Providing coverage of Alaska and Northwest Canada's mineral industry
January 2005

Vol. 10, No. 5 Week of January 30, 2005

MINING NEWS: Canadians set sights on Alaska Peninsula

Deals with two Native corporations give Full Metal Minerals right to explore more than 1 million acres

Sarah Hurst

Mining News Contributing Writer

Full Metal Minerals plans an “aggressive” exploration program in southwest Alaska this summer, having signed a second agreement with a Native corporation, the Vancouver-based company said Jan. 22. The second agreement is with Bristol Bay Native Corp. to explore approximately 565,000 acres of the southwest Alaska Peninsula. It follows an agreement last year with the Aleut Corp. to explore on the Port Moller property in the Aleutian Islands chain.

“By aggressive we mean we’re not just going to sit back, we’ll be doing soil sampling and geological mapping, and we will drill this season if we see the right targets,” Full Metal’s president, Michael Williams, told Mining News. “We thought if we could put the two agreements together it would make a really good land package. We got reasonable terms that allow us to spend money on the ground and if we make money, everyone is compensated down the road.”

In the first year Full Metal must spend at least $150,000 on exploration on the Alaska Peninsula, along with a $5,000 cash payment to BBNC and a donation of $5,000 to the Bristol Bay Education Foundation: in practice a scholarship. After deciding what land it wants to keep, Full Metal will spend $4.4 million over the next seven years.

Lands part of belt that includes Pebble

The BBNC and Aleut Native-owned lands have received only minor exploration, but they are part of a 435-mile belt that includes the huge Pebble deposit, where Full Metal also has claims. Multiple porphyry copper-gold and epithermal gold systems have been identified in the region. The Alaska Peninsula and the Aleutian chain have experienced continuous volcanic activity for at least 36 million years.

Another junior company almost made an agreement with BBNC, but when that fell through, Full Metal signed on the dotted line. Although the company was only established in 2003, its management team has an impressive track-record and they are assisted in their Alaska projects by Alaska Earth Sciences geologist Bill Ellis. Full Metal’s Dave DeWitt and Catherine McLeod-Seltzer helped develop the world-class Voisey’s Bay nickel deposit in Labrador. John Robins, chairman of the board of directors, has been involved in big diamond plays in Canada.

Lands part of Pebble belt

“We’ve negotiated a preliminary agreement with Full Metal Minerals that could ripen into something real if in their efforts they find something attractive, but it’s early days,” BBNC’s chief operating officer, Tom Hawkins, told Mining News. “Our desire is to get the money put into the ground; we don’t expect to get a lot of rent on the front end.”

As the project progresses, residents of villages on the Alaska Peninsula may start to ask questions, Hawkins said. “Pebble with its massive size has made people in the region kind of nervous. It’s an area that supports a fairly impressive fishery and very active recreation and tourism. People would not want to give up those in exchange for a mining development, they like to have their cake and eat it.”

Full Metal had the third-largest exploration program in Alaska last year. Eight out of its 10 projects are in Alaska, including the promising Ganes Creek gold prospect 275 miles northwest of Anchorage. “A lot of the people in our company had worldwide experience and thought Alaska was under-exploited, because it was considered an expensive place to do business,” Williams said. “With the U.S. dollar falling somewhat, it’s mitigated the costs, and the Alaska government is very pro-mining. Strategically, Alaska is very similar to how Nevada was 15 to 20 years ago.”

Whenever possible, Full Metal hires locally. “It makes good business sense,” said Williams. “With a lot of the Native corporations the locals have the experience anyway. The only thing we ask is that they be competitive.” Last summer Full Metal employed 20-25 people in Alaska and this year the company may need 50. Exploration on the Alaska Peninsula will probably begin in May or June.

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