By David Szumigala, Alaska Division of Geological & Geophysical Surveys, Department of Natural Resources, and Richard Hughes, Alaska Office of Economic Development, Department of Commerce, Community & Economic Development.

Alaska’s mineral industry had a very strong year in 2005, propelled by strong metal prices and renewed interest in Alaska’s outstanding mineral endowment. Total value of Alaska’s mineral industry in 2005 was approximately $1.83 billion, the tenth straight year above $1 billion and a new record value. Highlights for the Alaska’s mineral industry are the continued construction at Teck Cominco-Sumitomo’s Pogo gold project and the beginning of construction at Coeur’s Kensington gold project. Exploration expenditures rose above robust 2004 levels. Alaska’s lode mines continue high production levels. A handful of projects have or will begin major development work, with new gold mines expected to begin production in 2005 and 2006.

Alaska’s mineral production dominated by base metal production from Teck Cominco-NANA’s Red Dog Mine in northwestern Alaska and Kennecott Minerals-Hecla Mining’s Greens creek mine in southeastern Alaska. Production from Red Dog, the world’s largest zinc producer, accounted for 65% of Alaska’s annual mineral production value. Both Red Dog and Greens Creek mines continued strong production in 2005. Kinross Gold’s Fort Knox gold mine, near Fairbanks in Alaska’s Interior region, produced 329,000 ounces of gold during 2005. Strong gold prices and high diesel process during 2005 likely led to a slight decrease in placer gold production (28,074 ounces produced in 2004).

Construction at Teck Cominco-Sumitomo’s Pogo underground gold mine complex in Interior Alaska is expected to cost $347 million and to be completed by June 2006, with gold production anticipated in the first quarter 2006. Construction at Coeur Alaska’s Kensington underground gold mine complex in southeastern Alaska began in mid-year 2005. St. Andrew Goldfields Ltd. plans production in 2006 at the historic high-grade Nixon Fork gold-copper mine in west-central Alaska. NovaGold Resources’ Rock Creek gold project on the Seward Peninsula is likely to undergo construction in 2006, with first production projected for early 2007.

Exploration expenditures in Alaska during 2005 were $101 million, 43% higher than the $70.8 million spent in 2004. At least 16 projects had exploration expenditures of $1 million or more and these projects spanned across Alaska. Total drilled footage for exploration and development of hard rock and placer resources was 194,843 meters. As in years past, most exploration funds (>70%) were from Canadian sources. Advanced exploration projects include Placer Dome-NovaGold-Calista Corp’s 28 million ounce Donlin Creek intrusion-hosted gold project and Northern Dynasty’s Pebble porphyry copper-gold project in southwestern Alaska. The Pebble project, with announced measured and indicated (M&I) resources of 31.3 million ounces of gold, 18.8 billion pounds of copper, and 993 million pounds of molybdenum, was the largest exploration project in 2005. It spurred additional exploration for porphyry copper-gold systems in southwestern Alaska, notably by Liberty Star Gold Corp. Continued exploration around the Fort Knox and Greens Creek mines made discoveries that extended mine resources. AngloGold Ashanti led exploration for intrusion-related gold deposits in Interior Alaska, and several companies continued projects in the Fairbanks district. Base metal exploration was led by NovaGold Resources’ exploration of the Arctic VMS deposit in the Brooks Range. Platinum and associated metals exploration continued at the MAN project in the Alaska Range by Anglo American, and Nevada Star Resources; similar mineralization nearby by BC Metals; and at Union Bay in southeastern Alaska by Lonmin, Pacific North West Capital and Freegold Ventures.

In 2006 outlook of strong metal prices and increased funds for exploration is positive for Alaska’s mining industry. Alaska has world-class mineral deposits and Alaska’s major mines are showcase examples of modern mining. Alaska remains highly unexplored compared to other regions in the world, but recent exploration successes hint at Alaska’s excellent mineral discovery potential.