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www.MiningNewsNorth.com The weekly mining newspaper for Alaska and Canada's North Week of January 24, 2016

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Borough hikes Red Dog tax; Teck,NANA urge officials to negotiate

NEWS NUGGETSCompiled by Shane Lasley

Ketchikan-based Orca Holdings nabsa 10% stake in Ucore Rare Metals

Ucore Rare Metals Inc. Jan 15 said two U. S.-basedinvestors have exercised their right to convert their investmentsin a royalty related to the processing of rare earth elements andother specialty metals into common shares of the company. Theroyalty would have been paid on sales and income associatedwith the Ucore’s first installation utilizing molecular recogni-tion technology. The US$5.3 million the investors paid for theroyalties will be converted at a rate of C25 cents per Ucoreshare, resulting in a total of 30,470,760 shares being issued.The majority of those shares (81 percent) are owned by OrcaHoldings LLC, a Ketchikan, Alaska-based enterprise controlledby Ucore advisory board member Randy Johnson. The transac-tion resulted in Orca becoming a 10 percent shareholder ofUcore, and Johnson is now a reporting insider of the company.Johnson believes the best way for Orca and its shareholders tobenefit coming from the upside of Ucore, especially at currentU. S.-Canadian dollar exchange rates, is to convert its royaltiesinto company shares. “Orca has elected to convert its royaltyinto shares for many reasons, all of which have to do with ourvery strong belief in Ucore as an emerging leader in the globalrare metals business,” explained Johnson. "”Orca is going longon Ucore, and we believe that the most effective way to obtainappreciation in our investment is via equity as opposed to adebt (royalty-based) position.” Johnson said Orca is committedto retaining its position in Ucore over a number of years.“We’re extremely pleased to welcome Mr. Johnson as a report-ing insider of Ucore,” Ucore President and CEO Jim McKenziesaid. “Randy has built an impressive industrial resume inAlaska and beyond, and his experience in company-buildingwill be a significant asset and resource to us as Ucore enters itsearly production phase.”

Usibelli employees end 2015 unscathedUsibelli Coal Mine Inc. Jan. 15 commended its 115 employ-

ees for reaching the important milestone of no lost-time injuriesduring 2015. “The employees of UCM have dedicated them-selves to safety awareness and communication. Every employ-ee practices it every day, resulting in achieving a year and a halfwithout any lost-time accidents. It’s a true team effort and amilestone we’re all proud of,” UCM President Joe Usibelli Jr.said. This milestone sits in the midst of a run of more than 550consecutive days without a lost-time injury. “To reach this goalrequires an enormous amount of time and energy to implement.We have established a safety culture in the workplace andencourage the same awareness on the home front,” explainedUCM General Manager Alan Renshaw. While proud of the cur-rent safety milestone, UCM Safety Director Matt Nelson hasloftier targets for employees of the Usibelli Coal Mine in Healy,Alaska – break the 797-day record set by the company in 2006.Usibelli Coal Mine, a fourth generation, family-owned, all-Alaskan business, said it will produce 1.3 million short tons ofultra-low sulfur, subbituminous coal in 2016.

IG finds no evidencePebble says EPA watchdog’s findings belie record of bias, predetermination

By SHANE LASLEYMining News

After 17 months of investigation, the U.S.Environmental Protection Agency Office of

Inspector General said it could find no evidencethat the federal agency was unfair while conduct-ing an assessment of the Bristol Bay Watershed.The conclusion, however, runs counter to those ofothers who have reviewed the case.

The EPA’s Bristol Bay Watershed Assessment isa study of the potential risks large-scale miningmight pose to the abundant fish resources in theBristol Bay region of Southwest Alaska.

“Based on available information, we found noevidence of bias in how the EPA conducted itsassessment of the Bristol Bay watershed, or thatthe EPA predetermined theassessment outcome,” the IGoffice penned in the 30-pagereport.

Pebble Partnership CEOTom Collier said the findingssharply contrast with thereams of evidence that theState of Alaska, his companyand others provided to thewatchdog.

“I have never seen an IG report that I thoughtwas as poorly done as this one,” the longtimeWashington D.C. insider told Mining News Jan.18.

The publication of the brief report by the EPA’sinternal investigative body sets the stage for argu-ments in an ongoing federal trial as well as contin-ued U.S. Congressional committee probes into theEPA’s potentially illegal activities.

No bias found?Though EPA IG office said it found “no evi-

dence of bias or predetermination” in the EPA’sconduct, a number of documents uncovered by theU.S. House Oversight and Government ReformCommittee and turned over to the inspector gener-al prior to its investigation appeared to show that atleast some upper level officials in the EPA haddecided as early as 2010 that development of amine at Pebble needed to be stopped and was look-ing for the best avenue to achieve this goal.

One such document brought to light by theHouse watchdog is a December 2010 request forfunds to “initiate the process and publish a CWA404(c) ‘veto’ action for the proposed permit for thePebble gold mine in Bristol Bay.”

In making the request for 2011 funds, the EPAOffice of Water budget wrote: “While resorting toexercising EPA’s 404(c) authority is rare (only 12actions since 1981), the Bristol Bay case repre-sents a clear and important need to do so given thenature and extent of the adverse impacts coupledwith the immense quality and vulnerability of thefisheries resource.”

Of the thousands of pages of documents handedover to the EPA Inspector General Office, this isone of only a handful referred to in the report. Thewatchdog, however, said this is evidence thatthough EPA staff were discussing the potential of

initiating a Section 404(c) review of Pebble, itdoes not demonstrate that a conclusion to thisprocess had yet been determined.

“There were EPA staff and managers who wereconsidering a CWA Section 404(c) process prior tothe EPA’s official announcement to conduct theassessment, but we did not uncover any evidenceof a predetermined outcome in any of the docu-ments or emails we reviewed or interviews weconducted,” according to the report.

An internal EPA worksheet listing the pros andcons of a pre-emptive CWA Section 404(c) reviewof Pebble versus letting the project go into permit-ting, however, seems to show that upper level EPAofficials were discussing the best way to stopdevelopment of the enormous copper project usingthis process.

The top drawback listed in the con column ofthis 2010 “discussion matrix” was that a proactive404(c) determination had “never been done beforein the history of the CWA.”

The agency listed political backlash and litiga-tion risks as other potential negative outcomes ofattempting to use 404(c) to stop Pebble prior topermitting. The document suggests that some formof public process would help deflect some of thisbacklash, which is the route the agency ultimatelytook in the form of the Bristol Bay WatershedAssessment.

The document also said that a pre-emptive404(c) decision at Pebble could serve “as a modelof proactive watershed planning for sustainabili-ty.”

Pebble CEO Collier said this statement shedssome light into EPA’s motivation.

“They want to zone watersheds,” he explained.

North acted alone?One thing that the Pebble Partnership and the

EPA Inspector General agree on is that Phil North,a former Alaska-based EPA biologist, workedinappropriately closely with parties opposed todeveloping a mine at the Pebble deposit.

“We did find that an EPA Region 10 employeeused personal non-governmental email to providecomments on a draft Clean Water Act Section404(c) petition from tribes before the tribes sub-mitted it to the EPA,” the EPA Inspector Generalwrote.

The investigative body said it could find no evi-dence that North’s involvement in editing the peti-tion was known by his superiors.

“The report concludes that no one at EPA knewthat Phil North was engaging in this improper con-duct with environmental activists; we have emailsthat show almost a dozen people did,” Collier said.

This evidence indicates that EPA managementas high as Dennis McLerran, the administrator forregion 10, which includes Alaska, was aware of theclose relationship between North and Pebbleantagonists.

A January 2010 briefing for then EPAAdministrator Lisa Jackson shows that during thesame time that North was helping Pebble antago-nists draft the petition, officials in EPA’sWashington D.C. office were already discussing

see PEBBLE REVIEW page 12

TOM COLLIER

Ketchikan, Alaska-based Orca Holdings now owns 10 percent ofUcore Rare Metals, the company hoping to develop a mine at theBokan Mountain rare earth project located about 40 miles south-west of Ketchikan on Prince of Wales Island.

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10NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF JANUARY 24, 2016

Shane Lasley PUBLISHER & NEWS EDITOR

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NORTHERN NEIGHBORSCompiled by Shane Lasley

Yukon's only operating lode mine set to close;re-opening dependent on copper market outlook

Capstone Mining Corp. Jan. 18 said it plans to temporarily halt operations atits Minto copper mine in Yukon Territory in 2017. The planned closure is partof an overall cost-cutting initiative by the company. “In light of the currentcommodity price environment our 2016 guidance and five-year outlook focuseson financial flexibility, while maximizing the cost efficiency of our existingoperations,” explained Capstone President and CEO Darren Pylot. For 2016,the Minto Mine is expected to produce 27,000 metric tons of copper at an all-incost of US$1.30-US$1.40 per pound. Capstone said the low 2016 productionand operating costs at Minto reflect a significant contribution from the high-grade Minto North open pit. Head grade is expected to average 1.3 percent inthe first quarter, ramping up to over 2.6 percent in the second half of the year,resulting in significantly lower costs. Surface mining of the Minto North pit isexpected to be completed in August, with the mill continuing to process MintoNorth material until the end of the first quarter of 2017. The company saidunderground mining will be stopped by the end of March and the rest of theoperation will be temporarily closed once all the ore from Minto North and theremaining stockpiles are processed by mid-2017. Future decisions will dependon a number of factors, most notably an improvement in the copper market out-look. Capstone is not planning any exploration at Minto in 2016 and limitedsustaining capital expenditures are budgeted for the mine due to the expectedclosure. Minto is the only currently operating hard rock mine in the YukonTerritory.

TMAC forms C$325 million tactical plan aimedat increased gold for coming Hope Bay Mine

TMAC Resources Inc. Jan. 14 plans to invest C$325 million on a tacticalplan budget that aims to have its Hope Bay gold project in Nunavut ready toramp to an operation that averages 1,000 metric tons per day in 2017. This newplan, which involves a C$35 million increase over a previous “path to produc-tion” budget, includes the accumulation of an ore stockpile sufficient to supportramp up to 2,000 metric tons per day by 2018. The tactical mine developmentplan, which runs for the period from the beginning of 2016 to the end of 2018,contains several changes in scope from a 2015 pre-feasibility study, including:increased underground development in 2016; larger low-grade stockpile for millcommissioning; 55,600 ounces of gold (at 15.2 grams per metric ton) in high-grade stockpile for mill start up, 30,200 ounces greater than the PFS; de-riskingproduction ramp up; increased in gold production in 2017; and drilling topotentially extend Doris deposit below current reserves. “We are pleased withour progress in moving the Hope Bay Project to production, and delighted thatthe project remains on schedule for first production in late 2016,” said TMACCEO Catharine Farrow. The exploration and geoscience budget for 2016 totalsC$10.8 million. The 2016 exploration drilling program comprises surface andunderground diamond drilling targeting both near-term (one- to three-year) pro-duction areas and longer-term expansion of resources at Doris. The main objec-tives are to facilitate detailed stope design within certain areas of the current

see NORTHERN NEIGHBORS page 12

l O P I N I O N

For miners, tomorrowis another dayThe economy is crashing, commodities are down, the White Househates us; but other than that, how do you feel about the future?

I wanted the gold and I sought it,I scrabbled and mucked like a slave;Be it famine or scurvy, I fought it;I hurled my youth into the grave…

“The Spell of the Yukon,”by Robert Service

By J. P. TANGENSpecial to Mining News

Ido love metaphors and aphorisms;there’s one for every occasion. For

instance, it is often noted that, on the onehand, it is always darkest before the dawnand, on the other, that the light at the endof the tunnel is another train. It would befolly to believe that in today’s environ-ment, things will be better, economically,in Alaska, any time soon; however, experi-ence teaches that the current disaster will,like all others, one day pass.

Here’s the scenario: Alaska is aresource state heavily dependent upon itsresources, primarily oil, but also to somedegree mining, for its well-being. ThePresident, in his wisdom, chose to elimi-nate sanctions against Iran. The Saudisdon’t like Iran, so they have caused theprice of oil to drop, ensuring that Iran doesnot make as much money as it might hopeselling oil into the open market. That alsostifled the global price of other commodi-ties, such as gold.

Some supporters of the President intu-itively feel that mining is a bad thing, sothey have burdened the mining industrywith burdensome sanctions. The Presidentis supportive of exotic sources of energy,but they also contribute to the energy glut.China, in an ambitious quest to foster itsown unique brand of capitalism, hasrepeatedly devalued its currency and hashalted trading in its newly re-organizedstock exchange.

There is a tremendous influx of peoplein the world, not just in North Africa andthe Levant, but also in North America,who are moving north. While certain ele-ments of the receiving communities areresisting such migrations, “opposition isfutile.” Most of the countries targeted byrefugees are either below zero populationgrowth or are close to it. Migrants stereo-typically are seeking opportunity, whetherin the form of resource development orother forms of productivity, and the currentinflux is no different.

Obviously, that’s not just one train com-ing at us, it’s several.

No matter how long the current politi-co-economic siege lasts, there is good

news for us Alaskans and for those of uswho support resource development aroundthe world. The good news is that thosewho come after us, whether our progeny ornewly-minted citizens from foreign lands,will want the benefits of life in an emer-gent world.

Pause long enough to contemplate howthe world changed in the 20th Centuryfrom beginning to end, and then extrapo-late that over the years past and yet to bein the current century. Notwithstanding thesocial hiccoughs that we are currentlyenduring, it is an odds-on certainty that theworld before us will be extraordinarily dif-ferent from the world we know, and everydetail of that new world will require theresources we, in Alaska, produce.

It has always been a given premise thatthe minerals with which Alaska isendowed, whether metallic or hydrocar-bons, will be demanded for the balance ofthe 21st Century and by the ensuing gener-ations which, whether by birth or bymigration, want not just a safe haven tolive in peace, but also electricity and run-ning water.

Alaskans are currently in a tight corner,and many will not be able to withstand thechallenges; but, to paraphrase RobertService: “It’s hell, but [we]’ve been therebefore.”

I take heart from the changed vision ofthe visitors to Alaska whom I encountershare. Gone are the heady days of crap-shooters who came to Alaska with adream, borne of an echo of the gold rushdays that rarely “pans out.” Instead, I, atleast, am seeing among the newcomers asense of reality and an awareness that min-ing and other forms of resource develop-ment can be conducted in ways that feedthe needs of our civilization without pol-luting our world.

Service was right: “When I am skinnedto a finish, I’ll pike to [Alaska] oncemore.” l

Mining & thelaw

The author,J.P. Tangen hasbeen practicingmining law in J.P. TANGENAlaska since 1975. He can be reached atjpt@jptangen.com or visit his Web site atwww.jptangen.com. His opinions do notnecessarily reflect those of the publishersof Mining News and Petroleum News.

By SHANE LASLEYMining News

The Red Dog Mine in Northwest Alaska is highlyregarded as an example of a mining company and

local aboriginal interests sitting down at the negotiatingtable and working out a deal that serves the economicand social interests of both.

A steep tax hike, however, threatens to shorten the lifeof the world-class zinc mine and thereby the partnershipforged between Teck Resources Ltd. and NANARegional Corp. The tax increase was introduced recentlyby the Northwest Arctic Borough, the regional govern-ment that blankets the area where Red Dog is located.

“This tax increase could impact the longevity of RedDog and put the jobs, revenues and economic opportuni-ty it creates in the region at risk,” said Red Dog GeneralManager Henri Letient.

The hefty tax burden for Red Dog comes alongsidezinc prices that are at lows not seen since the market col-lapse of 2009.

“This massive tax hike could not come at a worsetime, as the mining industry is in the midst of the biggestdownturn in decades,” the mine manager added.

In a move aimed at getting Northwest Arctic Boroughofficials to the negotiating table, Teck Alaska has filed acomplaint over the tax hike in Alaska Superior court.

“All we are asking is for the borough to come to thetable and negotiate a reasonable payment that supportsthe region and the continued operation of Red Dog,” saidLetient.

Economic generatorSince 1989, the Red Dog Mine has been an important

economic engine in Northwest Alaska – providing rev-enue for NANA, the Alaska Native regional corporationand the local government as well as providing jobs formany of the residents of the remote region.

“For more than 25 years Red Dog Mine and theNorthwest Arctic Borough have cooperated in a uniqueway, working together to ensure that the benefits of min-ing reach borough residents and communities and allowfor our continued operation,” Teck explained in a Jan. 11letter to Red Dog employees, of which 64 percent areNANA shareholders.

Prior to Red Dog going into production, Teck andNANA reached a mutually beneficial agreement thatallowed the Vancouver, B.C.-based miner to mine one ofthe richest zinc deposits on the planet and provided theAlaska Native corporation an opportunity to establish astrong economic base for its more than 13,800 Iñupiatshareholders whose ancestors settled the northwest cor-ner of Alaska thousands of years ago.

Over the ensuing 26 years, NANA and its sharehold-ers have enjoyed more than US$1.7 billion in royalties,wages and tax payments from the Red Dog Mine.

“To us, Red Dog is an example of how Arctic devel-opment can work to the benefit of Arctic communities,”NANA CEO Wayne Westlake said during a Novemberpresentation at the Resource Development CouncilConvention in Anchorage.

Beyond the progressive partnership forged betweenNANA and Teck, a local government was established to“improve the quality of life for all residents” living with-in the more than 40,000 square miles of NorthwestAlaska that the borough covers.

Over the past 26 years, the Red Dog Mine has paidmore than US$140 million to the borough, accountingfor more than 70 percent of the local government generalfund revenue. This revenue has come in the form of pay-ments in lieu of taxes.

Traditionally, these “PILT” payments are the result ofagreements negotiated between the Red Dog Mine andNorthwest Arctic Borough every five years.

Over the past five years, these negotiated payments tothe borough have averaged nearly US$11.5 million peryear, a total of US$57.5 million for that span.

The Northwest Arctic Borough, however, decided notto renegotiate the PILT payments prior to them expiringat the end of 2015. Instead, the assembly opted to imple-ment a severance tax that would be assessed on the oreextracted in the borough and is expected to more thantriple the payments Red Dog pays to the regional gov-ernment.

Discriminatory, opportunisticTeck contends that the US$30 million to US$40 mil-

lion per year that it will pay to Northwest Arctic Boroughunder the new tax scheme will be roughly seven times asmuch as the sum its nearest peer in the state, KinrossGold Corp.’s Fort Knox Mine, pays out in comparabletaxes.

Fort Knox paid the Fairbanks North Star BoroughUS$5.24 million in taxes during 2014.

Teck said that under that borough’s taxing system, theRed Dog Mine would only pay about US$3.67 million intaxes, or about 10 percent of what Northwest ArcticBorough is levying against the mine.

The mining company characterizes the tripling of analready healthy tax structure as unreasonable, unconsti-tutional and unfair.

The only business that is currently subject to the sev-erance tax is Red Dog, which is already, by far, thebiggest taxpayer in the Northwest Arctic Borough,

accounting for 70-80 percent of the municipal govern-ment’s general funds. Teck argues that this targeted taxhike is discriminatory.

The company also contends that the steep tax increaseis opportunistic, taking advantage of the fact that RedDog can’t be moved to a jurisdiction with a more favor-able tax structure, which would be anywhere else inAlaska.

While Teck officials say they have a strong legalargument, they do not want the courts to decide what isbest for Red Dog and the region.

“It is our hope that, rather than continue the legalprocess, the NAB will agree to come to the table andwork cooperatively to achieve a reasonable new agree-ment,” company officials wrote in a paper laying outtheir position.

Providing a bridgeNANA, which has strong business and personal ties

to both Teck and Northwest Arctic Borough, is doing itsbest to get both sides of this taxing issue back to thetable.

“We understand the perspectives of both parties, andwe believe we can help provide a bridge to reach a long-term, or interim, agreement. We want to come together,in the spirit of cooperation, and resolve this issuethrough structured mediation,” the Native corporationcommented when questioned about the tax hike.

NANA owns the Red Dog deposit and is 30 percentowner of the operation.

On the flipside, the Northwest Arctic Borough coversexactly the same area as the NANA region and the vastmajority of the some 8,000 residents of the region areNANA shareholders, as well as beneficiaries of any taxthe borough takes in.

Despite the overlapping interests, NANA says thefinancial benefits the mine already provides to the areaoutweighs by far the added revenue the borough hopes toget through the steep tax increase.

Since mining began, NANA has received roughlyUS$1.3 billion in net proceeds payments from Red Dog,of which it has distributed about US$820 million to otherregions and at-large shareholders via the 7(i) sharingprovisions of the Alaska Native Claims Settlement Act.Of the US$480 million that NANA has kept, someUS$221 million has been paid in dividends to sharehold-ers.

This is on top of the more than US$469 million inwages Red Dog has paid to NANA shareholders workingat the mine over the past 26 years, including the US$39.3million paid to 604 NANA shareholders that eitherworked full- or part-time at Red Dog in 2015.

“We are concerned about jobs. A reduced operatingbudget for the mine will mean fewer jobs for NANAshareholders,” the Native corporation said in a state-ment. l

l F I S C A L P O L I C Y

A taxing dilemma for Red DogNorthwest Arctic Borough levies steep tax hike that threatens longevity of world-class zinc mine; Teck pressures for negotiations

11NORTH OF 60 MINING

PETROLEUM NEWS • WEEK OF JANUARY 24, 2016

“This massive tax hike could not come at aworse time, as the mining industry is in themidst of the biggest downturn in decades.”

–Henri Letient, general manager, Red Dog Mine

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Over the past 26 years, the Red Dog Mine has been an economic generator in Northwest Alaska, providing revenue for NANA Corp., supporting the municipal government and providingjobs to many of the residents of this remote region.

the possibility of a pre-emptive 404(c)veto of Pebble. While it is unclearwhether or not EPA’s highest office wasconsidering this plan separately fromwhat was going on in Alaska, this briefingcomes several months prior to requests

for such actions by Bristol Bay Nativegroups, which EPA said was its impetusto consider using the unprecedentedmethod of stopping a project ahead ofpermitting.

The stage is setThe EPA Inspector General Office’s

findings are in sharp contrast to conclu-

sions to the recently completed investiga-tion by former U.S. Secretary of DefenseWilliam Cohen, who was hired by thePebble Partnership to complete a reviewof EPA’s actions surrounding the BristolBay Watershed.

Cohen said his investigation turned upevidence of questionable activities byEPA and urged federal watchdog groupssuch as the EPA Inspector General andU.S. House Oversight Committee toprobe further into EPA’s actions atPebble.

“After an analysis of thousands of doc-uments and discussions with more than60 stakeholders, I conclude that EPA’sactions were not fair to all stakeholders,”Cohen wrote in a 346-page report outlin-ing his findings. “The statements andactions of EPA personnel … raise seriousconcerns as to whether EPA orchestratedthe process to reach a pre-determined out-come.”

Collier was somewhat surprised at thelarge chasm between the thoroughness ofthe inspector general and Cohen reports,considering they were tasked to investi-gate the same topic and had access to thesame evidence.

“I think it is the single most embarrass-ing piece of work by an inspector generalthat I have seen in my 40 years of work-ing with inspector generals,” the PebbleCEO told Mining News.

The Pebble Partnership, however, wasnot caught off-guard by the findings.

“One of the reasons we initiated theCohen report is there was a great concernthat there might be a whitewash in theinspector general investigation,” Colliersaid.

The contrasting conclusions also hasset the stage for the continuation of a law-suit in which the Pebble Partnershipalleges EPA worked secretly with anti-Pebble groups in pursuit of the goal ofbanning or restricting development ofPebble prior to the permitting process.

“We are by no means through makingour case that EPA acted inappropriatelyand perhaps illegally with respect toAlaska’s Pebble project,” Collier said.“We will have the opportunity to deposeas many as 35 senior EPA officials, insid-ers and others in the environmental com-munity as part of our FACA discovery,

and we continue to gain new informationand fresh insights through the investiga-tive efforts of Congress.”

Supported by the growing piles ofemail conversations and other incriminat-ing evidence, Collier said he expects thetrial “questioning will be dramaticallymore intense than what the IG did.”

Depositions are expected to be sched-uled within the next month, setting up thenext stage of the trial.

Collier said the findings of the inspec-tor general report parallels the argumentsmade by EPA in the case, but this stanceis not enough for the agency to prevailconsidering the massive amount of evi-dence to contrary.

Federal Judge H. Russel Holland, whois presiding over the case, has alreadyfound Pebble’s allegations credibleenough to issue a preliminary injunctionordering the regulator to halt efforts to useSection 404 (c) of the federal Clean WaterAct to pre-emptively block or restrictPebble permits.

A number of U.S. Congressional com-mittees – including House Science, Spaceand Technology and House Oversight andGovernment Reform – have been criticalof EPA’s attempt to use the 404(c) processto pre-emptively restrict the Pebble mineproject.

Science, Space, and TechnologyCommittee Chairman Lamar Smith, R-Texas, said his committee will continueits probe into EPA’s actions

“The Inspector General’s report onEPA’s actions to block the Pebble Minedraws misleading conclusions withouthaving all the facts,” Lamar responded tothe report. “It also appears that the IGfailed to review a significant body of pub-lically available information brought tolight by the Science Committee thatdemonstrates clear instances of bias andpredetermination on the part of the EPA.”

Collier expects that the EPA InspectorGeneral Arthur Elkins, Jr. will be calledbefore these committees to testify on thequality and content of the report.

“This issue is just too important to beswept under the rug – not only for us andfor the State of Alaska, but for the integri-ty of objective, science-based decision-making in this country,” the Pebble CEOsaid. l

12NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF JANUARY 24, 2016

continued from page 9

PEBBLE REVIEW

Doris mine plan and to potentially addsignificant high-grade gold ounces to theDoris Mineral Resource base. A total of12,000 meters of underground diamonddrilling are budgeted for 2016, with6,000 meters focused on infill drillingand 6,000 meters focused on resourceexpansion. A planned 8,000 meters ofsurface drilling will be focused onresource expansion and exploration inthe southern portion of the Doris trend.

GJ resource updated; Spectrum estimate next

Skeena Resources Ltd. Jan. 14released an updated resource estimate forthe Donnelly and North Donnelly cop-per-gold deposits at its recently acquiredGJ property in the Golden Triangle ofnorthwestern British Columbia. TheDonnelly and North Donnelly depositsnow host 133.67 million metric tons ofmeasured and indicated resource, using a0.2 percent copper cut-off, grading 0.32percent (940.23 million pounds) copperand 0.36 grams per metric ton (1.56 mil-lion ounces) gold. In addition, 53.69 mil-lion metric tons of inferred resourcegrading 0.26 percent (312.53 million

lbs.) copper and 0.33 g/t (570,000 oz.)gold has been estimated for the deposits.Contained pounds of copper and ouncesof gold in the measured and indicatedcategories have increased by 12 percenteach, in comparison to the previous esti-mate calculated in 2007. Inferred poundsof copper and ounces of gold have

increased by 200 percent and 280 per-cent respectively. The Donnelly andNorth Donnelly zones are meters wide,1,600 meters long and an average of 200meters deep. Skeena says there is goodpotential for resource expansion to thewest and at depth on the Donnellydeposits. It is recommended that drill tar-

gets be selected following a detailedreview of available geological, geophysi-cal and geochemical data. The reportauthors also recommend resource model-ing the nearby GJ deposit which is notincluded in the current resource estimate,and completing a property-wide targetreview to evaluate exploration potentialof other porphyry and high-grade veinprospects. The GJ property, which wasacquired by Skeena in October, is locat-ed adjacent to the company’s Spectrumgold project where 17,350 meters ofdrilling in 61 holes was completed in2015. A resource estimated that willinclude that drilling is expected to bereleased by the end of the first quarter.Walter Coles, President and CEO ofSkeena commented, “The deposits at GJin conjunction with the Spectrumdeposit, all of which are open for expan-sion, form the foundation of a district-scale development project, located closeto electrical power and roads in a miningfriendly jurisdiction,” explained SkeenaPresident and CEO Walter Coles.“Although metal prices are not favorablefor development of the GJ property atthis current time, we view the deposits atGJ as an inexpensive long term calloption on copper and gold prices, withvery low holding costs.” l

continued from page 10

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TMAC Resources' Hope Bay gold mine project in Nunavut is on track to begin production thisyear. The plant is scheduled to process 1,000 metric tons of ore per day in 2017, much ofwhich will come from a high-grade stockpile averaging 15.2 grams of gold per metric ton.