AngloGold 'keen' on Alaska projects

Describing Alaska as "a good place to do business," AngloGold (U.S.A.) Exploration's president of North America said the company's focus is shifting away from projects in Nevada and parts of Canada.

The company increased its landholdings through a sizeable claim staking effort in recent months in the area surrounding the Pogo gold deposit, and is negotiating a land lease in the Livengood area.

Total exploration spending in Alaska is planned for $2 million, which is more than two-thirds of the company's North America green-field spending, according to North America Exploration Manager Jeff Pontius, in a telephone interview with Mining News on April 9.

That will include reconnaissance prospecting, as well as drilling more than 19,000 feet on properties neighboring Pogo and at Livengood. (See sidebar.)

AngloGold is also interested in looking at other prospective gold properties in Alaska, he added. "We'll probably be covering a lot of ground in Alaska," Pontius said. "We think Alaska has got a lot of potential for a lot more discoveries."

That includes looking at gold properties being worked by junior exploration companies, said AngloGold North America President Don Ewigleben.

"In the last year or so, people have come to know that we are working in Alaska," he said. "We like to see all the activity by the junior exploration companies and hope they come visit us with their successes."

Ewigleben's past experience in Alaska, working with Amax Gold in developing the Fort Knox gold mine near Fairbanks and with Echo Bay on the A.J. Mine near Juneau, has encouraged him to return.

"We see Alaska as a good place to do business," Ewigleben said. "We're shifting our emphasis in North American exploration in the direction of Alaska."

Not only does Alaska offer potentially large geological discoveries and considerable lands that are relatively unexplored, the state has good infrastructure and talented workers to supply most facets of mine development.

"We're aware of the very educated workforce of available people with talents we would need in a mining operation," Ewigleben said. "There are good consultants in Fairbanks, Anchorage and Juneau that we would need for environmental, regulatory and community affairs … the non-geological assets."

Pogo area land holdings grow

AngloGold recently has focused considerable attention and effort on expanding its land holdings around the Pogo gold deposit, being developed by Teck-Cominco and Sumitomo Metal Mining Co.

Claim staking expanded Anglo's presence in the district, giving it a "pretty significant and sizeable" land package, Pontius said. The company's total acreage now is 61,000 hectares (235 square miles).

Anglo's staking, which started in late 2002 and has continued through this spring, includes areas immediately south of the Pogo claim block, several miles southeast and southwest of Pogo, and an area near the Richardson Highway called Shaw Creek.

AngloGold and its joint venture partner on the ER and the Eagle properties, Rimfire Minerals, together staked additional ground surrounding those prospects late last year. The ER property, just a few miles west of Pogo, is now a 16.5-square mile claim block, according to Rimfire.

Eagle, several miles southwest of Pogo, is 24.6 square miles in size. That property will be drilled this year, as will ER, Pontius said.

"We have a geology model that we're following, and that is what is driving our staking," Pontius said. "We're following our exploration sense and looking for areas of opportunity."

Resurgence in Pogo staking

Anglo is leading what appears to be resurgence in claim staking surrounding Pogo, which sparked more than 150 square miles of claim staking in 1998, after developers announced a resource and development plans for the high-grade deposit.

Pogo, estimated to contain about 5.5 million ounces of gold with an average grade of about a half-ounce per ton of rock, has recently received all state and federal permits and has moved into the pre-construction stage.

"Pogo never got the due attention it should … it's going to be a low-cost, good money maker for its developers," said David Caulfield, president of Rimfire Minerals. "It's a good jurisdiction in that you can still go and stake close or pretty close to Pogo."

Rimfire was one of the few juniors that held onto its Pogo-area land, through the late 1990s and into 2000, when it signed a joint venture agreement with AngloGold.

"Because of the downturn in the market, the Canadian juniors found it very difficult to hold onto their ground, and a lot came open," Pontius said. "Those claim positions that were dropped - we've taken advantage of to stake perspective opportunities."

Total claims staked in the Pogo area are more than 500 square miles, or 322,920 acres, according to Kerwin Krause, property manager for the Alaska Department of Natural Resources.

Of those claims, about 200,000 acres of land - 312.5 square miles - have been staked since late 2002, throughout 2003 and in the first months of 2004, Krause said on April 7.

Claim staking activity "triggered when the (Pogo environmental impact statement) was almost done and the gold price went up," he added.

In addition to lands adjacent to Pogo, interest picked up on the Shaw Creek/Richardson Highway area, Krause said. About one-quarter of the Pogo area claims - some 80,000 acres of land - has been staked by several companies in that area, including AngloGold, Rimfire, WGM, On-Line Exploration, Kennecott and Great American Minerals Inc.

"Anglo has had no competition in the district, so they've had time to slowly plod away and sort out what is going on there. They've acquired a lot of land and you need a large land position because you do not know where the next one will be," Caulfield said. "This will be the year that people start to wake up."

One large land package still available is 30 to 40 miles north of Pogo. The Alaska Mental Health Trust Authority has 180,000 acres of land that has been previously leased by majors in the exploration and mining industry, including Barrick, Newmont and Kennecott, said Mike Franger, manager for the trust's minerals and oil and gas leasing.

Final budgets not out

With that much land for prospecting, Anglo's contractor, Fairbanks-based Northern Associates, will have a number of workers on the ground, sampling and conducting basic reconnaissance work, Pontius said. He expects a crew ranging from 15 to 20 workers to begin work in late May, depending on weather conditions.

Anglo's final budget for its Alaska properties has not yet been determined, and exploration permits have not yet been filed.

Last summer, crews drilled about 7,000 feet in six holes on the ER property, according to Rimfire's press release. A total of 24 intercepts with gold grades greater than one gram per ton (0.032 ounces per ton) were reported by Rimfire last September.

The largest intercept measured 12.4 feet with an average grade of 0.03 ounces per ton. The highest grade was a half-foot intercept, grading more than five ounces of gold per ton of rock, producing visible gold in the core.

"The noise, the smoke from the samples is saying, we haven't found an ore body yet, but we're in the neighborhood," Caulfield said.

That initial drilling was "encouraging enough that we will be back taking another stab," Pontius said.