The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Alaska gold operation becomes first overseas mine operated by Sumitomo Metals Mining
Sumitomo Metal Mining Co. Ltd. and Sumitomo Corporation closed a deal in July to purchase Teck Resources Ltd.'s 40 percent interest in the Pogo Gold Mine in Interior Alaska.
The transaction required the Japanese companies to pay Teck US$245 million, plus an undisclosed amount of working capital. As a result, Sumitomo Mining and Sumitomo Corp. now own 100 percent of Pogo, with the former increasing its share to 85 percent from 51 percent, and the latter to 15 percent from 9 percent.
Sumitomo Metal Mining has been a comprehensive nonferrous manufacturer since the 16th century. The 400 year-old-business said the acquisition of the remaining interest in Pogo is a significant step toward becoming a major force in the nonferrous metals industry.
The Japanese mining firm established Sumitomo Metal Mining Pogo LLC with US$41.5 million in paid-in capital as a local interest holder and operating company to take over from Teck and carry out mine management and operation, the buyers said in a joint statement.
Teck has continued to assist Sumitomo Mining with operating the mine during the transition, according to a Teck spokesman.
Advancing Pogo
The new Pogo operator is continuing a US$4 million exploration program started by Teck at the beginning of 2009. Pogo General Manager Larry Davey told Mining News that the 65,000 feet of drilling completed at the high-grade gold mine is aimed at adding additional ounces to the reserves.
About 13,000 feet of the 2009 program was drilled underground with the remaining 52,000 feet being drilled into near-mine surface targets.
Davey said Sumitomo intends to continue to focus on expanding the near-mine reserve with its exploration program in 2010.
Sumitomo discovered the Pogo orebody in 1994, and along with Teck, advanced it to the production stage in a little more than 11 years. Pogo is regarded as the first overseas investment into gold mine development by a Japanese company.
Pogo produced 347,219 troy ounces of gold in 2008 from 818,237 tons of ore processed at a rate of 2,236 tons per day.
In an effort to boost mill production to 2,500 tpd, circuit optimization and recovery improvements as well as underground development to open up additional ore headings are being completed at Pogo in 2009.
The Pogo Gold Mine is the first overseas mine managed and operated by Sumitomo Metal Mining, and the Japanese company said it believes that results at the high-grade underground gold mine will provide further valuable opportunities for overseas mine development and operations.
Meanwhile, Sumitomo Corp. said it positions investment in, and management of, prime nonferrous mines as one of its core businesses, and firmly believes the acquisition of a larger stake in the Alaska mine "will be highly beneficial towards investment and mine management participation."
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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