Claim staking rush surrounds Pebble

Three exploration companies independently and secretively launched major land staking efforts in December, laying claim to more than 300 square miles of state land surrounding the Pebble gold-copper-molybdenum deposit in southwest Alaska.

Characteristics of such large, multiple-porphyry deposits and past exploration success at Pebble sparked the substantial interest by prospectors who hope to find similar mineralization.

"It's the largest porphyry alteration in the world and a variety of the characteristics of such alteration zones triggered a pattern recognition," said James Briscoe, president of the recently formed Liberty Star Gold Corp., which staked the largest block in the area. "We worked in exceeding secrecy for a number of months with no idea what anyone else was doing."

Bill Ellis, part owner of Alaska Earth Sciences, an Anchorage-based geological consulting firm that has worked in southwest Alaska for several years, also staked a large position in the Iliamna area in December, south and southwest of the Pebble land block.

"These typically occur in clusters or belts," he said. "From the geology, we felt the belt continues on to the south."

The third group staking land in December, Anchorage-based On-Line Exploration, represented the existing landowner and current operator of the Pebble deposit, Northern Dynasty Minerals Inc.

Bruce Jenkins, director of corporate affairs for Northern Dynasty, said the company's staking was completed to expand the existing 74,000-acre land block and to "preclude competition … so we do not have a nuisance factor (during development)."

Northern Dynasty's recent announcement upgrading the size and grade of the Pebble deposit "created a flurry of activity and interest," Jenkins said. "A lot of people are coming out of the woodwork, rushing to stake anything adjacent to us."

The claim staking work likely isn't over, according to Curt Freeman, owner of Avalon Development, which staked the 237-square mile block for Liberty Star.

"There is a number of places where you can stake up against the Pebble block," he said. "The staking isn't done out there."

Surprise at Iliamna

In December all three companies headed to the remote area about 15 miles north of the village of Iliamna, on Lake Iliamna west of Cook Inlet in southwest Alaska.

"As it turns out, we staked a few days after the Alaska Earth Science guys and abutted but did not overstake their ground," Freeman said. "We finished our block the day the On-Line guys arrived to start staking. By gentlemen's agreement, we showed the On-Line guys our finished claim block to make sure they knew exactly where we had staked."

As a result of work completed in that three-week period, claim positions surrounding Pebble jumped by 200,000 acres or more than 300 square miles, Freeman said.

Increases in copper and gold market prices are also driving the effort, he said. "Copper-gold 'porphyry' style deposits are company-makers because they can be huge, like Pebble."

In addition, the value of the U.S. dollar has declined, bringing Canadian investment back to Alaska, Ellis said.

"Late last summer, we began seeing an increase in the level of activity," he said. "I think it will explode this year."

Negotiating joint venture

Ellis said Alaska Earth Sciences is negotiating a land deal for his company's 112 claims in the Pebble area, which covers about 28 square miles. The joint venture should be finalized and made public in about a month.

"This is a new foray for us, as historically we do not acquire property in our own name," Ellis said. "I had an eye on one specific area for several years … the timing was right and we decided to go ahead and acquire it in early December."

He plans an aggressive exploration program this year, with geophysical and geochemical work being discussed. "The next logical step is geological mapping. There's a lot of cover down there."

Startup brings porphyry experience

Liberty Star, a new company formed from a merger of Titanium Intelligence and Alaska Star Minerals, now holds 981 state mining claims in the Iliamna region. The staking was the largest one-time acquisition of state claims in Alaska's mining history, Briscoe said.

"We think this will be the biggest thing in Alaska that has happened in many years," Briscoe said. "If we are successful, we will be adding Pebble-like deposits, because we think there will be multiples of this."

Liberty Star has already started a large, detailed air magnetic geophysical program for its land holding, located in a C-shape north to northwest of Pebble. Briscoe estimates the company will spend more than $150,000 to complete 18,000 linear kilometers of air survey, on a one-sixth mile grid network.

The geophysical survey work will help identify potential drill targets, which Liberty Star plans to begin work on during the summer season.

"This is a very exciting project, and if we are correct in what we think we are dealing with, its size is pretty astounding," Briscoe said.

In addition, Iliamna's proximity to Cook Inlet and the state's planning work on a connecting road offers the potential for affordable ocean-going shipping to Japan and China, current processors of such mineralized concentrates. "This is really the closest porphyry system to those markets," Briscoe said.