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By The Associated Press
The Associated Press contributed to this report. 

Full Metal takes Chickaloon coal leases


August 27, 2006

A Canadian mining exploration company with projects scattered throughout Alaska said it plans to seek coal in the sleepy community of Chickaloon.

Full Metal Minerals (USA) Inc. was the sole bidder for about 35 square miles of coal leases put up for sale by the Alaska Mental Health Trust. The total number of leases offered for sale by the trust covered nearly 47 square miles off the section of the Glenn Highway about 40 miles north of Palmer.

Some residents in the lightly populated area fear their backyard wilderness will be sullied by any coal mining nearby.

Pat Owens, a member of the Chickaloon Community Council, said she was disappointed a company was interested in the leases.

"It's like there goes the neighborhood," she said.

The company will pay about $91,000 a year for the rights to explore the land, said Mike Franger, a senior resources manager for the trust's land office. He expects to complete the sale within the next two weeks.

Rob McLeod, a founder and vice president of Full Metal Minerals, said Aug. 3 that rising coal prices and the potential to market the coal to Asian countries for use in steel refining attracted the company's interest.

Earliest exploration this fall

The company at the earliest would start exploring this fall, and would likely need to explore for at least two years. He said the company focuses solely on exploration so any mining would be done by a different company.

With the proper state and federal permits, however, the leases allow the company to mine the coal. The trust would receive 5 percent of any coal sales, Franger said.

Full Metal Minerals, which focuses on exploring in Alaska, has a dozen other projects, including drilling for zinc near the town of Chicken and for copper near Chignik.

The Vancouver-based company is also exploring a gold mine in Hatcher Pass and a uranium deposit near Elim. The company is a wholly owned subsidiary of Full Metal Minerals Ltd., a Canadian-based company traded on the Toronto stock exchange.


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