Area near Alaska's Pebble deposit booming

The skies north of Lake Iliamna in southwest Alaska are buzzing with helicopters that are supporting numerous drill crews working on exploration projects at and surrounding the Pebble gold-copper-molybdenum-silver deposit.

Leading this summer's activity is Northern Dynasty, a Hunter Dickinson managed mine-development company, which holds options to acquire a 100 percent interest in 36 mineral claims that host the Pebble deposit.

Northern Dynasty bumped up this year's spending plan for Pebble to a total of $25 million in U.S. dollars, $33.5 million Canadian, according to Bruce Jenkins, director of corporate affairs. In early February, the company announced plans to spend $15 million on Pebble, then later revised that upward to $20 million.

This year's work is designed to collect the engineering, environmental and socioeconomic data needed to complete in 2005 a bankable feasibility study and for permit applications to build a large-scale, open pit mine and mill. The company's preliminary plans call for a facility capable of processing from 90,000 to 200,000 tonnes of ore per day over a 30 to 60 year mine life.

Northern Dynasty's spending increase will cover several different aspects of this year's work plan, Jenkins told Mining News on July 6.

"We've added more in-fill drilling, because the size of the probable pit is larger, and some more geotechnical drilling," Jenkins said.

The scope of environmental studies has also expanded, and the company's contractors are conducting a much larger water quality analysis, he said.

"We've also revised our estimate of helicopter use," Jenkins said, adding that additional flight time to support the larger scope of work at the remote property is necessary.

So far, the company's work force at Iliamna and at Pebble has peaked at 43 people, Jenkins said. "It's going exceptionally well and our programs are progressing on pace," he said. "We should have lots of good news coming out in August and September, as we begin compiling numbers."

Initial meetings with state regulators

Northern Dynasty also plans to host another series of public meetings in August in communities near the Lake Iliamna area, to update Pebble's neighboring residents about the company's plans.

In addition, Northern Dynasty has met with state regulators and plans similar meetings with federal regulators to discuss a future mine development permit application. A study plan, outlining the scope of environmental data gathering, has been submitted to the Alaska Department of Natural Resources, Jenkins said, while the permit applications will likely be submitted to regulators next year.

Northern Dynasty acquired an option on the Pebble property in 2002 from Teck Cominco and since then, has focused its extensive drilling work on the known mineralized zone. The company announced in January 2004 a new inferred resource for Pebble, containing 26.5 million ounces of gold and 16.5 billion pounds of copper.

Now, Northern Dynasty's job is to prove up their geological estimate for Pebble. This year's drilling includes substantial infill work designed to move the inferred resource to the measured and indicated resource category, a more certain geological estimate of underground mineralization.

Four drill rigs are working on site, with plans to complete more than 130,000 feet of samples this year. In addition to infill drilling, some exploratory drilling for new zones and unexplored targets is planned, the company said in a May 5 press release.

"As currently defined, the Pebble deposit is open to the east, west and to depth, with the higher grade mineralization open to the south and the southeast," the company said.

Surrounding interest

Other companies interested in the Pebble area staked a large number of state mining claims nearby in late 2003.

A recently formed Vancouver, British Columbia-based junior exploration company, Full Metal Minerals, this spring optioned claims staked by Alaska Earth Resources Inc.

Full Metal announced July 6 that the company started work earlier this year on its Pebble South claim block, a 300 square kilometer (115 square mile) section of land south of Northern Dynasty's Pebble property.

A Phase 1 reconnaissance mapping, sampling and regional stream sampling was completed earlier this year, with 1,200 samples collected. More than 35 line kilometers of induced polarization geophysics are planned for the property, with 17 line kilometers already completed, work designed to identify drill targets.

The company's land holdings are located "at the intersection of three major structural trends that are coupled with favorable airborne magnetic anomalies," the company said in a July 6 press release.

Liberty Star preps for drilling

The other major player in the Pebble land rush is Tucson, Ariz.-based Liberty Star Gold Corp. Liberty Star's consultant, Fairbanks-based Avalon Development, in December 2003 completed the largest one-time acquisition of state claims in Alaska's mining history.

Liberty Star now holds 981 state mining claims in the Iliamna region, a property called the Big Chunk. This spring the company completed a 1,402 square mile airborne geophysical survey of the area, with spacing of six lines to the mile. The flight lines covered about 12,500 linear miles, according to the company's June 1 press release.

"The four magnetic anomalies outlined from initial analysis of compiled data will be the subject of immediate ground follow-up," the company said in the release.

In addition, detailed satellite imagery has been used to identify mineral signatures of alterations similar to Pebble, locating three additional targets on the Big Chunk property. Liberty Star plans a geochemical program over those targets, anticipating that work will define additional targets, the company said.

Field offices were opened by Liberty Star in Iliamna on May 26. Zonge Engineering has been retained to provide ground electrical geophysics, IP (induced polarization) or CSAMT (Controlled Source Audio-range Magneto Tellurics) to further refine potential drill targets, work planned for late July or early August.

Drilling on identified targets is expected to begin in the middle to later part of August, the company said.