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ALASKAN GOLD---IT JUST KEEPS COMING
by Kathryn G. Arlen

Within the text of its own polished, entertaining, and well-researched brochure, International Tower Hill Mines Ltd. (ITH) reminds us how “gold has played a major role in civilization since the beginning of recorded history. For centuries it has been the only universally accepted means of exchange, providing security for individuals and for countries in times of war and peace.” Although jewelry still remains gold’s primary visible contribution to today’s global society, this ancient precious metal also satisfies investment, electronics, industrial, and even medical needs. Yet as we often associate gold mining with countries such as South Africa, Australia, and Canada, significant U.S. drilling and development continues in California, Utah, Nevada, and Alaska.

Since 1914 the original Livengood placer area within interior Alaska, less than one hundred miles from Fairbanks and near the successful Fort Knox mine, has attracted gold seekers. But heavy production (about 880,000 ounces) stripped rock off the top of the deposit, and eventually the site was abandoned until 1978 when Homestake Mining Company discovered the deeper deposit during exploration drilling. However, they chose not to continue with the project as did a series of subsequent interested parties also investigating mining possibilities.

Enter Anglo Gold in 2000, and over the next few years that company took over the project with continuous drilling, confirming a significant deposit, and consolidating some of the land packages in the area. As ITH was eventually created, the company acquired all Anglo Gold’s Alaskan assets, and by 2006 the drilling program revealed significant mineralization over an area approximately half a square kilometer in size, now enlarged to almost two square kilometers.

In their January 13, 2009 “forward looking” news release, ITH delightedly announced that the “drill results from the final 18 holes of its 2008 resource expansion program from its multi-million ounce [italics added] Livengood gold deposit near Fairbanks, Alaska…continue to highlight the very significant potential for the project—expanding it to the south with some of the best mineralized holes drilled to date.” Additional new gold recovery data also indicates that the mineralization is both amenable to low-cost heap leach recovery and essentially open in all directions and at depth. (“In our mind that was a very significant discovery,” stressed Jeff Pontius, ITH’s president and CEO.)

With the drilling program entering its final stages, ITH (a resource exploration company focused in Alaska and Nevada) is readying for the next developmental step. As Pontius elaborated, “”What we’re trying to do with the deposit is make it a compelling story..:to attract a developmental partner…who most likely will be a major gold-mining company.” However, the project inherits one particular area issue: locking into an adequate power source. Pontius explained “..we’re 35 miles south or to the north of the grid” and even if they were able to connect to it, “generation capacity within the state is limited.” But solutions to this challenge lie within current working, viable, state capabilities. Development of hydro-electric projects is possible: “One of the things that Alaska has, a huge positive from the power standpoint, is that it has a lot of potential for hydro-electric,” he added.

But perhaps even more appropriate would be development of the much-revered, long-awaited, in-state gasline. “The other thing that Alaska is looking into right now is…the bullet line that they’re talking about.” Pontius’ observations could not have been timelier, as Gov. Palin recently announced that this project ranks at the top of State priority issues for the upcoming legislative session. In this plan, Livengood benefits by lying directly along the TransAlaska pipeline route and would be, therefore, a potential industrial user after the line jets out across the Yukon directly towards Livengood, creating a power plant hub.

Pontius cited other Alaskan mining development advantages further empowering the Livengood deposit. First, as a general public reminder about the “…extremely rigorous permitting process, particularly in Alaska…A very positive thing for the state of Alaska is that there is a group within the state, a large permitting group in the Department of Natural Resource, that are sort of the lead agency for many of large mine… projects that will help you navigate through the permit process.” Second: “I think recently Alaska took primacy on their water issues which means that the state determines how their water will be used and not the federal government, so now you have Alaskans deciding how they want to use their water resource.”

Mental health projects in Alaska will also benefit from Livengood’s successful development. As is this case with many potential mining areas in the state, the Mental Health Land Trust owns and leases the land hosting the Livengood deposit and would receive certain royalties. Mike Franger, senior resource manager for the land trust, stressed: “We’re just hopeful that [Livengood] turns out to be successful and the property gets developed so it generates revenue for the trust” when the project begins production.

Many Alaskans look forward to the immense economic potential this gold deposit could afford both the area and the state, as State House Representative and Resources Committee member Scott Kawasaki analyzed, “…in Livengood is further proof of Alaska as the gold capital of the U.S. The millions of ounces are going to allow us to continue development well into the future. Industry continues to need mineral development, despite the recent economic downturns. It is safe to say that mining will contribute a significant portion into the state economy” for many years to come.

Jeff Pontius and ITH certainly agree. Livengood’s successful development, possibly equivalent to its Fort Knox neighbor, can provide more long-term jobs, boost the local economy, contribute towards more positive overall state finances, and add a definite, shining, bright spot to our current gloomy economic picture. With the drilling program reaching its home stretch, ITH is preparing for a “compelling economic venture.”

On a previous visit to Fairbanks Pontius offered an honest, insightful philosophy: “Mining is an extracting business. It does make an impact, but we want to minimize that. Mining has gotten a second wind here in Alaska in the last ten years, and we are committed to bringing new opportunities to the state, but always with respect to social, environmental, and cultural values. Alaska’s values are unique.”

Kathryn G. Arlen is a freelance writer and communication consultant in Fairbanks, Alaska, and can be reached at mindmerger@hotmail.com.