The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Ewigleben, Irwin lead efforts to develop 20-million-ounce Livengood gold project; CEO says AngloGold ties do not limit options
Don Ewigleben and Tom Irwin - two figures that played key roles in the development of Kinross Gold Corp.'s Fort Knox Mine - are once again united to develop a world-class gold deposit in Interior Alaska.
Filling a void created by the sudden departure of James Komadina in May, International Tower Hill Mines Ltd. appointed Chairman Ewigleben president and CEO of the company looking to develop the 20-million-ounce Livengood gold project.
Ewigleben, a lawyer who spent 35 years overseeing legal, regulatory environmental and government affairs in the mining industry, was appointed chairman of Tower Hill's board of directors in November, but his ties to the Livengood deposit date back nearly a decade.
In 2003, Ewigleben ascended to president of AngloGold Ashanti, North America, a position previously held by Komadina. He later assumed the CEO position of that company. During his tenure as AngloGold's top executive in North America, the South African gold company was investigating a then little-known gold prospect at Livengood.
Leading up to the Sept. 20 appointment as top executive at International Tower Hill, Ewigleben played an increasingly active role in the upper echelons of the company. Upon Komadina's departure, the day-to-day operations fell upon the shoulders of an executive committee consisting of Ewigleben, who had been serving as chairman for six months, and Tower Hill founder Jeff Pontius.
Ewigleben's transition from chairman to executive is underscored by a Sept. 7 presentation at the 2012 Precious Metals Summit in Colorado.
"It is a world-class deposit in a world-class jurisdiction, and we have got a world-class team to build it," was the crux of the message Ewigleben delivered to investors and fellow miners at the gathering.
World-class team
The appointment of Ewigleben to Tower Hill's top job follows an August promotion of Irwin to the positions of vice president, Alaska, and president of Tower Hill Mines, Inc., a U.S. subsidiary of International Tower Hill Mines.
Prior to joining the Tower Hill team as construction manager of the Livengood project in 2011, Irwin had served as commissioner of Alaska Department of Natural Resources, a public service role he filled under two administrations.
As DNR commissioner, Irwin oversaw the state's interest in the permitting of resource development projects in Alaska and played a key role in setting up its large mine permitting team.
"Not only do we know what that permit program is, we actually have the guy that invented that permitting path in Tom Irwin," Ewigleben observed.
Prior to his public service, Irwin spent more than 35 years optimizing, operating and permitting major mining projects, including Amax Gold Inc.'s Climax mine in Colorado and Sleeper mine in Nevada.
Ewigleben, who also worked for Amax Gold at the time, was involved in luring Irwin to help engineer and design the Fort Knox Mine, which is located about 60 miles (100 kilometers) southeast of Livengood.
"I am one of the team members that bought Fort Knox for Amax and had a chance to ask a gentleman from the Sleeper mine by the name of Tom Irwin to come over and help us build that project," the soon-to-be Tower Hill CEO told the audience at the Precious Metals Summit.
From 1992 to 1996, Irwin served as vice president of Amax subsidiary, Fairbanks Gold Mining Inc., and was responsible for engineering at Fort Knox during mine design.
He stayed with Fort Knox following Amax's merger with Kinross, serving as manager and vice president, business development at the mine through 2003.
The recent management vacuum at Tower Hill also has pulled Karl Hanneman up the ranks to serve as Alaska general manager. Hanneman, who has been with International Tower Hill Mines since 2010, was largely responsible for assembling the company's technical team in Alaska and served as Livengood project manager.
Hanneman earned a bachelor's of science (honors) degree in mining engineering from the University of Alaska, is exceptionally familiar with what it takes to get a mine permitted in the state.
Prior to joining Tower Hill, he spent 12 years playing a senior role in Teck Resources Ltd.'s project development and permitting in Alaska
From 1998 to 2004, he served as Alaska regional manager during the exploration, development, and permitting of the Pogo Gold Mine.
During the second half of his tenure, he served as director, corporate affairs. In this role Hanneman was Teck's senior corporate representative in Alaska; providing strategic guidance on governmental, regulatory, permitting, and community issues related to the Red Dog Mine.
"Tom, Karl, and the Alaska-based team have an unparalleled track record of success in permitting and development of mines in Alaska. This exceptional Alaskan team continues to rapidly advance our exciting world-class Livengood gold project toward production," Ewigleben said.
World-class deposit
During Ewigleben's tenure as president and CEO of AngloGold, North America, Livengood was one of a number of prospects the South African gold company was exploring in Alaska.
When AngloGold withdrew from the Far North state in 2006, Jeff Pontius, then exploration manager for AngloGold, North America, seized the opportunity.
"When Anglo decided they were going to redirect their exploration funding to different areas of the world in 2006, to me it looked like a great opportunity to do two things: one, to get my hands on Livengood and to start a junior gold exploration company, which is something I always had wanted to do; and two, to get to go through the experience of developing a major gold deposit again. It is a very exhilarating experience to do that. They don't make anything (else) that provides that kind of thrill and excitement," Pontius told Mining News.
It did not take Pontius and AngloGold geologists who joined him to launch Tower Hill long to realize they were onto something big at Livengood. Based on the first 39 holes tapped into the intrusion-related deposit, the young company put together an inaugural resource of 1.9 million ounces of gold at a grade of 0.71 grams per metric ton (at a 0.5 g/t cut-off grade) early in 2008.
Three years later, Tower Hill has expanded that initial gold resource estimate for the appropriately named Money Knob deposit by seven-fold.
With an all-in resource of 20.6 million ounces of gold, Money Knob at Livengood ranks as the 14th largest undeveloped deposit of gold on the planet, according to a research report published by Natural Resource Holdings in July.
"It worked out well for them (AngloGold) I think, so it was really a win-win situation for both of us. We got to go forward and do what we like to do best, myself and my exploration team that came with me from Anglo, and Anglo got exposure to a major new discovery," Pontius explained.
Using a cut-off grade of 0.22 grams of gold per metric ton, which is seen as an economic cut-off for the operation that Tower Hill currently envisions for Livengood, the Money Knob deposit contains a measured and indicated resource of 933 million metric tons averaging 0.55 grams per metric ton gold (16.5 million ounces), plus an inferred resource of 257 million metric tons averaging 0.50 g/t gold (4.1 million ounces).
During his Sept. 7 presentation in Colorado, Ewigleben spent minimal time addressing the upside potential of the 56-square-mile (145 square kilometers) Livengood land package, reflecting Tower Hill's focus on developing the world-class gold deposit.
He said the company is spending US$1 million to US$2 million per year on reconnaissance drilling on four outlying exploration targets.
"When you have 15-plus-million-ounces, you have a shareholder base that says 'get on with it' and that's what we are doing in our feasibility study work," Ewigleben said.
Though Tower Hill is not looking for more gold, its geotechnical and condemnation drilling continues to find the precious metal well beyond the confines of the Money Knob deposit - including one hole that cut 3.8 meters grading 6.9 grams per metric ton gold about 1 mile (1.6 kilometers) northeast of the deposit.
MK-12-281, drilled nearly 3,000 meters southwest of Money Knob, cut 2.76 meters averaging 2.75 grams per metric ton gold; MK-12-285, drilled about 1,500 meters east of the deposit, cut 2.01 meters averaging 3.47 g/t gold; MK-12-288, drilled some 1,500 meters west of Money Knob, cut 3.05 meters averaging 2.48 g/t gold; and MK-12-290, drilled about 1,600 meters northeast of the deposit, cut 3.81 meters averaging 6.91 g/t gold.
Tower Hill said the locations of these new gold intercepts do not impact the conceptual plan for developing the mining-related infrastructure contemplated in the feasibility work, the current focus of the company.
Crunching the numbers
Using a preliminary economic assessment completed in 2011 as a starting point, the Tower Hill team is crunching the numbers on the feasibility of building a mine at Livengood.
According to the PEA, a 91,000-metric-ton-per-day mill at Livengood would churn out 12.9 million ounces of gold over 23 years. As part of Tower Hill's feasibility work, the company is studying different scenarios seeking the appropriate balance of capital expenditures and operating costs.
Ewigleben said the 560,000-ounce-per-year operation anticipated in the PEA is at the low end of various scenarios being contemplated.
While the scope of the operation appears to be growing, the new Tower Hill CEO said the goal is not to build the biggest mine; instead, return on investment is driving the size of the operation that will ultimately be built.
According to Ewigleben, the US$1.6 billion of capital needed to develop the project, a sum that is expected to climb, is the "biggest issue" in front of Tower Hill.
"That means we have to look at every available alternative, and we are doing so," he said. "We might have some partnership, some strategic alliance or some other application as to how we deal with it."
AngloGold Ashanti, which gained an equity position in Tower Hill in exchange for Livengood and its other Alaska projects, continues to hold close managerial ties and significant shares of the company. Despite these connections, Ewigleben said Tower Hill's options remain open.
"AngloGold Ashanti, where Jeff and I both worked, still holds that 11.5 percent equity position but that is the only hold they have on this project, so we have variability as to how we want to move forward with it," he said.
"We are glad they are our partner as an investor, but generally speaking, they no longer have anybody on our board," Ewigleben added.
World-class jurisdiction
Located alongside a paved highway about 70 miles (110 kilometers) north of Fairbanks, a town founded on gold mining, the location for the proposed mine at Livengood does not get much better.
"We have exceptional infrastructure on this project: it is on a main paved highway; we are 50 miles from power; we know every aspect of this jurisdiction because many of our team members worked on Fort Knox," Ewigleben explained to the Colorado crowd.
The proximity to Fairbanks also provides a strong mining work force.
"About the time Fort Knox drops off in production, we are going to be able to pick up some highly qualified employees," said Ewigleben.
He said the large military bases that anchor the Interior Alaska town provide another large pool of skilled labor.
Leaving the controversial Pebble Project unnamed, the Tower Hill CEO said Livengood's Interior Alaska location means it does not have the same environmental issues facing projects in other regions of the state.
"With the benefit of my long history with the Livengood project dating back to 2003 and my past association with the development of the Fort Knox project, I am confident Alaska is one of the best mining jurisdictions in the world, and I believe in Livengood as a world-class multi-million-ounce gold project," Ewigleben said upon being named Tower Hill CEO.
The feasibility study is due to be ready for internal review by Tower Hill management and peer review early in 2013 and made public by mid-year, marking the official launch of permitting.
With a team that understands what it takes to build a mine in Alaska and with minimal opposition expected Ewigleben sees first gold from a mine at Livengood in 2018.
"With Tom Irwin and our strong development and permitting team in place, I believe we are uniquely positioned to move Livengood forward towards production," added the new Tower Hill CEO.
Daniel Carriere, an International Tower Hill Mines board member since April 2010, replaced Ewigleben as chairman of the company.
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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