including three medium-sized LF90s and one small LF70, all supplied by Quest, and a CP50 supplied by Boart Longyear (a direct drive drill rather than a hydraulic drill).

All of the drill rigs are located on the Pebble East deposit, the area with the higher grade that could have the potential to be developed into an underground mine. “We didn’t accomplish as much drilling as we wanted to in 2006 due to the challenges of deep drilling,” Sean Magee, Northern Dynasty’s vice president for public affairs, said on the tour. The holes at Pebble East are quite widely spaced and the distance between them needs to be reduced to 600 feet to move resources from the inferred category to measured and indicated.

2007 budget $130 million

In 2007 Northern Dynasty expects to spend $12 million on engineering, $53 million on drilling and $30 million on environmental and socioeconomic work at Pebble, for a total of $95 million. By comparison, in 2002-2006 the company spent $25 million on engineering, $50 million on drilling and $55 million on environmental and socioeconomic work, for a total of $130 million. The discovery of Pebble East, which is yet to be fully delineated, has changed the whole nature of the project and pushed the date for submitting permit applications further into the future.

Costs are especially high because all personnel and equipment, including drill rigs, are transported the 19 miles between Iliamna and the project site by helicopter. This minimizes Pebble’s footprint on the tundra and keeps seven helicopters from two companies, Prism and Pollux, running for eight hours each per day, the maximum that the pilots can fly. The largest, a Bell 205, can lift a load of up to 3,300 pounds. Northern Dynasty leases lodges in Iliamna for its employees and contractors to live in. By doing so it contributes directly to the economy of the village.

Of the $53 million being spent on drilling this years, $8.5 million of that is for the helicopters. Due to having to dismantle the drill rigs for transportation, there is an interval of two to five days between finishing one drill hole and starting a new one. If the rigs were transported over land, they could be moved in a couple of hours, according to the acting site manager for Pebble, Bob Cluff.

Patios built around rigs

A wooden patio is built around the drill rig so that workers don’t create a path during the month they spend at each drill hole. The holes and the area around them are then reclaimed so that it’s almost impossible to tell they were there, apart from the presence of a stake to indicate the hole’s location, or sometimes a steel pipe for water monitoring instruments. The holes are filled with hole abandonment grout from top to bottom, and if there is artesian flow at any of the holes, that is plugged, too.

Each drill rig uses about 16 gallons of water per minute when it’s operating. The water is pumped out of small ponds known as kettles, or in winter from streams. A fish screen, actually a box that’s about two feet wide by 1.5 feet high, prevents fish from being sucked out with the water. Jim Buell, a project consultant responsible for aquatic issues, helped to design the fish screens. “They go so far beyond fish protection criteria, it ain’t funny,” he said. In winter the water must be pumped 24 hours a day, otherwise the lines would freeze.

The drill rigs also require about 200 gallons of diesel fuel per day at a cost of $6 per gallon. There is a fuel storage facility at Big Wiggly Lake that contains enough fuel for the rigs to operate for four or five days. Garbage from the rigs goes into enclosed dumpsters, brightly painted and even given nicknames like “Red Baron” and “White Trash,” and items such as drill rods, plastics and aluminum are sent for recycling. Burnable materials are taken to the Iliamna landfill for incineration.

Environmental studies encompass three watersheds

The scope of the environmental studies being undertaken at Pebble is vast. The research program encompasses the three watersheds of Upper Talarik Creek and the north and south forks of the Koktuli River, an area of approximately 500 square miles. “What we have right now is really a science project and we want to put all the facts on the table,” Magee said. “We will only release environmental data with analysis as completed results. We won’t release raw data — we did that in the past and it was used against us in an irresponsible way.”

Most of the sport fishing in the vicinity of Pebble takes place in Lower Talarik Creek, which is 12 miles from Upper Talarik Creek. About 0.5 percent of the sockeye salmon of the Bristol Bay Area comes from the three watersheds that could be impacted by the project. Northern Dynasty doesn’t want to play down the significance of this number of fish, but it does want to put it into perspective. “Every single fish in that half a percentage needs to be protected, and that’s the bottom line,” Buell said.

Out of the 67 permits that the project would require, 22 have a specific fish protection aspect to them. Northern Dynasty already has fish habitat permits and temporary water use permits for its exploration program. “Those people who say this project will affect the entirety of Bristol Bay, that’s not a credible statement at all,” Magee said. “There are clearly opportunities to site our project in a way that won’t impact spawning of salmon,” he added. The company points to the environmental success story of the Gibraltar copper-molybdenum mine in British Columbia, operated by its sister company in the Hunter Dickinson Group, Taseko Mines.



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