Mining

Year in Review: Pebble saga nears end as Army Corps denies key permit

The Pebble project ended the year on life support after the Army Corps of Engineers handed down strict wetlands mitigation requirements the company was not able to meet. From the outside things appeared to be moving well for the company through midsummer; the Corps released the final Pebble environmental impact statement in July that largely concluded that the large open-pit mine plan and its extensive support infrastructure would not materially impact salmon returns or the region’s water-plentiful ecosystem. The final EIS backed the conclusions of the draft document published in 2019. Both of the documents were widely dismissed by Pebble opponents for lacking in-depth science and being rushed to fit permitting within the timeframe of the Trump administration. In late August, Corps Alaska District regulatory chief David Hobbie wrote a letter to Pebble Partnership leaders requiring mitigation within the Koktuli watershed for impacts to more than 3,000 acres of wetlands lakes and streams, among other mandates. And it needed to be done in 90 days. Sens. Dan Sullivan and Lisa Murkowski first issued statements saying they didn’t believe the project could be permitted after the mitigation requirements were released and hardened their stances against Pebble after tapes were released in September of Pebble Partnership CEO Tom Collier and Northern Dynasty CEO Ron Thiessen discussing project expansion and alleged friendly relationships with Alaska politicians with individuals posing as investors. Pebble, after several meetings with state officials, made the deadline with a package preserving 31,000 acres of aquatic resources and 112,000 acres of mostly state land in the watershed. However, Corps Alaska leaders denied the permit shortly before Thanksgiving on the grounds that Pebble “is contrary to the public interest.” Company leaders have said they will appeal the decision. Murkowski has discussed, in concept, the idea of transferring the state land in the Pebble area to federal control. 2. Ambler road advances The State of Alaska got the green light from the feds to build a 211-mile mine access road along the base of the Brooks Range in the Interior in July and Gov. Mike Dunleavy said he wants more funding for the project aimed at opening a new mining district. Bureau of Land Management Alaska officials signed a record of decision providing the State of Alaska right-of-way access across federal lands for the Ambler mining district access road July 23. The road would open the roughly 75-mile-long mineral belt along the southwest portion of the Brooks Range for development of its copper, zinc, cobalt and precious metals. The area has been explored for decades but its remote location far from the road system has precluded additional work. Local opposition to the Ambler project from villages such as Evansville and Bettles, near where the road would connect to the Dalton Highway, has focused on the belief the road and eventual mine traffic would disrupt the migration of caribou needed for subsistence harvests. Alaska Industrial Development and Export Authority officials leading the project are modeling their plan for an industrial toll road after the 52-mile haul road to the Red Dog zinc mine in Northwest Alaska that the authority financed in the late 1980s. The AIDEA board took $35 million from the authority’s large Revolving Fund to support development of the road in April. 3. Greens Creek, Fort Knox growing Two of Alaska’s largest hard rock mines took significant steps to grow their operations this year. Hecla Mining Co., owner of the the underground Greens Creek mine on Admiralty Island near Juneau, filed an amended plan of operations with the Forest Service Oct. 1 that calls for expanding the Greens Creek tailings disposal facility footprint by 14 acres, or about 20 percent, to store an additional 4 to 5 million cubic yards of tailings and waste rock produced at the mine. Hecla expects the current 66-acre facility will likely be filled by about 2031, at which point the mine would have to be closed, according to a company statement. The company’s plan for incremental expansion is the third such request by the Greens Creek operator in the past 20 years. Most recently Hecla proposed a 116-acre expansion to the mine’s tailings storage facilities in 2010; the Forest Service ultimately approved an 18-acre project in 2013. The owners of the Fort Knox gold mine also picked up a new gold deposit for $93 million down the Alaska Highway near Tok that will be processed at the Fairbanks mine. Kinross Gold Corp. said Sept. 30 that it had acquired a 70 percent interest in the Peak Gold project from Royal Gold and Contago ORE Inc. Kinross intends to develop the Peak Gold deposit into a short-lived open pit mine and truck the ore north to the Fort Knox mill for processing. The trip would involve hauling the crushed ore up the Alaska and Richardson highways, through Fairbanks and up the Steese Highway to the mine site near Chatanika. Scheduled to open in 2024, the Peak Gold mine is expected to produce roughly 1 million ounces of gold equivalent from grades of about 6 grams per ton over 4.5 years. Kinross estimates the $110 million project will have an all-in sustaining cost of approximately $750 per ounce.

Army Corps of Engineers denies Pebble permit

In the end, Pebble Limited Partnership will not be getting a key permit for its mine from the Trump administration. The Army Corps of Engineers Alaska District issued a record of decision Nov. 25 denying Pebble’s Clean Water Act wetlands fill permit application, which, barring an unlikely reversal on appeal, kills the current iteration of the Pebble mine plan.  The company’s late 2017 application for the key development permit spurred the multi-year environmental impact statement, or EIS, review that has since been the focal point of the fight over the massive and contentious mine plan. The Army Corps’ record of decision, or ROD, summarily states that the mine plan impacting more than 3,300 acres of wetlands and 185 miles of streams does not comply with Clean Water Act guidelines and “is contrary to the public interest.” Corps of Engineers Alaska District Commander Col. Damon Delarosa wrote at the end of the 29-page decision document that the Pebble mine plan is being denied because the project would result in “significant degradation of the aquatic ecosystem.” “I have concluded that the benefits of the proposed elimination and alteration of wetlands, streams and other waters within the (Army Corps) jurisdiction do not outweigh the detriments that would be caused by such eliminations and alterations, based upon the information contained in the FEIS, the extensive public comments received, and the analysis of the public interest review factors,” Delarosa wrote. “As those eliminations and alterations would be necessary to realize any benefits from the proposed project, I have found that the project is contrary to the public interest.” Delarosa took over as commander of the Alaska District this past August. Opponents of the mine naturally celebrated the Corps’ decision, generally stressing that the permit denial ultimately follows years of scientific conclusions about likely environmental impacts of the project and what a majority of Alaskans want in regards to Pebble. Bristol Bay Native Corp. CEO Jason Metrokin called the decision “a triumph for the people of Bristol Bay” in a formal statement. “While we are still reviewing the details of the decision, it is clear that Pebble is not in the best interests of Bristol Bay and those whose livelihoods depend on its incredible fishery,” Metrokin said. “We thank the Corps for acknowledging this reality in its decision. BBNC looks forward to working with stakeholders, both in-region and across Alaska, our congressional delegation and the federal government to ensure that wild salmon continue to thrive in Bristol Bay waters, bringing with them the immense cultural, subsistence and economic benefits that we all have enjoyed for so long.” Pebble’s opponents have routinely cited that the region’s large commercial sockeye fishery — currently one of the state’s few thriving commercial salmon fisheries —supports more than 14,000 jobs and generates more than $1.5 billion in economic activity. Sens. Dan Sullivan and Lisa Murkowski, both of whom formally opposed the project in late August when the Corps issued strict mitigation requirements for Pebble, said Corps officials came to the right conclusion on Pebble, despite their general support for Alaska’s mining industry. “This is the right decision, reached in the right way,” Murkowski said. “It should validate our trust and faith in the well-established permitting process used to advance resource development projects throughout Alaska. It will help ensure the continued protection of an irreplaceable resource — Bristol Bay’s world-class salmon fishery — and I hope it also marks the start of a more collaborative effort within the state to develop a sustainable vision for the region.” Murkowski previously said her preference was that the Corps deny the permit rather than the Environmental Protection Agency issuing a subsequent permit “veto” because of concerns she has about an EPA development prohibition stymieing other resource projects in the state. Murkowski has instead floated the concept of changing the status of the land Pebble wants to mine, which is state land designated for its mineral potential, but a spokeswoman for Murkowksi could not provide additional details on the senator’s ideas in time for this story. Sullivan said he will continue to advocate for other resource development projects in the state because of the jobs and economic opportunities they can provide. “However, given the nature of the Bristol Bay watershed and the fisheries and subsistence resources downstream, Pebble had to meet a high bar so that we do not trade one resource for another. As I have been saying since August, Pebble did not meet that bar and, accordingly, the Corps rightly denied the permit,” Sullivan said. Rep. Don Young did not applaud or criticize the decision in a statement from his office, but said he is disappointed in the fact that the permitting process allows the federal government to effectively kill a project proposed on state land. “Now there must be a consideration of how the federal government will compensate the state for the loss of economic potential (from the mine),” Young said. Pebble CEO John Shively said company representatives are obviously dismayed with the decision, particularly since the final EIS published in July indicated the project could co-exist with the fishery. “One of the real tragedies of this decision is the loss of economic opportunities for people living in the area. The EIS clearly describes those benefits, and now a politically driven decision has taken away the hope that many had for a better life.” Shively said in a statement.  The company is now focused on the next steps for the project, including an appeal of the decision, according to Shively. The company has 60 days to appeal the decision. Pebble’s Vancouver-based parent company Northern Dynasty Minerals Ltd. issued a statement Wednesday that is sharper yet in its criticism of the Corps’ conclusions. “Based on the positive findings of the final EIS, conclusions by the (Army Corps) that development of the Pebble project is ‘not in the public interest’ are wholly unsupported,” Northern Dynasty’s statement reads. “For the United States to turn its back on an opportunity to develop these minerals here at home in a manner that U.S. regulators have agreed is environmentally safe and responsible, and to do so for purely political reasons, is not just short-sighted; it’s self-destructive,” Northern Dynasty CEO Ron Thiessen said. Northern Dynasty stock traded at 80 cents per share on Nov. 24 prior to the permit denial and has since fallen to 34 cents per share during early trading Dec. 2. The final Pebble EIS published in late July largely concluded that the large open-pit mine plan and its extensive support infrastructure would not materially impact salmon returns or the region’s water-plentiful ecosystem.  The final EIS backed the conclusions of the draft document published in 2019. Both of the documents were widely dismissed by Pebble opponents for lacking in-depth science and being rushed to fit permitting within the timeframe of the Trump administration. Army Corps Alaska District spokesman John Budnik wrote via email that the decision “is based on all the facts at-hand, which includes information provided by the permit applicant and the public, and is in compliance with existing laws and regulations.” An appeal would be adjudicated by the commander of the Army Corps Pacific Ocean Division headquartered in Honolulu, according to Budnik. That position is currently held by Col. Kirk E. Gibbs. Multiple conservation groups active in the fight against Pebble contend the proposed mine is the first large oil and gas or mining project in Alaska to be outright denied by the Corps. Budnik wrote that no major infrastructure projects have been denied a Clean Water Act permit by the agency since current Regulatory Chief Dave Hobbie took the position in 2015 but it’s unclear what happened before then. Brian Litmans, legal director for the Anchorage-based nonprofit environmental law firm that has fought Pebble said in an interview that the group thought both versions of the Pebble EIS could’ve been more thorough but noted Corps officials could also consider other information such as public comments and the EPA’s 2014 Bristol Bay Watershed Assessment — which concluded most any large mine would have substantial negative impacts on the region’s ecosystem. The watershed assessment was the basis for the EPA’s decision in 2014 to propose a “preemptive veto” of a large mine in the project area under authority granted it by Section 404(c) of the Clean Water Act. It was also the focal point of a subsequent lawsuit in federal court by Pebble against the agency, in which the company argued EPA staffers improperly coordinated with mine opponents and kept Pebble from contributing to the 1,000-plus page document.  That lawsuit ended in a May 2017 settlement that prohibited the agency from revisiting a veto for four years or until the Army Corps finished an EIS for Pebble; however, it did not invalidate the watershed assessment, meaning the Corps could still use it in its evaluation of the potential impacts of the project. “If anyone looked at this project, it’s impossible not to see significant degradation,” Litmans said. He also noted that the ROD states Pebble’s plan to mitigate the wetlands damage the project would cause was found to be insufficient. “Ultimately the science is clear on this one,” Litmans said. Mitigation plan The ROD states that Pebble “proposed to preserve a 112,445-acre area in the Koktuli River watershed, including 31,026 acres of aquatic resources” as the primary part of it's mitigatoin plan — actions to offset the damage the mine and associated infrastructure would have on wetlands, lakes and streams in the area. Under requirements published by the Corps in an August letter to Pebble but made apparent to the company earlier based on state documents obtained through a public records request by SalmonState, an Alaska-based opponent of the project, Pebble needed to find ways to mitigate its environmental damage within the Koktuli drainage where the mine site would be located. The stringent mitigation requirements laid out by the Corps are in sharp contrast to Pebble’s original mitigation plan as well as Alaska-specific guidelines issued by the Trump administration in 2018. Those joint Corps-EPA  guidelines encouraged regulators in the state to be flexible in approving mitigation measures for development projects because more than half of the state is considered wetlands — a fact development proponents often note. According to the documents shared by SalmonState, Corps officials told Alaska Department of Natural Resources officials in an August meeting that “If the impacts will be mitigated through preservation the ratio would need to be 10:1 to 20:1,” which puts Pebble’s proposal at the low-end of what the agency wanted, and Corps officials believed the threshold could be met within the Koktuli drainage.  Officials in Gov. Mike Dunleavy’s administration have regularly been accused of coordinating with Pebble to advance the mine despite the governor’s insistence his administration is neutral on the project. DNR spokesman Dan Saddler wrote in response to early November questions from the Journal that state agency officials had “no expectation” as to how many acres of state land Pebble would propose preserving. DNR officials simply answered questions from Pebble about state laws and regulations applicable to the project. The Koktuli watershed is almost exclusively state land and, with virtually no development beyond Pebble’s exploration work, holds little opportunity for wetlands restoration. Saddler wrote in response to questions after the release of the ROD that Pebble’s plan to deal with federal mitigation requirements “is fully up to them, and does not define DNR’s expectations. We don’t deal with expectations, but with actual applications submitted to us for consideration under state law and regulation.” Elwood Brehmer can be reached at [email protected] Editor's note: This story has been updated with additional statements and information since the original story was posted on Nov. 25. A prior version of this story incorrectly stated the Army Corps had not published Pebble's mitigation plan. The agency inititally withheld it from the public when Pebble announced it had been submitted prior to the record of decision, but it was released shortly after the decision document was published Nov. 25.

Murkowski touts relationships to keep Alaska ‘at the table’ for energy policy

Alaska’s resource extraction industries will be best served by working with, not against, the incoming Biden administration through an emphasis on how the industries can support Democrats’ broader goals for sweeping energy reform nationwide, according to Sen. Lisa Murkowski. Alaska’s senior senator told viewers of the online Resource Development Council for Alaska annual fall conference Nov. 19 that she has had good working relationships with both President-elect Joe Biden and Vice President-elect Kamala Harris in the Senate and that keeping Alaska “at the table rather than on the menu” when it comes to natural resource and climate policies will require proactive engagement from the state’s resource industry leaders. “We have a good story to tell and it should be told,” Murkowski said while stressing that Alaska’s traditional mineral and renewable energy resources will be crucial for the national energy transition Biden and Harris campaigned on. “If the new administration is going to achieve its goals it’s going to need to partner with Alaska rather than treating us as some kind of snow globe sitting up on a shelf or one big, giant national park or one big wildlife refuge,” she continued. “Let’s show them that our minerals need to be a part of the solution; that our oil and gas industry can lead in carbon management and we can harness the power of our renewables and that a stronger Alaska economy means a stronger national economy.” Alaska mining proponents have long pointed to the plethora of prospects across the state for numerous metals and minerals needed in new energy technologies. Murkowski specifically pointed to the Graphite Creek prospect near Nome, which would be the country’s only domestic source of graphite — a primary component of lithium-ion batteries used in electric vehicles and elsewhere — if it were developed. Development of Alaska’s deposits of rare Earth elements, or REEs, most notably the Bokan Mountain prospect on Prince of Wales Island, is also seen by many as essential in-part for national security reasons as REEs are often used in defense technologies in addition to cell phones and other devices. China currently supplies most of the world’s graphite and REEs. Mining advocates have similarly emphasized that development of the state’s widespread copper resources will also be necessary to grow renewable energy production nationwide as copper wire is a main component of electric generators. Some of the leading backers of a national carbon tax-and-dividend — the climate change policy favored by many conservatives — contend Alaska’s largely conventional oil and gas production is less carbon intensive than most oil and gas operations elsewhere in the country. To that end, Murkowski noted that flaring of unwanted natural gas produced with oil is prohibited in the state. Additionally, wells tapping the state’s conventional oil and gas reservoirs produce at greater volumes for longer than the shale-focused fracked wells being drilled across the Lower 48, generally meaning fewer wells requiring less fuel to power drilling operations are needed in Alaska to produce more of the target resource. However, Murkowski also said she expects the next administration to pursue much more aggressive policies aimed at cutting carbon emissions and limiting new oil and gas development if Democrats take control of the Senate with wins in the Jan. 5 runoff elections for Georgia’s Senate seats currently held by Republicans. Such a scenario would give Democrats slight majorities in both chambers of Congress in addition to holding the White House. Democrat wins in both Georgia Senate races would split the chamber 50-50 between the parties with Harris serving as the tiebreaking vote if need be. Such a thin margin in the Senate could give Democrats the ability to reverse the rider to the 2017 tax bill that authorized oil and gas leasing in the Arctic National Wildlife Refuge coastal plain as budget-related bills requires a simple majority to pass the Senate; but it’s unclear how other standalone climate or environmental legislation could be passed without some level of Republican support or changes to Senate rules that currently require 60 votes to pass general legislation. “I don’t think we should be afraid of (the climate change) conversation, but we should be ready for it. I think we need to thoughtfully engage on ways to reduce our emissions while fighting the policies that just take it too far,” Murkowski said. Still, she said there will be a major speed bump for any legislation attacking mining — particularly coal mining — regardless of which party controls the Senate. That’s because the chair of the Energy and Natural Resources Committee either Wyoming Republican Sen. John Barrasso or West Virginia Democrat Joe Manchin, who come from the top two coal producing states in the country. Murkowski currently chairs the committee but her turn as the top Energy and Natural Resources Republican will end with the new Congress in January per caucus rules. She will remain on the committee as the second-ranking Republican. More immediately Murkowski said she still has hopes of passing the American Energy Innovation Act championed by her and Manchin in the three weeks Congress will be back working between Thanksgiving and Christmas. The Energy Innovation Act prioritizes new technologies to limit or capture and store carbon emissions from traditional energy sources; advancements in energy efficiency; small-scale nuclear development; and domestic mineral security among other provisions. If passed, it would be the first major energy reform legislation from Congress in more than a decade, according to Murkowski’s office. A prior version of the omnibus energy bill passed both the House and Senate in 2016 with strong bipartisan support but died in a conference committee shortly before Christmas that year. “If you want to look to a good template to begin to reduce your emissions look at our energy bill,” she said to conference viewers. On Pebble Murkowski acknowledged some in the audience of resource development backers likely aren’t keen on the stance she’s taken since August against the Pebble mine plan, but also countered that it’s the only Alaska resource project she has opposed. “I have reached the same conclusion that Ted Stevens did many years ago — that this is the wrong mine in the wrong place,” Murkowski said, adding that she would prefer the Army Corps of Engineers deny Pebble Limited Partnership’s application for a Clean Water Act wetlands fill permit instead of the Environmental Protection Agency issuing a post-permit Clean Water Act Section 404(c) “veto,” which she says would set a bad precedent for other potential resource projects in the state. A simple permit denial would allow PLP or another developer to reapply for project permits under a new plan. Murkowski said the way Pebble executives portrayed the permitting process in the secretly recorded “Pebble Tapes” released in September — in which then-Pebble CEO Tom Collier and Northern Dynasty Minerals CEO Ron Thiessen touted expansion plans and their personal relationships with regulators and Gov. Mike Dunleavy to individuals posing as prospective investors — damages the credibility of Alaska’s broader resource industries. “What we all saw play out in those awful Pebble Tapes was something that none of us should feel good or comfortable about,” she said. “If you have those who are attempting to sell a project through I believe not only fabrications and truly a dishonest appraisal of their own project, I think we should all be concerned. I don’t think that gives anybody’s development project in the state any help at all.” Elwood Brehmer can be reached at [email protected]

Corps receives, but doesn’t release, final Pebble mitigation plan

The Pebble Partnership submitted its final paper to the U.S. Army Corps of Engineers two days ahead of its Nov. 18 deadline, but the last key piece of the project that has garnered significant attention from the White House will be kept under wraps for the time being, according to Corps officials. Pebble’s final compensatory mitigation plan needs to offset the loss or degradation to nearly 3,300 acres of wetlands and 185 miles of streams, largely through direct “in-kind” compensatory mitigation measures to preserve areas within the remote Koktuli River watershed where the proposed mine sites, according to requirements the Corps of Engineers established in late August. The company was also required to deliver the plan within 90 days in a letter Corps Alaska Regulatory Division Chief David Hobbie sent to Pebble leaders Aug. 24. A spokesman confirmed via email that the Corps had received Pebble’s final mitigation plan and indicated it is currently under review and will be released when it is deemed compliant with applicable regulations, but when that will be is unclear. Questions regarding the authority under which the document would be withheld from the public were not answered in time for this story. Pebble spokesman Mike Heatwole said the company would wait for the Corps to release the mitigation plan. According to officials for the Alaska Department of Natural Resources officials, which manages state land, the agency also has not received a final copy of Pebble’s wetlands mitigation plan either. The compensatory mitigation plan is the last piece of Pebble’s plan the Corps needed before issuing a record of decision on the project — the key federal approval or denial. Ron Thiessen, CEO of Pebble’s parent company Vancouver-based Northern Dynasty Minerals Ltd. said the final Pebble environmental impact statement published by the Corps in July already concluded that the large open-pit copper and gold project can operate in-concert with the Bristol Bay ecosystem and meeting the mitigation requirements will provide further evidence that Pebble “can and will co-exist with commercial, subsistence and sport fisheries in Southwest Alaska.” “The ‘in-kind’ and ‘in-watershed’ requirement for mitigation the (Army Corps) established for Pebble clearly sets a high bar for offsetting project effects on wetlands and other aquatic features, but it’s a challenge we have embraced and believe we can achieve,” Thiessen said. With little development in the Koktuli drainage and large tracts of state land, traditional means of compensatory mitigation such as restoring damaged wetlands or preserving areas under the threat of development were largely viewed as very challenged by the Corps’ requirements by project observers. The Pebble deposit is also on state land. Former Pebble CEO Tom Collier said in response to the mitigation thresholds that the company would likely focus its mitigation plan on preserving an area several times larger than the aquatic areas impacted by the project. Collier abruptly resigned from Pebble in September following the release of a recorded videoconference by individuals posing as potential Chinese investors dubbed the “Pebble Tapes” in which Collier and Thiessen were recorded boasting about their relationships with state and federal officials and plans to greatly expand the mine . The stringent mitigation requirements laid out by the Corps were in sharp contrast to Pebble’s proposed mitigation plan and guidelines issued by the Trump administration in 2018 specifically for Alaska that emphasized flexibility in mitigation requirements for projects in the state given its relative abundance of wetlands. They also seem to contradict the final EIS, which generally maintained the conclusions in the draft EIS and states there would be “no measurable change” in the numbers of salmon returning to the Nushagak and Kvichak rivers or in the long-term health of the commercial fisheries in the region. The Koktuli River is in the upper reaches of the Nushagak watershed. Pebble’s initial compensatory mitigation plan released in January relied on a collection of smaller — and likely less costly — mitigation efforts outside of the Koktuli watershed. The company first planned to replace culverts in the Dillingham area to restore salmon access to about nine miles of spawning and rearing habitat; improve water treatment facilities at villages near the mine site; and periodically clean debris from seven miles of beach around the Cook Inlet port site. DNR spokesman Dan Saddler wrote that the Division of Mining, Land and Water staff met with Pebble representatives four times, the last time on Sept. 10, to discuss state law and processes regarding wetlands. DNR officials did not discuss Pebble’s plan after the Corps’ August letter, according to Saddler. “In the absence of any application for state permits, DNR has no role to play in Pebble’s current activity in support of federal permits,” Saddler wrote. DNR officials have no expectations as to what Pebble will propose to meet its mitigation requirements, according to Saddler. Meanwhile, Sen. Lisa Murkowski — who has stressed her opposition to the project since late August and has since indicated a desire to preserve additional parts of the Bristol Bay region — unveiled an Interior and Environment spending bill Nov. 10 that directly addresses Pebble as well. Murkowski chairs the Appropriations Subcommittee for the Interior and Environment. A committee bill report states the subcommittee continues to monitor Pebble’s EIS process and concurs with the assessment in the Corps’ Aug. 24 statement that the project cannot be permitted as it stands “and appreciates the administration’s commitment to a decision guided by sound science.” It further states that, “In the absence of a valid mitigation plan that has received all necessary approvals at the federal and state levels, the Committee urges the agencies to continue to withhold the applicant’s Clean Water Act permit.” Murkowski spokeswoman Karina Borger wrote in response to questions about the intent language that it indicates Pebble’s wetlands fill permit should not be granted and “that the Army Corps should proceed to a denial of the permit application should Pebble fail to produce a fully viable mitigation plan, including all necessary approvals at the federal and state levels, within the agency’s 90-day timeframe.” Murkowski would prefer the Army Corps deny the permit within the normal process to avoid needing an Environmental Protection Agency Clean Water Act Section 404(c) veto to stop Pebble because of the uncertainty it would bring for future projects, according to Borger. Sen. Dan Sullivan, who like Murkowski was sharply critical of the EPA’s proposed veto in 2014 before Pebble applied for a wetlands fill permit, has said he supports such an action if it’s necessary to stop Pebble. Elwood Brehmer can be reached at [email protected]

Senators toughen stances against Pebble project

After years of stressing process over policy, Alaska’s U.S. senators have both announced their opposition to development of the Pebble mine. Sen. Lisa Murkowski made her most definitive statement to-date against the massive Southwest Alaska mine plan Oct. 15 during an address to the Alaska Federation of Natives virtual annual convention, saying there is a need for new economic development in Southwest Alaska and that she plans on working to ensure “longer term protections for the region that can also provide enduring value for Alaskans” in the next Congress that will convene in January. “I simply think that this is the wrong mine in the wrong place. The administration has said that Pebble cannot be permitted as proposed, and I agree with that,” Murkowski said. “I plan to build on my appropriations language from last year to ensure that the Bristol Bay region remains protected. But while we may have stopped Pebble today, I think now is the time to start thinking about the future.” Jason Metrokin, CEO of Bristol Bay Native Corp., which has helped lead the opposition to the mine, thanked Murkowski and Sullivan for agreeing Pebble should be stopped. “BBNC has long-opposed Pebble because the science is clear on the mine’s potential impacts — it would pose a significant risk to our region’s world-class fisheries and our shareholders’ economic livelihoods and subsistence way of life,” Metrokin said in a formal statement. “By stopping this ill-conceived mine, we defend 14,000 sustainable commercial fishing jobs, protect subsistence, and preserve the world’s most prolific wild sockeye salmon runs. Pebble is and always has been the wrong mine in the wrong place. We look forward to continuing to work with our senators to protect Bristol Bay and secure its future.” Late last year Murkowski added language to the 2020 Interior Department budget bill noting concerns from other state and federal agencies that commented on the draft Pebble environmental impact statement and questioned the veracity of the review. Murkowski’s spokeswoman Karina Borger highlighted the Interior appropriations language in an email and wrote that “throughout the process, (Murkowski) has continually said the Pebble project must meet a high bar as adverse impacts to the Bristol Bay ecosystem and its world-class salmon fishery are unacceptable.” Borger could not provide further detail about the senator’s plan for the appropriations process, she wrote. The hard line against what would be one of the largest resource development projects in the state’s history follows mixed messages from the U.S. Army Corps of Engineers — the agency conducting the environmental review — about Pebble’s ability to coexist with the largely untouched ecosystem and currently salmon-dependent economy in the region and the Sept. 21 release of a seemingly damning undercover video that led to the resignation of then-Pebble Partnership CEO Tom Collier. In the lengthy video, Collier and Ron Thiessen, CEO of Pebble’s parent company Northern Dynasty Minerals Ltd., touted relationships with Gov. Mike Dunleavy and Corps of Engineers Alaska officials that they claimed would benefit mine development to Environmental Investigation Agency personnel posing as potential Pebble investors. The project leaders also claimed to already have plans to expand the mine beyond the proposal submitted to the corps, despite previous claims to the contrary. According to Pebble, its official 20-year mine plan would employ up to 2,000 workers during construction and 750-1,000 workers during operations. Corps Alaska District Regulatory Chief David Hobbie wrote to Pebble leaders Aug. 20 that the project would have to come up with a new wetlands mitigation plan to compensate for varying impacts to more than 3,200 acres of wetlands and 184 miles of streams across the mine site and the project’s extensive support infrastructure within 90 days. The strict mitigation requirements juxtaposed the Corps’ overarching conclusions in the final Pebble environmental impact statement issued in July, which largely states that developing the massive copper and gold deposit would result in “no measurable change” in the numbers of salmon returning to the Nushagak and Kvichak rivers or in the long-term health of the commercial fisheries in the region and was touted by Pebble Partnership upon its release. The senators both said in statements following the mitigation letter that the project should not be permitted as proposed. Sullivan has since been more emphatic about Pebble; he said during a live radio interview on Alaska Public Media that the Environmental Protection Agency should use its authority to stop the project if the corps issues a favorable record of decision, or ROD, for the project. The Pebble ROD could be issued at any time after the company submits its mitigation plan. Sullivan and Murkowski were extremely critical of the EPA under the Obama administration for proposing in 2014 to prohibit Pebble or other large mines in the area via its authority under Clean Water Act Section 404(c) to override wetlands permit decisions by the corps if the agency deems a project too environmentally damaging. That was before Pebble had submitted its permit application to the corps, which meant it was not even giving the company a chance to develop a viable plan, the senators and many resource development advocates said, dubbing the move a “preemptive veto” of Pebble. However, Pebble’s plan is not final yet. Interim Pebble CEO John Shively wrote in an emailed statement about the senators’ opposition to the mine that the company believes federal permitting should be a scientific and not a political process and the company remains focused on finalizing what it needs to provide the corps for the ROD. “The (Corps) asked for our final mitigation plan by Nov. 18 and we will meet that deadline. This is our near term focus,” Shively said. Resource Development Council for Alaska Executive Director Marleanna Hall wrote in an email that without a final mitigation plan or ROD there is nothing for the industry advocacy group to comment on. Rebecca Logan, CEO of the Alaska Support Industry Alliance, the trade association for mining and oil and gas industry contractors in the state noted in an email that the Alliance has maintained that the permitting process should be followed “no matter what.” “Because the mitigation plan is not yet final and there is no ROD yet — it is premature to say that the project shouldn’t be built. If we allow the process to be hijacked for one project — it will set a precedent that harms the future of responsible resource development for Alaska,” Logan wrote. She added that she understands and respects the senators’ decisions to publicly oppose Pebble but that doesn’t mean she agrees with them. “Sens. Sullivan and Murkowski have been the backbone for resource development in Alaska — and their leadership has allowed us to make great gains in the last four years towards developing our oil, gas and mineral resources,” Logan continued. “Both of them have been strong defenders of the support industry, Alliance members, noting that the Alaskan jobs that accompany resource development are the highest paying jobs in the state and make a significant impact on Alaska’s economy. They both have fought hard in D.C. to protect these Alaskans.” Elwood Brehmer can be reached at [email protected]

Greens Creek owner files request to reroute road for tailings expansion

The operator of the largest silver mine in the country is asking the U.S. Forest Service to approve a tailings storage expansion plan that would allow the mine to produce into the 2030s. Hecla Mining Co., which owns the underground Greens Creek mine on Admiralty Island near Juneau, filed an amended plan of operations with the Forest Service Oct. 1 that calls for expanding the Greens Creek tailings disposal facility footprint by 14 acres, or about 20 percent, to store an additional 4 to 5 million cubic yards of tailings and waste rock produced at the mine. Hecla expects the current 66-acre facility will likely be filled by about 2031, at which point the mine would have to be closed, according to a company statement. The tailings facility expansion would not push the mine’s growing tailings stack further into Admiralty Island National Monument, but the plan does call for disturbing an additional two acres within the monument to relocate a portion of the road between the Greens Creek mill and tailings facilities. Greens Creek General Manager Brian Erickson said Hecla leaders believe the plan maximizes the area available for tailings storage while minimizing newly disturbed areas in a formal statement. “This amendment culminates years of careful planning to develop a plan that minimizes impacts on Admiralty Island National Monument and the fish-bearing sections of (nearby) Tributary Creek,” Erickson said. Mining within the monument was authorized by Congress in the 1980 Alaska National Interest Lands Conservation Act, which established or grew many of the federally protected areas in the state but also carved out exceptions for resource projects in several parts of Alaska that otherwise would be off-limits to development. Greens Creek facilities bisect the monument boundary between the Admiralty Island Monument and more open-access lands of the Tongass National Forest. The mine’s infrastructure, which includes a port and access road, is largely along the western coast in the northwest portion of the island. Hecla employs the dry-stack tailings process at Greens Creek, which eliminates the need for a tailings dam as well as this risk of a release of tailings water or slurry. The company’s plan for incremental expansion is the third such request by the Greens Creek operator in the past 20 years. Most recently Hecla proposed a 116-acre expansion to the mine’s tailings storage facilities in 2010; the Forest Service ultimately approved an 18-acre project in 2013. Hecla Greens Creek spokesman Mike Satre wrote via email that the Forest Service’s 2013 decision for a smaller expansion has helped support existing operations but prohibited the company from expanding the mine’s footprint within the monument. “After analyzing the record of decision and re-evaluating our design basis, we realized that there was an option to extend the facility to the north in non-monument Forest Service land that would give us sufficient space,” Satre wrote. Hecla has not disclosed a cost estimate for the proposal, according to Satre. The Forest Service opened a scoping comment period on Oct. 9 for the environmental impact statement — a supplement to the 2013 review — will likely be needed based on the size of the proposal. The 45-day comment period closes Nov. 23. The plan calls for decommissioning one of the existing water management ponds and subsequent modifications to other ponds or construction of a new pond in the first stage of the project, which would include storage for roughly 1.9 million cubic yards of tailings and waste rock. The second stage of the project entails re-routing a portion of the access road through the monument, a new transmission line and substation and a water collection system at Cannery Creek. The combined phases of development would add approximately 4.6 million cubic yards of storage capacity to the tailings facility, according to the plan documents. Idaho-based Hecla on Oct. 8 reported producing 2.6 million ounces of silver at Greens Creek in the third quarter; the mine has produced roughly 8.2 million ounces of silver so far this year and is expected to break the 10 million-ounce mark for annual production this year. Greens Creek also produced 38,000 ounces of gold in the first nine months of the year. Hecla acquired 100 percent of Greens Creek in 2008 and has since increased silver production from the 6 million ounces per year range to the upwards of 10 million ounces expected from the mine this year. The remote mine employs approximately 440 people and produces about 2,350 tons of ore per day, according to the amended plan. Elwood Brehmer can be reached at [email protected]

‘Pebble tapes’ send project leaders into damage control mode

The Pebble Limited Partnership is trying to patch its battered image after secretly recorded videos last month caught its two top executives boasting about their influence over Alaska politicians and regulators. The controversial Pebble mine proposal faces new challenges after Alaska’s U.S. senators, the governor and the U.S. Army Corps of Engineers denounced the statements as false. But despite the blowback from the videos’ Sept. 21 release, the developer of the copper and gold prospect in Southwest Alaska continues its effort to win a key construction permit from the Corps. “The idea that Pebble is dead, no matter whose opinion it is, is just not accurate,” said Mark Hamilton, vice president of public affairs at Pebble Limited Partnership. “(Pebble) can go forward and it is going forward as we speak.” Amid the fallout: • Pebble’s chief executive, Tom Collier, resigned after he and Ron Thiessen, president of Pebble parent company Northern Dynasty Minerals, were recorded talking freely on the tapes. Thiessen has not resigned, a Pebble official said Oct. 5. • Democratic members of Congress have raised the possibility of investigations into what they say are discrepancies between the executives’ statements in the tapes and comments that Collier made before a House subcommittee. • Alaska Republican U.S. Sen. Dan Sullivan came out solidly against the project. Sullivan’s challenger in this year’s election, Democratic-nominated independent Al Gross, is using the leaked tapes in campaign ads against Sullivan. • Alaska’s speaker of the House has asked Gov. Mike Dunleavy not to support a mitigation plan Pebble needs to win the Corps permit. • House Minority Leader Lance Pruitt, R-Anchorage, said he would donate the $500 he received from Collier to charity. The group opposing Ballot Measure 2 said it would return Collier’s $2,500 donation. It retained donations from some current Pebble employees. Pebble opposition groups remain wary Collier’s resignation does nothing to eliminate the questions raised in the videotaped conversations about the credibility of the permitting process, said Nelli Williams, Alaska director of Trout Unlimited. “A full investigation by Congress is absolutely necessary — Alaskans and Americans deserve to know the truth,” she said in a prepared statement. If built, Pebble would be located about 200 miles southwest of Anchorage, near headwaters of the Bristol Bay salmon fishery. Pebble would like to secure a Corps permit soon, before entering a three-year permitting phase with the state. John Shively, Pebble’s interim CEO replacing Collier, released a statement Oct. 1 trying to distance the company from the statements made on the tapes. He reminded readers that Northern Dynasty has given an unconditional apology to Alaskans, while he personally apologized to Alaskans and Pebble staff. “The people working on the project, from our site staff to our corporate staff, have the utmost integrity — and I know all of them felt betrayed by what they saw expressed on those tapes,” Shively said. “Much of the content was boastful, embellished, insensitive and stretched credulity to its breaking point.” In the videos, secretly organized by an environmental group, Collier and Thiessen spoke with people hired to pose as potential Pebble investors from Hong Kong. Collier and Thiessen said in the recordings Alaska Republican U.S. Sens. Lisa Murkowski and Sullivan were just being political when they said in August that Pebble has not met the high bar for environmentally safe development and should not be permitted. They described friendly relations with Corps officials. They said they could call up Dunleavy, and he’d reach the White House on their behalf, whenever they want. The leaked conversations add to the uncertainty the mine faces, said Bob Loeffler, previously the director of Alaska’s Division of Mining, Land and Water under former Alaska Govs. Tony Knowles and Frank Murkowski. “It can’t be good for a project when so many politicians are going against it,” he said. The mine has lost its major mining partners over the years, including Anglo American in 2013. Pebble and Northern Dynasty, a small mining company from Canada, need investors to help cover enormous development costs. Finding an investor could be even harder now, said Bruce Switzer, former director of environmental affairs for Cominco, now Teck, in the early 1990s when the mining company owned the Pebble deposit. Teck Cominco left the project in 2005 because it’s not economically viable, despite what Pebble claims about the mine’s enormous value, Switzer asserted. Switzer is also a former mining consultant who advised Pebble opponents after he left Cominco. The leaked conversations underscore that Pebble is a politically motivated project, rather than one that can stand on its own financial merits, Switzer said. If Pebble is the world-class deposit the company touts, “why would you have these two promoters essentially lying” about the project’s relationships with politicians, said Switzer. Federal lawmakers raise specter of investigations After the tapes were leaked, Alaska’s U.S. senators have taken pains to emphasize their opposition to the project receiving a permit. Sullivan, facing pressure from challenger Gross, came out forcefully against the mine on Twitter, saying “No Pebble Mine.” Lisa Murkowski, who described herself as “absolutely, spitting furious” in reaction to the tapes, retweeted Sullivan’s message with three heart emoji for support. Sullivan later said in an interview with Alaska Public Media that he would not support the project even if it presented a satisfactory mitigation plan. Hamilton, with Pebble, said officials with any project in Alaska would like to have the vocal support of the state’s U.S. senators. But it’s the Corps that will decide whether to award a permit or not. “Everyone who was insulted by that display (in the videos) appropriately does not hold us in the highest regard,” Hamilton said. “But these are professionals at the Corps ultimately, and the Corps will do what the regulations tell them to do.” Other federal lawmakers are raising the specter of possible probes into Collier’s written testimony to a subcommittee of the House Committee on Transportation and Infrastructure in 2019, when he said, “Pebble has no current plans, in this application or in any other way, for expansion.” But while Pebble has submitted a 20-year plan to the Corps, Thiessen said in the video that the mine could potentially produce minerals for 200 years. He said expansion beyond 20 years will be unstoppable once development begins. Collier said “we,” presumably Pebble, will at some point request a mine expansion. As he had before, he said that will require a new state and federal permitting process. Longtime Pebble opponent U.S. Sen. Maria Cantwell, D-Wash., called for a Department of Justice investigation into the comments. U.S. Rep. Peter DeFazio, R-Oregon, chair of the House transportation committee, said Collier may have misled Congress in 2019. His investigative staff are reviewing the comments, he said in a recent statement. Thiessen and Collier did not say in the videos that Pebble has a “defined” plan for expansion beyond the 20-year proposal, according to a statement from Northern Dynasty last month. “What we have said consistently, and is reinforced in the ‘Pebble tapes’ released this week,” is there is no current “formal” plan for expansion, Northern Dynasty said. Pebble still aims to win the permit — and change minds The U.S. Army, the Corps’ parent agency, said in August that the project can’t be permitted as currently proposed. The land-use protection plan that Pebble is pursuing, showing how Pebble will compensate for damage to wetlands, will satisfy regulators and many critics of the mine, Hamilton said. “I expect that compliance (for the project) will switch the opinion of many individuals who have been insulted,” Hamilton said. It appears that the so-called compensatory mitigation plan will need to use state land, requiring state support, according to a letter to the governor last week from Alaska House Speaker Bryce Edgmon, an independent from Dillingham, and Rep. Louise Stutes, a Republican from Kodiak. The lawmakers asked Dunleavy in the letter to not support Pebble’s mitigation plan. Edgmon, in an interview, said the leaked videos raise serious doubts about the objectivity of the permitting process at both the state and federal level. Both the Dunleavy administration and the Corps have said they are committed to a fair and vigorous review process. In a three-page reply letter on Oct. 6, Dunleavy defended the economic argument for Pebble construction, though he does not expressly state support for it. As he has before, the governor did not express support for the mine, but said he does support a fair review process. “No serious person would disagree that accessing the mineral deposits within the Bristol Bay Mining District, if done in a way that protects the watershed, would transform the lives of Alaskans living in the region,” he wrote. “My role is to ensure that each project is subject to a fair and rigorous review process, and that every opportunity to create thousands of jobs is fully explored.” In the videos, Collier said Pebble plans to set aside state land for a preserve. He said the state has supported Pebble “behind the scenes.” Collier also said he recently met with the governor “to get his commitment that they would be there” to support the project. The governor’s office rejected that statement on Oct. 2. “The governor has not committed to any proposal, including a draft mitigation plan,” said Jeff Turner, a spokesman for the governor, in a statement. “As far as Mr. Collier goes, both Pebble and Northern Dynasty have said he embellished his statements.” Hamilton said Pebble has survived other challenges, including a threat by the Environmental Protection Agency during the Obama administration that essentially halted the mine’s progress in 2014. Those earlier challenges were based on what Hamilton calls a false narrative that the mine would destroy the Bristol Bay salmon fishery. That message has been more harmful to the mine over the years than the tapes, he said. Hamilton said the Corps has determined that the mine and the fishery can safely coexist, though conservation and fishing groups counter that the Corps’ determination is flawed. The opponents add that the Corps found that damage from the mine would be extensive, including permanent destruction of more than 100 miles of streams. The debate over the mine’s potential impacts to the Bristol Bay salmon fishery remains Pebble’s toughest challenge, Hamilton said. “The idea that someone acted out and insulted people is not trivial,” Hamilton said of the videos. “But it’s not the heavily advertised narrative of fear that has had people concerned about the actual workings of this mine.” “It’s bad, but this is not like the constant screaming that a mine will kill all the salmon,” he said. “That has been a powerful message of our opponents, but they are wrong.”

Kinross adds Tok-area gold deposit to portfolio for $93.7M

The operator of the Fort Knox gold mine north of Fairbanks paid $93.7 million for a majority stake in a gold deposit south of Tok, roughly 250 miles away. Kinross Gold Corp. announced Sept. 30 that it has acquired a 70 percent interest in the Peak Gold project from Royal Gold and Contago ORE Inc. Kinross intends to develop the Peak Gold deposit into a short-lived open pit mine and truck the ore north to the Fort Knox mill for processing. The trip would involve hauling the crushed ore up the Alaska and Richardson highways, through Fairbanks and up the Steese Highway to the mine site near Chatanika. Scheduled to open in 2024, the Peak Gold mine is expected to produce roughly 1 million ounces of gold equivalent from grades of about 6 grams per ton over 4.5 years. Kinross estimates the $110 million project will have an all-in sustaining cost of approximately $750 per ounce. Paul Rollinson, CEO of Toronto-based Kinross, said in a company statement that it is a high-margin project at current gold prices. “The relatively high-grade, low-cost Peak Gold project is an excellent addition to our portfolio, as it allows us to leverage our existing mill and infrastructure at Fort Knox and strengthens our medium-term production and cash flow profile,” Rollinson said. The project would add roughly 220,000 ounces of gold equivalent production to Fort Knox, more than double the mine’s production from 2019 of just more than 200,000 gold equivalent ounces, according to Kinross, which expects blending the ores will cut the mine’s all-in sustaining costs by about $70 per equivalent ounce. In the deal, Kinross sent $49.2 million to Royal Gold for its 40 percent stake in the project and $44.5 million in cash and Contago ORE shares purchased from Royal Gold to a Contago subsidiary. Contago, which previously held a 60 percent stake in the project, will retain a 30 percent interest in Peak Gold. Royal Gold CEO Bill Heissenbuttel said the deal allows the company to focus on its core royalty and streaming business. Kinross said it expects to conduct initial permitting and drilling for the open-pit mine concurrently and hopes to complete permitting and feasibility reviews by the end of 2022 before a year of construction. The company will charge Contago a management fee and mill toll to process its 30 percent of the ore mined from the project. Kinross plans to rename the project after consulting with leaders of the nearby Native Village of Tetlin, according to the statement. Tetlin Chief Michael Sam said in a statement issued by Kinross that he is pleased to see the company investing in the project. “We look forward to the safe and responsible development of the project and the positive benefits it is expected to generate for our community,” Sam said. The 675,000-acre Peak Gold property also holds other exploration targets that could extend the life of the project, according to Kinross. A 2018 preliminary economic assessment of the project estimated measured and indicated resources of about 1.2 million ounces of gold equivalent at a grade of 4.1 grams per ton and inferred resources of about 116,000 ounces of gold at an average grade of 2.7 grams per ton. Elwood Brehmer can be reached at [email protected]

Pebble CEO Collier resigns after release of tapes

Pebble Limited Partnership CEO Tom Collier resigned on Wednesday after an environmental group released secretly recorded videos of Collier and Ron Thiessen, president of Pebble parent company Northern Dynasty Minerals, discussing their connections and influence with Alaska politicians and regulators. Northern Dynasty also issued an apology to “all Alaskans," according to a statement released by the company. Northern Dynasty’s senior management and board of directors accepted Collier’s resignation, the statement said. “Collier’s comments embellished both his and the Pebble Partnership’s relationships with elected officials and federal representatives in Alaska," the statement from Northern Dynasty said. The embellishments involved Gov. Mike Dunleavy, Sens. Lisa Murkowski and Dan Sullivan and senior representatives of the U.S. Army Corps of Engineers, among others, Northern Dynasty said. “The comments were clearly offensive to these and other political, business and community leaders in the state and for this, Northern Dynasty unreservedly apologizes to all Alaskans,” the statement said. Reached Wednesday, Collier declined to comment and said he would no longer speak with news media. The Environmental Investigation Agency, an environmental group, hired individuals in August and September to pose as potential investors in the project, in online video meetings with the Pebble executives. The group released the videos on Monday. In response, Dunleavy, Murkowski and Sullivan strongly denounced the statements by Collier and Thiessen as false and embellished. The Army Corps also issued a statement on Tuesday, noting that the executives had presented inaccuracies and falsehoods, including about the permitting process. The actors for the environmental group posed as representatives of a Hong Kong-based investment firm with links to a state-owned entity in China, Northern Dynasty said. “The unethical manner in which these tapes were acquired does not excuse the comments that were made, or the crass way they were expressed,” Thiessen said in the statement. “On behalf of the company and our employees, I offer my unreserved apology to all those who were hurt or offended, and all Alaskans.” Among other statements, Collier described Murkowski and Sullivan as merely making political points when they said in August that the Corps can’t permit the mine, statements the senators denied. Collier also described his close access to the governor’s office, and said he counted Dunleavy as a friend, prompting the governor’s office to broadly reject the statements made in the videos. Former Pebble Partnership CEO John Shively will serve as Pebble’s interim CEO while the company seeks a new leader, the statement said. The proposed copper and gold project would be built about 200 miles southwest of Anchorage, near headwaters of the valuable Bristol Bay salmon fishery. Critics say it will hurt the commercial fishing industry and subsistence fishermen there. The Army Corps of Engineers is in the final stages of determining whether to issue a permit for the project that could lead to its construction. A final decision could be issued soon. President Donald Trump recently tweeted about the project, saying there would be “NO POLITICS” in the permitting decision. The Alaska Miners Association on Wednesday also condemned Collier’s comments. “Mr. Collier’s comments were clearly inappropriate and we appreciate Northern Dynasty for swiftly handling this issue," said Deantha Skibinski, the group’s executive director. "Our mining operations and projects have a superb track record of meeting the high standards set forth in the regulatory process, and we do so with a commitment to safety and environmental protection.” Shively, the state’s former Natural Resources commissioner under Democratic Gov. Tony Knowles, served as Pebble’s chief executive until 2014, when Collier took his place. Collier, a former chief of staff to Interior Secretary Bruce Babbitt, led the Pebble project through tumultuous years, including a move by the Obama administration that essentially halted the project in 2014, followed by progress under the Trump administration. Collier was scheduled to receive about $4 million from Pebble if the Corps issued a permit decision favoring the mine, and roughly another $8 million if the project survives litigation, he has said. It was unclear on Wednesday what would become of that possible bonus. “We don’t comment on personnel or contract matters related to current or former employees,” said Sean Magee, a spokesman with Northern Dynasty Minerals. Thiessen remained in job on Wednesday, the company said. Major questions loom for the project, including how Pebble will meet steep requirements set by the Corps to compensate for the environmental damage the project will cause. The United Tribes of Bristol Bay, representing 15 tribes opposed to the mine, said Collier should not be the “scapegoat” for the project, according to Alannah Hurley, the group’s director. “His resignation does nothing to address the deep-seated flaws and issues with the Pebble mine’s rigged permitting processes and political influence,” Hurley said. Thiessen, like Collier, also made statements in the videos that drew strong rebukes from Alaska leaders. Thiessen says in the videos that the company can get Dunleavy to call White House chief of staff of Mark Meadows about the project. That statement and others by the Pebble executives are not true, Dunleavy’s office said. Thiessen said Pebble is trying to work with Sullivan so the senator doesn’t say anything that could harm Pebble’s effort to receive the permit from the Corps. Sullivan’s office on Tuesday called that “yet another fabrication.” Sullivan and Murkowski have both said the mine does not meet environmental regulatory standards. They have said a record of decision supporting a permit, or a ROD, should not be issued. Robin Samuelsen, an adviser for Commercial Fishermen for Bristol Bay, representing fishermen opposed to the project, said in a statement on Wednesday he often got hit with a rod as a kid, on his behind. “And that’s what I’m asking Senator Sullivan and Senator Murkowski to do,” he said. “Take out the rod, it’s time to spank 'em. They’ve lied to you, they’ve lied to us out in Bristol Bay, they’ve lied to Alaska and they’ve lied to the world.” Shively, recently the board chair for Pebble Mines Corp., general partner for Pebble Partnership, said in the statement on Wednesday that the project is too important not to be built. “My priority is to advance our current plan through the regulatory process so we can prove to the state’s political leaders, regulatory officials and all Alaskans that we can meet the very high environmental standards expected of us,” he said.

Trilogy: Copper prospect still profitable at higher costs

Costs have grown but expectations remain high for what developers hope will be the first in a series of hard rock mines in Interior Alaska. The Arctic copper, zinc and precious metals prospect has a post-tax net present value, or NPV, of approximately $1.3 billion at current metal prices and a value of more than $1.1 billion based on longer-term price forecasts, according to a feasibility study conducted by Trilogy Metals Inc., which owns claims to the deposit. The study also concluded that the project would have a post-tax payback period of 2.6 years and a final investor return rate of about 27 percent. Those figures are despite the fact that the total expected capital cost for the remote mine has increased 34 percent to more than $1.2 billion largely due to findings that the project will likely have to treat a lot more water than was once thought. A 5 percent increase in dilution, or mined waste rock, also slightly lowered the grade of the copper, zinc, gold, silver and lead reserves in the project. However, with 2.1 billion pounds of probable copper reserves averaging more than 2.2 percent, Arctic is still one of the highest-grade copper prospects going, according to Trilogy leaders. A pre-feasibility study published in February 2018 pegged Arctic’s all-in capital cost at $910 million. “Overall, we’re very happy with the results of this feasibility study considering the capital increases that we’ve seen in the project and factoring in that there’s no new resources that have been included as part of this project,” CEO Tony Giardini said in a call with investors. Located in the middle of the Ambler mining district on the southern edge of the Brooks Range, the Arctic mine project is the most advanced prospect of more than a dozen in the roughly 75-mile long district. It also would likely be the first mine serviced by the state-sponsored Ambler access road, which has drawn the ire of many area residents and conservation groups. Giardini also said the company has identified opportunities to extend the open pit mine beyond its current 12-year life — as part of the current prospect and processing other deposits through the Arctic facilities — that need to be studied further. Bob Jacko, the operations director for Vancouver-based Trilogy said a roughly 30 percent increase in annual precipitation at the mine site in recent years will require larger sewage and water treatment systems than previously thought, adding to the capital and operating expenses of the project. The new water will also necessitate a more robust tailings dam; the initial tailings infrastructure cost has gone from $30.3 million in the 2018 study to $69 million currently. “It gets us in every area of the operation,” Jacko said of the additional water, noting the need to treat larger quantities adds to closure costs. Giardini said the increased capital costs are the primary driver in a reduction of cash flow — from $4.5 billion pre-tax in 2018 to $3.7 billion today. While Arctic was initially explored by Trilogy, a junior mining firm, Australian-based South32 bought into the project late last year and the company’s have since formed Ambler Metals LLC, the operating company for the advanced Arctic and nearby Bornite multi-metal prospects. Trilogy and South32 each hold 50 percent of Ambler Metals. Even with Arctic’s positive — if slightly tempered — financial indicators, a decision to ultimately build the mine will depend primarily on how quickly the Alaska Industrial Development and Export Authority can progress development of the Ambler access road, Giardini said. Trilogy leaders have long said the 211-mile industrial-use road is a prerequisite to constructing any mine in the remote mineral belt. The toll road concept is modeled after the DeLong Mountain Transportation System owned by AIDEA that feeds the Red Dog zinc mine in Northwest Alaska. Ambler Metals signed a memorandum of understanding with the state development bank in June in which the company agreed to fund half of the stakeholder outreach and pre-development engineering and study costs up to $35 million. Estimated in 2017 to cost between $280 million and $380 million for basic gravel construction, the road’s final environmental impact statement, or EIS, conducted by the Bureau for Land Management, now pegs the total construction cost at approximately $520 million. BLM issued a record of decision approving the project July 23. Trilogy Chief Financial Officer Elaine Sanders said there is no firm toll agreement with AIDEA for use of the road, but Trilogy factored a toll of $8.04 per metric ton of material hauled, up from $4.70 per ton in the pre-feasibility study, which reflects the change in the expected cost of the road. Overall, Trilogy expects the project would pay roughly $20 million per year in road tolls plus another $2.50 per ton in maintenance fees, according to Sanders. “We all know we’re going to be paying some type of toll,” she said. Local governments for villages near the road’s planned intersection with the Dalton Highway have formally opposed the road over concerns it will impact migrating caribou and could eventually be opened to the public — thus increasing hunting and recreational pressure — in areas relied upon for subsistence harvests. Critics have also questioned the economics of the toll road concept given the Arctic prospect is the only one in the region anywhere close to development-ready. AIDEA spokesman Karsten Rodvik wrote via email that authority and Ambler Metals officials are in continued discussions about funding the next phases of the road. “Based on preliminary estimates, and assuming a negotiated minimum annual assessment with Ambler Metals similar to the DeLong Mountain Transportation System, one mine could be sufficient to finance the toll road structure, Rodvik wrote. “Given the established access, AIDEA anticipates that over time, other mines within the district will be developed and opened, paying fees to use the road.” Giardini said a decision to break ground at Arctic would likely come shortly after what is expected to be a roughly three-year development period for the road, putting early work at the mine in the 2024-26 timeframe. Elwood Brehmer can be reached at [email protected]

New Corps requirements may signal end for Pebble

The U.S. Army Corps of Engineers gave the Pebble Partnership a very steep final hill to climb to reach federal approval for its mine plan with a short letter establishing strict requirements to offset the project’s impacts to area watersheds. Corps Alaska District Regulatory Chief David Hobbie wrote in a two-page letter on Monday to Pebble Permitting Vice President James Fueg that district officials have determined the copper and gold project, as proposed, would “cause unavoidable adverse impacts to aquatic resources” resulting in significant degradation of those resources. “Therefore, the District has determined that in-kind compensatory mitigation within the Koktuli River Watershed will be required to compensate for all direct and indirect impacts caused by discharges into aquatic resources at the mine site,” Hobbie’s letter states. He wrote additionally that compensatory mitigation will also be required for direct and indirect impacts from the project’s transportation corridor that includes a port on West Cook Inlet. The stringent requirements laid out by Hobbie are in such sharp contrast to Pebble’s proposed mitigation plan and guidelines issued by the Trump administration in 2018 that both mine opponents and traditional resource development advocates reacted to as if the project is ostensibly dead. Under the requirements, Pebble must compensate for impacts to 2,825 acres of wetlands, 132 acres of open water and 129 miles of streams at the mine site, as well as 460 acres of wetlands, 231 acres of open water and 55 miles of streams impacted by the port and 82-mile access road. The company also must submit the new mitigation plan within 90 days. The Koktuli River drains approximately 290,000 acres and contains more than 36,000 acres of wetlands in its headwaters, according to the final environmental impact statement for the project. Sen. Dan Sullivan, an emphatic critic of the Obama administration’s attempt to preemptively “veto” the mine in 2014 via the Environmental Protection Agency’s Clean Water Act Section 404(c) authority, said in a prepared statement that he has always advocated for a “science-based review” of Pebble “that does not trade one resource for another,” and that is what has happened. The Army Corps of Engineers administers Clean Water Act Section 404 wetlands permits nationwide but the EPA has final say over whether a wetlands fill permit is issued. “I have been clear that given the important aquatic system and world-class fishery resource at stake, Pebble, like all resource development projects in Alaska, has to pass a high bar — a bar that the Trump administration has determined Pebble has not met,” Sullivan said. “I support this conclusion — based on the best available science and a rigorous, fair process — that a federal permit cannot be issued.” Sen. Lisa Murkowski said she supports the decision and agrees that “a permit should not be issued.” “After years of extensive process and scientific study, federal officials have determined the Pebble project, as proposed, does not meet the high bar for large-scale development in Bristol Bay,” she said. Sullivan’s challenger in the November election, independent Senate candidate Al Gross opposes the Pebble project. Corps officials released the final Pebble EIS July 24. A record of decision on the EIS and Pebble’s Clean Water Act wetlands fill permit could be issued 30 days after the EIS was published in the Federal Register. The voluminous final EIS generally maintained the conclusions in the draft EIS and states there would be “no measurable change” in the numbers of salmon returning to the Nushagak and Kvichak rivers or in the long-term health of the commercial fisheries in the region. The Koktuli River is in the upper reaches of the Nushugak watershed. Murkowski and Sullivan previously expressed concern that the Corps’ EIS did not sufficiently analyze the full range of potential impacts of the mine, particularly following highly critical comments from federal and state resource agencies about the scope of the review. Bristol Bay Native Corp. CEO Jason Metrokin said in an interview that while the mitigation requirements aren’t an official death knell for the project, he was happy to learn that, from his perspective, the Army Corps has finally concluded what the BBNC, and a majority of Alaskans have; that Pebble’s plan is insufficient. “They can’t produce a quality mitigation plan in three months if they haven’t been able to do so for years,” Metrokin said, noting Pebble has not backed up the claim that its smaller 20-year mine plan is economic. BBNC has long opposed the project and has refused to allow Pebble access to its land for development. Pebble CEO Tom Collier downplayed the significance of the requirements, saying the letter is a normal part of the permitting process and the company is well on its way to developing a mitigation plan to meet them in a prepared statement. The company has had teams totaling about 25 people in the field this summer and a large part of their work has been mapping wetlands in the region over about the past month, according to Collier. Pebble’s new mitigation plan will likely focus on preserving an area multiple times larger than the aquatic areas impacted by the project, which should meet the requirements based on discussions with Corps officials, Collier said. “Anyone suggesting a different opinion — i.e. that Pebble will not be able to comply with the letter or that such compliance will significantly delay issuing a (record of decision) — must be ignorant of the extensive preparation we have undertaken in order to meet the requirements of the letter,” he said. Pebble spokesman Mike Heatwole wrote in an email to follow-up questions that Collier’s statement provides the best information the company has on the work right now and more details will be made public when they are available. Shares in Pebble’s parent company, Vancouver-based Northern Dynasty Minerals Ltd., closed Monday trading on the New York Stock Exchange at 90 cents per share, down 38 percent on the day after the letter was made public. Pebble’s initial compensatory mitigation plan released in January relied on a collection of smaller — and likely less costly — mitigation efforts outside of the Koktuli watershed. The company first planned to replace culverts in the Dillingham area to restore salmon access to about nine miles of spawning and rearing habitat; improve water treatment facilities at villages near the mine site; and periodically clean debris from seven miles of beach around the Cook Inlet port site. All of that potential work is outside of the remote and undeveloped Koktuli watershed. Pebble’s permitting executive Fueg acknowledged when the draft mitigation plan was published that the lack of development in the region beyond the immediate communities made it difficult for the company to identify opportunities to restore damaged wetlands or preserve areas threatened by other development — the more traditional means of wetlands mitigation now being demanded by the Corps. A Corps Alaska District spokesman did not immediately respond to additional questions for this story. Former EPA Administrator Scott Pruitt and Assistant Army Civil Works Secretary R.D. James signed a joint memo in June 2018 that updated guidance from the early 1990s as to how the agencies would handle wetlands mitigation specifically in Alaska. The revised guidance states that Alaska’s situation — more than half of the state is classified as wetlands with relatively little development — means specific, focused compensatory mitigation requirements traditionally used in the Lower 48 often aren’t realistic in Alaska. When avoiding or compensating for development impacts to wetlands is not practicable, minimizing wetlands impacts will be the main means of complying with Clean Water Act requirements, according to the 2018 memo. It also explains that compensatory mitigation over larger watershed scales could be appropriate for Alaska given that options to offset wetlands losses on a more localized scale are often limited. The guidance does not lay out quantitative thresholds for determining major versus minor impacts — that is decided on a case-by-case basis — but it outlines what should be considered in making that determination, an EPA spokeswoman said at the time. Elwood Brehmer can be reached at [email protected]

Greens Creek silver output up; Constantine investigates gold

The owners of a Southeast silver mine again reported production growth last spring despite the pandemic and an explorer in the region believes it is honing in on the source of historic placer gold deposits. Hecla Mining Co. produced 381,000 more ounces of silver at the Greens Creek underground mine near Juneau in the second quarter from a year ago — a 17 percent increase to 2.7 million ounces. For the year, silver production at Greens Creek is up more than 920,000 ounces, or nearly 20 percent, from the first half of 2019 to 5.5 million ounces total, according to the company’s quarterly earnings and operational report. Gold production at Greens Creek was down 8 percent, however, to 25,300 ounces in the first half of the year. The improved production at Greens Creek helped Idaho-based Hecla increase its overall sales revenue by 24 percent to $166.4 million in the second quarter. Hecla’s Alaska mine accounted for 51 percent of the company’s revenue in the quarter. The company also has precious metal mines in the Lower 48, Canada and Mexico. While Hecla still absorbed a net loss of $14 million despite the production growth, CEO Phillips Baker emphasized that the company produces roughly a third of all the silver mined in the U.S. and the second quarter production totals were the best since 2016. “I am extremely proud of our workforce’s adaptability and commitment in this challenging time, which positions Hecla well to improve cash flow generation in this higher silver and gold price environment,” Baker said. Hecla generated $27 million in free cash flow during the quarter. The company has leased a hotel in Juneau where incoming workers are quarantined for seven days before traveling to the Admiralty Island mine for three weeks of work, according to a monthly investor presentation. With the long-term upward trajectory of production at Greens Creek — Hecla has increased annual ore throughput at the mine 15 percent since purchasing it in 2008 — the company also increased silver reserves by 22 percent at the property last year and expects to operate Greens Creek with strong production into the 2030s, according to the presentation. Constantine gold To the north of Greens Creek on the mainland, Constantine Metals reported Aug. 13 that the company had identified prospects with “high-grade gold sampling results” at its Porcupine Creek property north of Haines. The prospects, dubbed Golden Eagle and McKinley Creek Falls, are located up a valley from historical placer operations. Historical mineral sampling by the U.S. Bureau of Mines produced samples with mineralization of up to 531 grams per ton of gold, according to Constantine. Company President Garfield MacVeigh said the high-grade occurrences have received little investigation for their potential, particularly given geological similarities with other known gold deposits in the region. “We look forward to evaluating these previously untested areas of prospective high-grade mineralization,” MacVeigh said. Earlier this year Constantine scaled back the summer exploration program at its nearby Palmer copper prospect from initial plans to limit the risk of spreading COVID-19. The McKinley Creek area, which is 100 percent owned by Constantine, is about five miles east of the much more advanced Palmer deposit. The company spun off the rest of its gold-focused program into HighGold Mining Inc. last year. HighGold is conducting 15,000-meter drilling program at the Johnson Tract prospect within Lake Clark National Park and Preserve. Elwood Brehmer can be reached at [email protected]

AIDEA gets green light for Ambler mining road

In approving a mining access road across the subarctic Interior, the Trump administration has signed off on another decades-long goal of Alaska development proponents. Bureau of Land Management Alaska officials signed a record of decision providing the State of Alaska right-of-way access across federal lands for the 211-mile Ambler mining district access road July 23. The road would open the roughly 75-mile-long mineral belt along the southwest portion of the Brooks Range for development of its copper, zinc, cobalt and precious metals. The area has been explored for decades but its remote location far from the road system has precluded additional work. Congress specifically contemplated the road in the 1980 Alaska National Interest Lands Conservation Act, or ANILCA, which directs the Interior Secretary to permit a right-of-way through Gates of the Arctic National Preserve to access the mining district, per other environmental regulations, when one is applied for. The state Department of Transportation began early reconnaissance work on the road under former Gov. Sean Parnell before the project was transferred to the Alaska Industrial Development and Export Authority, which applied for the right-of-way under Gov. Bill Walker’s administration. “This long-sought development of the road and mining district represents tremendous potential for economic growth, diversification, and job opportunities for Alaskans, along with revenue expected to the state and local governments for decades,” AIDEA board chair Dana Pruhs said in formal statement. Gov. Mike Dunleavy thanked President Donald Trump and Interior Secretary David Bernhardt for working to advance domestic mineral production in a prepared statement. “Nearly 40 years after Congress guaranteed access to the Ambler mining district, today’s decision allows AIDEA to move forward with the planning of a project that could create thousands of Alaskan jobs and a new source of revenue for the benefit of all Alaskans,” Dunleavy said. The members of Alaska’s congressional delegation largely echoed the governor’s sentiment in a joint statement. Trump also opened the Arctic National Wildlife Refuge to oil leasing and potential exploration — another ANILCA-designated opening for development — via a provision in the tax cut bill he signed in December 2017. Local opposition to the Ambler project from villages such as Evansville and Bettles, near where the road would connect to the Dalton Highway, has focused on the belief the road and eventual mine traffic would disrupt the migration of caribou needed for subsistence harvests. AIDEA officials are modeling their plan for an industrial toll road after the 52-mile haul road to the Red Dog zinc mine in Northwest Alaska that the authority financed in the late 1980s. And while AIDEA insists access to the road will be limited to mining activity, some also question whether the state will be able to effectively restrict access or if it will instead lead to increased sport hunting pressure. Numerous conservation groups and others have also questioned the economics of the road. Estimated in 2017 to cost between $280 million and $380 million for basic gravel construction, the final environmental impact statement, or EIS, for the road now pegs the total construction cost at approximately $520 million. They often note AIDEA has not publicly detailed its plan to coordinate road financing and construction with development of the mineral prospects needed to support the road beyond a conceptual plan. While there are more than a dozen early-stage prospects in the Ambler district, only two deposits held by Vancouver-based Trilogy Metals have been explored significantly and only Trilogy’s Arctic copper-zinc-precious metal prospect is close to be ready for permitting. Trilogy said “development of the road will unlock the world-class economic potential of the region by allowing greater access to the district and the potential development of the Arctic project,” in a company statement. Trilogy leaders previously said the company would likely start federal permitting for an open-pit mine at Arctic shortly after the road was approved. However, the junior mining company was forced to defer its 2020 summer field season because of the pandemic and it’s unclear at this point where the project stands. Elwood Brehmer can be reached at [email protected]

Final Pebble mine EIS maintains early Corps conclusions

U.S. Army Corps of Engineers officials describe the Pebble mine as one that would remove 99 miles of fish habitat at the mine site but poses little risk to the broader area in the project’s final environmental impact statement released July 23. The conclusion mirrors what was written in excerpts of the preliminary final EIS leaked to the public in February. Pebble Partnership CEO Tom Collier said both the preliminary and final documents support the company’s assertion that the mine could operate in harmony with the region’s famed salmon fisheries. “Alaskans have demanded that Pebble, and any Alaska resource development project, meet its high standards before the project could advance. Today, we have passed a critical milestone on that journey,” Collier said in a July 24 statement. He said the EIS process has been thorough and called criticism of the Corps’ work on the project “unfortunate,” insisting that the mine can be a source of year-round jobs in an area without many. The final EIS is the last step in the federal review of the project before Corps officials reach a conclusion on the key record of decision for the project: whether it is an acceptable development plan based on the issues studied in the EIS process. Pebble says it will work through state permitting over the next three years before commencing a four-year construction period for what is now planned as a 20-year mine. Project opponents contend the Corps limited its focus to environmental impacts at the mine site and ignored potential downstream effects, particularly to fisheries, in the draft EIS. They allege the process has been rushed to fit within the timeframe of President Donald Trump’s term in office following an attempt by the Obama administration to preemptively veto the project via Environmental Protection Agency authority. The EPA ultimately has the authority to reject the Corps’ decision on Pebble’s Clean Water Act Section 404 wetlands fill permit application, which triggered the EIS in 2018. Corps officials responded to concerns from the commercial fishing sector that the mine would damage the perceived quality of Bristol Bay salmon and ultimately lower its market value by noting that some of the state’s other fisheries are conducted alongside resource development. “Prices paid in Bristol Bay are nearly always lower than those paid in other Alaska salmon fisheries producing similar products, which reflects the higher transportation expense associated with Bristol Bay’s geographic location and the lack of a strong brand identity, which could boost prices,” the EIS states. “(T)he Cook Inlet salmon fisheries exist in an active oil and gas basin and have developed headwaters of Anchorage and the Matanuska-Susitna areas. The Copper River salmon fishery occurs in a watershed with the remains of the historic Kennecott copper mine and the Trans-Alaska Pipeline System in the headwaters of portions of the fishery. Both fisheries average higher prices per point than the Bristol Bay salmon fishery.” It concludes that there would be “no measurable change” in the numbers of salmon returning to the Nushagak and Kvichak rivers or in the long-term health of the commercial fisheries in the region. At the mine site, approximately 99 miles of fish habitat, part of roughly 2,200 acres of permanently impacted wetlands, would be destroyed in the combined North and South Fork Koktuli drainages, which feed the Nushagak River and support all five species of Pacific salmon. However, the expected losses of wetlands at the mine site represent just six percent of the mapped wetlands in the Koktuli, according to the document. Bristol Bay Native Corp. CEO Jason Metrokin noted the impacts of the current plan represent mining just a small portion of the copper-gold ore body and leaders of Pebble’s parent company, Vancouver-based Northern Dynasty Minerals Ltd., have long pitched additional development to investors. “Put simply, the EIS does nothing to alleviate our concerns about the myriad risks Pebble would pose to Bristol Bay’s watershed, salmon, way of life, and economy,” Metrokin said in a statement. Staff scientists for the Environmental Protection Agency, Interior Department and several state agencies were highly critical of apparent gaps related to wetlands, hydrology and fish habitat data in official comments on the draft EIS. Interior scientists went as far as to suggest the Corps should rewrite the voluminous document in light of the omissions. Corps officials said in response that the agencies’ comments would be considered alongside all others. The final EIS states that gaps in wetlands data identified by other agencies and stakeholders in the draft EIS published in February 2019 have been filled. Corps officials wrote in the EIS they do not believe it is necessary to analyze the likelihood that the mine’s proposed tailings dams could fail — a primary concern of mine opponents — because the Pebble Partnership is designing the dams differently than those that have failed at other mines in recent years and attracted global attention. “Modeling of a catastrophic, very low-probability tailings release was requested by commenters, but deemed inappropriate based on the applicant’s permeable flow-through design for the tailings storage facility (TSF) main embankment, compared with historical water-inundated TSFs that have been subject to large-scale failures,” the EIS states. Corps officials have also said in media briefings that a detailed review of the tailings dams would be done by the state under the Department of Natural Resources Dam Safety Program. DNR officials wrote in March comments on the preliminary final EIS that a full breach of a large and well-designed and operated tailings dam is very unlikely, but asserted that Pebble’s mine waste storage plan high-level and key aspects of it could be impractical. According to the comments, Dam Safety officials believe the Corps’ use of a subject risk analysis process in the preliminary final EIS to study tailings and water management pond dam failure scenarios was “based on a marginally developed, conceptual design, and the exclusion of other risks including the other relatively large, water management dams, does no represent a thorough assessment of risk from potential failure modes and potential impacts.” The pre-final EIS comments from DNR’s Dam Safety Unit also state that Pebble’s plan to move pyritic, or potentially acid-generating, mine tailings from a temporary storage facility into the pit at mine closure “does not appear to be reasonable, practicable or safe” because filling the pit would preclude accessing other parts of the deposit. Additionally, the tailings are likely to consolidate over years in a storage pond, making them more difficult and costly to extract, according to the Dam Safety Unit comments. The EIS highlights Pebble’s plan to drain and thicken the bulk tailings — which has caused critics and regulators to question whether the company can constantly treat the large volume of water — as a design element likely to limit the downstream flow of tailings in the event of a spill. However, Corps officials also acknowledge in the document that the ground waste rock may not settle as expected and it could only be confirmed if the tailings system was working as intended after about two years of operation. Additionally, the corridor identified as the least environmentally damaging route for a road to a port on west Cook Inlet needed to supply the mine remains viable despite the fact that some of the Alaska Native corporations that own land in the corridor are some of Pebble’s staunchest opponents, according to the EIS. In late May, Corps officials announced they had identified a road route along the north shore of Iliamna Lake to a port on the west side Cook Inlet as the least environmentally damaging practicable alternative, or LEDPA, for the expansive mining plan in its environmental impact statement review. Until that point, Pebble had long promoted its plan for a year-round, ice-breaking ferry across the lake to shuttle supplies and metal concentrates to and from the mine site to the north of the lake. Alaska Native village corporation Pedro Bay Corp. owns much of the land along Iliamna’s northeastern corner and along with regional Bristol Bay Native Corp. — which holds the subsurface rights to Pedro Bay Corp. property — has opposed to the project for years and insists Corps officials are discounting the fact that Pebble does not have access to the area. Army Corps Alaska District Regulatory Chief David Hobbie said in a July 20 call with reporters before the release that Pebble officials maintain they believe they can gain access to the area so the agency considers the route viable. The EIS states the Corps has determined that “even though some alternatives may not be available to the applicant at this time, the alternatives remain reasonable under (National Environmental Policy Act) guidelines and are retained in the EIS.” Economic review unlikely Opposition groups and some technical observers of Pebble’s complex plan question the economics of it, particularly given the scaled-back, 20-year mine, and have pointed to the lack of an independent economic assessment as justification for the skepticism, but Collier said in an interview that that one is unlikely to come at this point. That’s because Northern Dynasty Minerals is past the stage of seeking the retail or institutional investors that would find a public economic assessment of the project valuable, Collier said. At this point, the junior mining firm is focused on attracting a large partner to help fund development. “A major mining company isn’t going to give two wits about a PEA (preliminary economic assessment),” he said, adding any interested company would conduct its own evaluation and it would be costly for Pebble to hire the required independent analysts. Northern Dynasty ended the first quarter with $7.2 million Canadian in cash, according to its latest quarterly report. Canadian finance law prohibits the company from disclosing its internal projections, he said. Collier told the Journal in the spring of 2018 — shortly after Pebble filed its permit application — that Pebble would likely publish a PEA by the following winter. Opponents have urged the Corps to demand economic information from Pebble so it can be better known which of the development options are truly viable. Project managers for the Corps have said they would like to have the estimates but they are not required for the EIS. Editor's note: This story was updated for the Aug. 2 edition of the Journal that went to press July 29. Elwood Brehmer can be reached at [email protected]

Hardrock exploration resumes after pandemic pause

Hardrock exploration activity continues to build at some mining camps across the state as companies get back to work delayed for months by the pandemic. Tectonic Metals started drilling its Tibbs gold prospect not far to the east of the producing underground Pogo mine in the Interior July 20, company CEO Tony Reda wrote via email. The rotary air blast drilling program is first looking to expand on a discovery last year of a 29-meter seam containing more than 6 grams of gold per metric ton of ore. Reda said Tectonic has a thorough COVID-19 mitigation plan in place at its camps and company leaders are excited to learn more about their prospects. “Given our strong treasury in conjunction with the compelling targets and the untapped potential at our Tibbs and Seventymile projects, the Tectonic team has unanimously concluded that we must move forward with two drill programs this summer,” Reda said. “The truth machine is currently hard at work at our Tibbs project following up on last year’s intercept of roughly six grams per tonne over 29 meters.” Reda said in April that it was unclear at that point whether or not the drilling could be done this year. He added that two other targets will be drilled at Tibbs before work moves east to the Vancouver-based company’s Seventymile prospect near the Canadian border. Drilling at each of the near-surface prospects will cumulatively cover roughly 2,500 meters, with an average bore length of about 100 meters, according to Tectonic. The drilling will be company’s first at Seventymile, a 149,000-acre property owned by Doyon Ltd., the Interior regional Alaska Native corporation. Doyon announced in late April that it had invested $1.5 million in Tectonic, which has rights to four early-stage exploration properties in the Interior. The investment made Doyon the largest single shareholder in Tectonic with a 22 percent stake in the company. As of July 10 there were 69 active applications for hardrock exploration across the state, according to Department of Natural Resources officials, who noted that not all of the applications indicate active field work this summer. Placer miners also held 837 active operations permits and another 90 suction dredge operations have active mining permits as well. Hardrock exploration had been on the upswing prior to 2020 with estimates of about $150 million annually spent by companies searching for metals across Alaska in recent years. Department officials reported anecdotally through field inspections that higher gold prices have encouraged more placer and suction dredge activity though some operations have been idled because of travel restrictions and funding challenges, according to an email from DNR spokesman Dan Saddler. Gold prices have risen steadily over the past year to more than $1,800 per ounce. Donlin Gold temporarily suspended work and sent approximately 120 workers home from its remote upper Kuskowkim valley camp in early April as the company formulated a plan to address health and safety risks stemming from COVID-19. Workers began returning to the camp May 22 following implementation of COVID-19 mitigation strategies. Constantine Metal Resources is conducting a scaled-back $2.1 million field program at its multi-metal Palmer prospect north of Haines this summer as travel restrictions and health concerns limited exploration activity early in the year, according to a company statement. Constantine is focusing on gathering environmental data and other information to aid in permitting future underground exploration. Dowa Metals and Mining, Constantine’s partner in Palmer through Constantine Mining LLC Joint Venture, will be funding this summer’s work and take a slightly larger stake in the project as a result, according to Constantine. President Garfield MacVeigh said in a statement about the work program that despite the shorter-than-anticipated work schedule and other challenges from the pandemic the joint venture continues to make progress towards underground exploration and feasibility studies. “We also continue to be excited about the exploration potential on both the (Palmer) property as well as the immediately surrounding district controlled 100 percent by Constantine,” MacVeigh said. The state Department of Environmental Conservation last fall remanded a water discharge permit key to Constantine’s plan to excavate a roughly 1.2-mile tunnel from which the company could conduct exploration activities for review by the Division of Water following appeals from local environmental groups and others. They claim the waste management permit for groundwater discharges is insufficient because the wastewater will quickly resurface in nearby Glacier Creek, which feeds the salmon-producing Klehini and Chilkat rivers. The development includes a large water treatment facility with two settling ponds in addition to the exploration tunnel. DEC officials have yet to make a decision on Constantine’s waste management permit and while staff are working on it there is no timetable for a resolution, according to DEC spokeswoman Laura Achee. The permit decision is also in flux partly due to a U.S. Supreme Court case over wastewater treatment in Hawai’i between the County of Maui and the Hawai’i Wildlife Fund. In April the court issued a middle-ground opinion remanding that case back to the Ninth Circuit Court of Appeals for further consideration. There will be less activity in the western Brooks Range this summer as Trilogy Metals announced earlier this month that it would be deferring its summer exploration program at its Upper Kobuk mineral projects in the Ambler mining district. The company said in a July 8 statement that the combination of ongoing safety concerns regarding the possible spread of the coronavirus at its remote camps and the fact that the field work had already been significantly delayed its entire 2020 field season had been called off. Trilogy and its partner, Australian-based South32 Ltd. fund the exploration projects through their joint venture Ambler Metals LLC. Trilogy holds the Arctic copper-zinc and precious metals deposit, which is the most advanced prospect in the region as well as the nearby Bornite copper-cobalt prospect and other early-stage properties in the area. The company expects to complete a feasibility study on the Arctic prospect later this summer. A record of decision on the Ambler Mining Industrial Access Project, most commonly known as the Ambler road, is expected from the Bureau of Land Management this summer as well. The road is being pursued by the Alaska Industrial Development and Export Authority and has been met with strong opposition from many locals and others who are skeptical of the private industrial toll road concept. However, state officials insist the plan will provide access to one of the state’s premier mineral belts while also allowing the state to recover development costs through tolls. Elwood Brehmer can be reached at [email protected]

New front forms in Pebble battle over land route

A new front is forming in the ongoing battle over the Pebble mine concerning lands up to 50 miles from the proposed project site. Many opposed to the world-scale copper and gold mine insist the U.S. Army Corps of Engineers is affording the Pebble Partnership special treatment under the Trump administration, which they claim is now manifesting itself in a new transportation plan that Pebble currently doesn’t have access to develop. On May 22, Army Corps Alaska District Regulatory Chief David Hobbie announced the agency had identified a road route along the north shore of Iliamna Lake to a port on the west side Cook Inlet as the least environmentally damaging practicable alternative, or LEDPA, for the expansive mining plan in its environmental impact statement review. Until that point, Pebble had long promoted its plan for a year-round, ice-breaking ferry across the lake to shuttle supplies and metal concentrates to and from the mine site to the north of the lake. The re-route was made to alleviate some of the concerns of area residents who feared the ferry could impact Iliamna’s unique population of freshwater seals and complicate winter travel across the lake ice among other concerns, Hobbie said at the time. Pebble amended its plans to align with the Corps’ LEDPA decision and Tom Collier, CEO of the Vancouver-based junior mining firm noted the northern road route for years was the company’s preferred option — when it was officially advancing a much larger, 78-year mining plan — and the company only selected the ferry route because it was thought regulators would prefer the smaller wetlands footprint it offers. The south ferry route allowed Pebble to utilize lands owned by Alaska Peninsula Corp., which the company has an access agreement with, for the roads and ferry terminals on the north and south sides of the lake to access a port at Amakdedori on Cook Inlet. Pebble and Alaska Peninsula Corp. announced July 6 they have signed a memorandum of understanding to make APC the lead organizer of a consortium of other area village corporations to provide transportation and logistics support for the project. The companies estimate the MOU could be worth more than $20 million per year to APC during mine operations. APC leaders said the agreement would help provide locals with more opportunities to participate in the project. However, some of Pebble’s staunchest opponents hold title to the land Pebble would need access to in order to develop the northern road and port corridor. Alaska Native village corporation Pedro Bay Corp. owns much of the land along Iliamna’s northeastern corner and Iliaska Environmental LLC is a majority owner of a rock quarry at Diamond Point, the new location for the Cook Inlet port. Iliaska Environmental is owned by the Igiugig Village Council and regional corporation Bristol Bay Native Corp. owns the subsurface rights to those lands. All three have been opposed to the project for years and stress Corps officials are ignoring the fact that Pebble does not have access to the area as well as their own precedent in similar, prior instances. Pedro Bay Corp. CEO Matt McDaniel could not be reached for comment in time for this story but he wrote to Corps of Engineers Pebble project manager Shane McCoy last July to reiterate that the company “has not, and will not, consent to the Pebble Limited Partnership’s use of its lands for the Pebble project.” As such, the north route should not be considered practicable in the final EIS, McDaniel wrote. Eliminating the northern corridor option at this point would be a major problem for Pebble, as the Corps is scheduled to release the final EIS July 24. McDaniel’s 2019 letter quickly spurred a memo from the Corps to Pebble requesting an analysis of feasible northern corridor options around Pedro Bay Corp. lands, but a consultant to Pebble determined there isn’t one through the mountainous terrain. In October 2017, Hobbie signed a record of decision for an oil spill response facility proposed near Cordova and being pursued by the Native Village of Eyak that eliminated three alternative development sites because the landowners either would not sell the parcels or otherwise provide access to them for development. As such, the Corps did not consider the alternatives “practicable,” according to the decision document. As for Pebble, however, the Corps continues to advance the LEDPA despite the objections from the landowners. Hobbie said during a July 20 media teleconference that Corps officials are relying on Pebble’s assertion that the company can gain access to the northern corridor. “Since Pebble has stated it’s a practicable alternative, we’ve still considered it,” Hobbie said. Corps Alaska District spokesman John Budnik additionally wrote via email that the Native Village of Eyak did not contend it could gain access to the lands needed for the alternatives discarded in its project. Pebble spokesman Mike Heatwole wrote in an email that observers of the situation are likely confusing “preferred” with “practicable,” a legal term. “Our preferred alternative has always been the ferry route; it remains the ferry route. One of the reasons that is so is that the land owners (Alaska Peninsula Corp.) had already agreed to our access,” Heatwole wrote. “We continue to believe that the land owners will ultimately agree to the land access needed to construct the (northern) route.” Elwood Brehmer can be reached at [email protected]

NOVAGold files lawsuit against authors of short sale report

A co-owner of the massive Donlin gold project is back on the offensive, this time with a lawsuit against a New York firm that issued a report claiming the mine is not viable and encouraging investors to dump shares in the company. NOVAGold Resources filed the complaint against J Capital Research in New York Federal District Court June 29, which alleges J Capital’s 22-page May 28 short-sale report lied to investors on multiple fronts and led to NOVAGold losing a significant share of its market capitalization in the weeks that followed. Shares in Vancouver-based NOVAGold lost 22 percent of their value in the two weeks following the release of the J Capital report. NOVAGold stock traded at $8.42 per share on the New York Stock Exchange at the close of trading July 14, down from a pre-report price of $10.65 per share at closing May 27. The company had a market capitalization of nearly $2.8 billion as of July 14. J Capital Research founder Tim Murray authored the report and acknowledged in it that the company held a short position in NOVAGold, meaning J Capital stood to profit if NOVAGold lost value. NOVAGold claims in the complaint that J Capital’s first mistake was to step outside its lane. J Capital has previously focused its research on Chinese technology companies, according to the complaint, an assertion supported by information on the financial firm’s website, which also advertised the firm as “Making short work of over-valued companies.” “Neither its inexperience nor the ready availability of actual facts deterred JCAP. It did not care. Truth was not the goal,” the complaint states. According to the complaint, the report falsely insisted that NOVAGold management has mislead the company’s investors by claiming the $6.7 billion-plus project is economically feasible; Murray and J Capital flatly contend it isn’t. The complaint also accuses J Capital of mischaracterizing Donlin as a project “that is not feasible to put into production at any gold price” largely because of its technically challenging size and remote Western Alaska location. NOVAGold is a 50 percent owner of Donlin Gold LLC, the joint venture project company, along with mining industry giant Barrick Gold Corp. As proposed, the open-pit Donlin mine in the upper Kuskokwim River drainage would be one of the world’s largest, producing more than 33 million ounces of gold over an initial 27-year life. A 315-mile natural gas pipeline from the west side of Cook Inlet would fuel a power plant at the mine and fuel storage tanks would be built at Dutch Harbor, in addition to the very large-scale operation at the mine site. Attorneys for NOVAGold pointed to Barrick’s status as a 50 percent partner in Donlin Gold and its generally well-regarded status in the industry as evidence to the viability of the project. J Capital stressed in its report that NOVAGold continues to rely on a $6.7 billion cost estimate for the project from the last feasibility study done in early 2012. The short sellers contend the cost should be $8 billion or more, but NOVAGold notes the $8 billion figure cited in the 2012 study included the project’s all-in operating costs to comply with U.S. general accepted accounting principles, commonly known as GAAP. “These statements are false, misleading, defamatory, and they are designed to create panic,” the complaint states about J Capital’s referenced to Donlin’s cost. “NOVAGold has clearly and consistently communicated to investors that the estimated initial capital required for the project is $6.7 billion.” NOVAGold executives said shortly before the short-sale report that they are working to update the feasibility study. Attorneys for NOVAGold also highlighted several inaccurate characterizations of the planned power plant at the mine site as being illustrative of the overall nature of the J Capital report. The report asserts that the planned Donlin power plant would be the largest in Alaska, would increase power generation in the state by 40 percent and would produce enough electricity to power a city of 500,000 residents. However, the Beluga power plant owned by Chugach Electric Association is 332 megawatts and average generation in Alaska is about 800 megawatts, meaning the 227-megawatt plant run full bore would instead increase statewide power generation by about 28 percent. “In moving rapidly from one falsehood to the next, JCAP’s strategy is death by a thousand cuts. The report lobs lie after lie — both big and small — attacking the feasibility of the Donlin gold project in an effort to chip away, bit by bit, at investors’ confidence in the Donlin gold project,” the complaint states. “The resulting damage to NOVAGold’s reputation occasioned by JCAP’s false statements was inevitable and is substantial.” J Capital co-founder Anne Stevenson-Yang wrote via email that she learned of the allegations on Twitter and she doesn’t believe the complaint warrants a comment in response. “As to what (NOVAGold Chairman) Thomas Kaplan says about me/us on the company website, even I do not have the patience to read it all, so it’s hard to imagine that normal investors read this stuff,” Stevenson-Yang wrote. Kaplan issued his own 17-page response to J Capital’s report in early June, in addition to NOVAGold’s lengthy official corporate rebuttal, which included a line-by-line analysis of J Capital’s assertions. NOVAGold did not specify in the complaint what it is seeking other than requesting damages that “compensate NOVAGold for the harm incurred.” J Capital has until July 21 to submit a formal answer, according to a court summons issued June 30. ^ Elwood Brehmer can be reached at [email protected]

Exploration resumes at gold prospect within national park

Drilling is back to a remote gold prospect inside Lake Clark National Park after it largely sat dormant for more than two decades. Vancouver-based HighGold Mining commenced its summer drill program at the Johnson Tract prospect on the west side of Cook Inlet June 30, according to a company statement. HighGold CEO Darwin Green said a small amount of drilling done late last summer combined with historical records formed the basis for this year’s work. The company announced in late April that it had formed a preliminary resource estimate of 2.1 million metric tons of ore with an average grade of 10.9 grams of gold equivalent per metric tonne for a resource of approximately 750,000 ounces of gold equivalent. The Johnson Tract prospect sits on Cook Inlet Region Inc., or CIRI, in-holdings within the boundaries of Lake Clark National Park and Preserve. Last year CIRI leased 20,900 acres of the property to Vancouver-based Constantine Metal Resources Ltd. for 10 years. Several Southcentral Alaska Native village corporations also own surface rights to land there, while CIRI holds the subsurface mineral rights to those areas. The multi-metal deposit is about 10 miles from tidewater near Tuxedni Bay, about 125 miles southwest of Anchorage. HighGold is also estimating the primary targets on the Johnson Tract property hold another 134,000 ounces of inferred gold equivalent resources, according to the NI43-101 Canadian regulatory mineral resource estimate report published April 29. HighGold’s work in 2019 generated numerous quality drill targets within an 800-meter radius of the high-grade (Johnson Tract) deposit mineral resource, several of which will be drilled for the first time this year,” Green said. “Focus is on expanding the mineral resource base and discovering new zones of mineralization, with early emphasis given to the northeast offset target where limited drilling by previous operators identified what is believed to be the fault-displaced continuation of the deposit. Crews are on-site, COVID-19 mitigation plans are in place, and drills are in position and ready to commence coring.” While primarily a gold deposit, Johnson Tract also contains significant amounts of silver and zinc along with smaller concentrations of copper and lead, according to the NI43-101 resource estimate. HighGold also announced July 6 that it would issue more than 6.9 million shares for a total offering of approximately $12 million Canadian to help fund its work. Anaconda mining company drilled 88 holes at Johnson totaling more than 26,800 meters between 1982 and 1995. The prior drilling revealed gold resources in excess of 10 grams per metric ton in many areas, as well as high-grade zinc and copper ore, according to HighGold. The first phase of drilling this year will utilize two diamond drill rigs on five targets around the primary Johnson deposit for cumulative drilling of 7,000 to 10,000 meters, according to HighGold. The preliminary results of that work will inform subsequent drilling later in the season. HighGold is a spin-out of Constantine, which is also exploring the Palmer copper prospect in the Chilkat River valley north of Haines. If the decision is made in subsequent years to ultimately build a mine — currently envisioned as an underground operation — CIRI could obtain a 25 percent interest in the project at that time, according to HighGold. The Alaska Native regional corporation would also receive net smelter royalties of 2 percent to 4 percent if a mine is developed. The mine would require an access road to a port, both of which would need to be built. The CIRI leases also come with access easement rights and the site has an airstrip built for the earlier exploration work, according to the company. Elwood Brehmer can be reached at [email protected]

Donlin co-owner NOVAGold issues rebuttal to short-sale report

Investors will now decide who’s right and who’s wrong. NOVAGold Resources Inc. responded sharply on June 8 to a short-sale report calling the company’s massive Donlin gold project “fool’s gold” and a “pipe dream,” in reference to the lengthy natural gas pipeline that is planned to help power what would be one of the largest open-pit gold mines on Earth. Executives for NOVAGold said the May 28 short-sale report compiled by J Capital Research USA LLC is “error-ridden” and a “sucker punch” aimed at artificially degrading NOVAGold’s stock value. “When I first read JCAP’s report, my first reaction was to chuckle because the piece was clearly so fallacious that I initially assumed it had been written by a child — cooped up kids have far too much time on their hands these days — or, more likely, a disgruntled short-seller,” Thomas Kaplan, chairman of Vancouver-based NOVAGold wrote in a 17-page personal rebuttal. NOVAGold CEO Greg Lang said in a formal statement that the company has thoroughly reviewed the report and is evaluating its legal options against JCAP. Leaders of JCAP acknowledge on the firm’s website that they hold a “short” position in NOVAGold stock, meaning they stand to profit if the mining company’s stock loses value, but insist their report is fact-based and lays out a compelling argument as to why Donlin is “the deposit that will never be mined.” NOVAGold stock sold for $10.65 per share on the New York Stock Exchange at the close of trading May 27 before the short-sale report was released. It has since traded between $8 and $9 per share and closed trading June 23 at $8.77 per share. The JCAP report largely hinges on a common and often accurate refrain for Alaska resource projects: that despite its size, the 33 million-ounce Donlin gold deposit is simply too remote and technically challenging to be economically viable. “(NOVAGold) management’s game is clear: keep investors interested in the stock while they rake in huge salaries,” the JCAP report alleges. “Construction of the Donlin mine was originally expected to start in 2008. Now, 12 years later, management’s best guess is that construction may start in 2022 and production in 2028.” Donlin Gold, the joint-venture project company owned 50-50 by NOVAGold and mining giant Barrick Gold Corp., received a record of decision approving the project’s environmental impact statement from the Army Corps of Engineers in August 2018. Barrick Gold Corp. has not commented on the JCAP report. Donlin officials for years have acknowledged the project will require strong gold prices to be profitable but have declined to specify what the market conditions must be to sanction the mine even as gold prices have risen steadily from about $1,400 per ounce to more than $1,700 per ounce over the past year. Gold peaked at nearly $1,900 per ounce in mid-2011. According to the report, NOVAGold leaders “might have the cushiest job in mining” because CEO Lang has been paid approximately $8.3 million in cash and taken over 1.8 million shares in the company over the past five years despite leading a junior mining firm with no operating income. NOVAGold executives and directors have cumulatively netted about $35 million from share sales over that time as well. About 70 percent of NOVAGold insider share sales have occurred in the past year while the company’s stock has increased in value by roughly 300 percent, according to JCAP figures. Over that time, Chief Financial Officer David Ottewell sold more than half his shares in NOVAGold and Lang reduced his position by 26 percent. “Clearly, the insiders have voted with their feet,” the report concludes of the stock sales. NOVAGold responded that management’s compensation is established by a committee of the company’s board of directors and is regularly measured against a group of peer companies. NOVAGold held $59.7 million in cash and $108 million in total liabilities at the end of February, according to the company’s filings with the Securities and Exchange Commission. JCAP fundamentally contends the 2011 capital cost estimate of $6.7 billion for Donlin was far too low at the time and only grown with inflation since. NOVAGold leaders said in April that the company is working to update its feasibility study this year. The report focuses on the 315-mile, 14-inch natural gas pipeline Donlin plans to build from the west side of Cook Inlet to the mine site near Crooked Creek in the upper Kuskowkim River drainage, which JCAP calls a “project killer.” It references a prior $1 billion cost estimate for the pipeline and asserts a more accurate cost considering inflation would be more than $3.8 billion. According to the report, JCAP consulted with a pipeline expert who confirmed the traders’ rough calculations that the Donlin pipeline would cost 200 to 400 percent more than NOVAGold has stated. “The proposed natural gas pipeline central to powering the project is dead on arrival. The terrain around the Donlin deposit is among the most inhospitable on the planet,” the report states of the pipeline that would cross the Alaska Range. JCAP also discounts the option of barging diesel nearly 200 miles up the Kuskokwim as an alternative fuel source to the pipeline given the sheer volume of fuel that would be needed to power the mine facilities as also being a “bust.” At its planned size to produce 1.1 million ounces of gold per year, Donlin would need more than 1 million liters, or about 264,000 gallons of diesel per day, but the project only has permits to barge a little more than half of that for mine vehicle fuel, according to the report. “Under the most optimistic scenario, cutting production to half of what is now planned, the diesel barged in would be sufficient for at most seven months of operations per year, essentially reducing output to a quarter of what is now planned,” the report sates. However, NOVAGold’s 40-page line-by-line rebuttal to JCAP calls the report’s conclusions on the pipeline simply “inaccurate,” noting references to anonymous engineers and pipeline experts also lack the individuals’ credentials. NOVAGold stresses that the capital costs specified in the 2011 Donlin feasibility study were compiled in accordance with U.S. Generally Accepted Accounting Principles, or GAAP, and the pipeline design and development costs were put together in 2013 by the international engineering firm CH2M Hill (now Jacobs Engineering). NOVAGold management also discounted a comparison of the Donlin pipeline to the 750-mile, 30-inch Mackenzie River pipeline project in Canada that was stopped in 2017 with an estimated cost of $16 billion Canadian. Similar to several Alaska North Slope gasline proposals, the Mackenzie River pipeline was planned to move large quantities of gas from the river delta and near shore Beaufort Sea south to infrastructure and markets in Alberta. “The Mackenzie pipeline project uses different materials in a different location with a different climate and environmental concerns. It is not an appropriate comparison,” states the NOVAGold rebuttal. NOVAGold also insists the amount of diesel needed to run the entire operation could be supplied via the Kuskowkim if needed just by increasing the number of fuel barge tows beyond what is planned for the mine vehicles; but the company does not address the logistical and storage issues that would come with using solely diesel fuel during the months when the river is frozen. Finally, NOVAGold leaders picked apart several inaccuracies in statements about Donlin’s 227-megawatt power plant. The JCAP report asserts that the planned Donlin power plant would be the largest in Alaska, would increase power generation in the state by 40 percent and would produce enough electricity to power a city of 500,000 residents. However, the NOVAGold response notes that the Beluga power plant owned by Chugach Electric Association is 332 megawatts and average generation in Alaska is about 800 megawatts, meaning the 227-megawatt plant run full bore would instead increase statewide power generation by about 28 percent. NOVAGold called the city comparison “exaggerated and irrelevant.” Donlin officials have said the plant would average 153 megawatts of output, which would be about 20 percent of the power currently produced in the state. Elwood Brehmer can be reached at [email protected]

Pebble Partnership pitches payments to area population

Pebble Partnership leaders announced a plan June 16 to pay Bristol Bay residents if the controversial mine project that has sharply divided many communities in the area reaches construction and eventually production. Pebble CEO Tom Collier said in a prepared statement that the revenue sharing program dubbed the “Pebble Performance Dividend” makes good commitment he offered in late 2017 when its new plan for a smaller, 20-year copper and gold mining operation was unveiled. The U.S. Army Corps of Engineers is currently evaluating Pebble’s Clean Water Act Section 404 wetlands fill permit application for the 20-year mine and drafting the corresponding environmental impact statement, or EIS. A final EIS should be released sometime this summer, according Corps Alaska officials. “While not everyone will want to work at the mine, this (dividend) ensures a direct way for everyone to participate. Whether a resident supports the project, opposes it, or is neutral, anyone who is a year-round resident can participate,” Collier said. Collier and other Pebble leaders have long touted the mine as a way to improve the economics of the region that currently relies on commercial fishing and tourism as its primary industries. The mine is expected to support up to 2,000 jobs during construction and between 750 and 1,000 jobs once it is developed, according to Pebble. The company says it will allocate $3 million per year for the dividend during the multi-year construction phase of the project. Once the mine is operating and profitable Pebble will distribute 3 percent of the net profits from the mine to Bristol Bay-area residents that have signed up for the dividend. As of last year the 31 communities in the area Pebble has made eligible for the dividends — in the Dillingham Census Area and the Bristol Bay and Lake and Peninsula boroughs — had a combined population of 7,378 residents, according to the state Labor Department. The mine site would be in the Lake and Peninsula Borough. Bristol Bay residents must have lived in the region for 12 months prior to enrolling in the dividend program. An online portal through which residents can enroll in the dividend program will be open through Aug. 31, according to Pebble. Opponents of the mine have characterized the dividend proposal as an attempt to buy support for a project that has widespread opposition in the region, primarily due to the concern that the mine would pose major, multifaceted risks to the salmon fisheries in the large Nushagak and Kvichak river systems. Jason Metrokin, CEO of Bristol Bay Native Corp., which has led the opposition to Pebble, said in a formal statement that the dividend proposal is another tactic “to try to sway public opinion on this vastly unpopular project.” He also questioned why Pebble would open a two-and-a-half-month enrollment period now when construction of the mine is at least three or four years away. While Pebble is nearing the end of the EIS process, it still must receive numerous other state and federal permits before construction can start and several of those permit applications typically take multiple years for officials to review and approve. “BBNC’s opposition to the proposed Pebble mine is rooted in our shareholders’ culture and subsistence way of life and is strengthened by the good science that concludes that the proposed mine would cause unacceptable and irreparable adverse impacts to the Bristol Bay region. We will not trade salmon for gold, and we will not be swayed by promises of cash payments from a proposed mine that cannot and should not be built,” Metrokin said. A 2019 poll commissioned by BBNC found that 76 percent of its shareholders were against the mine and 83 percent living in the Bristol Bay region opposed it at the time. In early May Pebble offered to have BBNC administer its Performance Dividend program through the Native regional corporation’s own shareholder dividend distribution program; the offer was unanimously rejected by the BBNC Board of Directors. Metrokin wrote to Collier May 22 in response to the offer that it lacked the detail that would be needed to support it. He continued to write that Pebble has not provided sufficient information about the economics of the company’s plan, regardless of the dividend proposal. “Consequently, your offer to share a portion of revenue from Pebble is too speculative to consider and highly unlikely,” Metrokin wrote to Collier. BBNC and other Bristol Bay stakeholders have asked (Pebble) to produce an economic feasibility study for its mine proposal for years and (Pebble) has repeatedly failed to do so. We do not believe that your 20-year mine plan is economically viable at all.” Collier has said Canadian finance laws prevent Pebble’s parent company, Vancouver-based Northern Dynasty Minerals Ltd. from releasing an economic analysis of the 20-year plan at this point. When asked about the allegation that Pebble is trying to buy support, spokesman Mike Heatwole wrote in an email that the company simply wanted to provide an additional way for residents who won’t end up working at the mine to share in its benefits. Elwood Brehmer can be reached at [email protected]

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