North of 60 Mining News - The mining newspaper for Alaska and Canada's North

Miners in Alaska make good money! How good? Well, a report recently published by the McDowell Group found that the 329 direct employees at the Pogo gold mine averaged a whopping US$116,916 before benefits during 2012.

Roughly 217 of these six-figure paychecks were brought home by Alaskans, including about 167 going to employees living in the Interior region of the state where the high-grade underground mine is located.

"Mining is good for Alaska and Pogo, specifically, is an important factor in the Interior's economy!" Lorna Shaw, a company spokeswoman told Mining News in an email.

Operated by Sumitomo Metal Mining Pogo LLC - a joint venture between Japanese firms Sumitomo Metal Mining Co. (85 percent) and Sumitomo Corp. (15 percent) - Pogo is a 2,500-metric-ton-per-day underground gold mine located in the heart of the Tintina Gold Belt.

Since 2008, this mecca of high-paying jobs situated some 85 miles (137 kilometers) southeast of Fairbanks and 38 miles (61 kilometers) northeast of Delta Junction, has produced roughly 1,000 ounces of gold per day and is on track to produce 352,000 ounces of gold in 2013.

Currently, there is enough gold in reserves at Pogo to keep the high-grade underground mine in operation until 2019, but discoveries of new gold-rich zones in the immediate mine area are expected to provide enough ore to keep this Interior Alaska gold mine in operation for years and possibly decades beyond current projections.

Golden jobs

According to the data collected by McDowell, Sumitomo Metal Mining Pogo paid US$38.5 million in wages to the average 329 million workers at the Interior Alaska gold mine in 2012.

Averaging US$116,900, the annual wage brought home by Pogo Mine workers is more than double the statewide average of US$50,100 for Alaska residents in 2012. This does not factor in the US$15.3 million of medical, retirement and other benefits paid to the mine workers.

Dialing in on the Southeast Fairbanks Census Area - a 25,000-square-mile region of Interior Alaska that encompasses Pogo, Delta Junction, Tok and several smaller towns between Fairbanks and the Yukon Territory border - demonstrates the impacts of these high-paying jobs.

Not including Pogo jobs, the some 7,000 residents of the Southeast Fairbanks Census Area made an average wage of US$52,258 in 2012. Factoring in the paychecks brought home by the roughly 15 Pogo workers that live in this region boosts this median some 16 percent to US$60,804.

Above and beyond providing good-paying jobs, Pogo is bolstering Alaska's economy by buying local.

Including payroll, Sumitomo Metal Mining Pogo Mine spent US$255.3 million on keeping the mine in operation during 2012. Nearly half of this money, US$127.2 million, was spent on goods and services bought from some 290 Alaska-based vendors and contractors in 2012.

The goods provided by Alaska vendors ran the gamut, from paperclips to heavy equipment; and services ranged from couriers to engineering.

In addition to being an economic hub in the private sector, Pogo Mine paid a total of US$24.2 million in taxes and fees to state of Alaska in 2012.

With these funds circulating in Alaska's economy, it is estimated that the Pogo Mine supported 664 direct, indirect, and induced jobs in Alaska and a total statewide payroll of US$64.5 million during 2012.

Expanding horizons

Pogo currently has enough gold in reserves to ensure the mine remains an economic engine in Interior Alaska until 2019, but the recent success of the mine's exploration team indicates that the property has enough high-grade gold on the property to last decades.

At the end of 2012, Sumitomo Metal Mining Pogo reported 2.4 million ounces of gold in reserves (5.06 million metric tons of ore averaging 13.58 grams per metric ton gold) and 2.4 million ounces of gold in resources (6.84 million metric tons averaging 10.83 g/t gold).

The reserves are enough to keep the operation going to 2019 and if the resources are converted reserves, Pogo miners are looking at their workplace remaining open another six years. Nearly 1 million ounces of the gold reserves are located in the newly discovered East Deep, a zone of quartz-vein structures with grades and thickness that are strikingly similar to the Liese zone, which has been the primary source of ore for the mill at Pogo since production began there in 2006.

Through the end of 2012, 75 holes drilled into East Deep have outlined 964,000 ounces of gold reserves (2.36 million metric tons averaging 12.7 g/t) of gold and 514,000 ounces of gold resources of (1.23 million metric tons averaging 13 g/t gold). An underground definition drilling program carried out at East Deep in 2013 will likely boost the reserves in this new mining area at Pogo, resulting in an extension to the life of the mine and the jobs it supports.

Exploration drilling, meanwhile, is finding new horizons of resource and reserve expansion.

The Liese and East Deep zones are believed to converge at the North zone, a high-grade gold deposit located adjacent to the mill at Pogo.

The North zone is distinctive due to the vertical orientation of the veins found there. These narrower but higher grade veins are believed to be feeders that provided a conduit to deliver the gold-rich fluids to the flat-lying veins that comprise the Liese zone to the south and the East Deep zone to the east.

During the summer of 2013, Sumitomo Metal Mining Pogo completed roughly 33,000 meters of surface drilling focused on expanding the East Deep zone westward to the North and Liese zones. In addition to increasing the size of East Deep, this drilling discovered two new veins at the North zone.

With the mill sitting about where these three zones meet, accessing the ore at East Deep will be essentially the same as the zone for which the operation was built. Sumitomo Metal Mining Pogo has developed the 2150 portal to access East Deep. With permits in-hand, the company plans to begin commercial mining of high-grade ore from this zone in 2014.

In addition to growing the zones that lie directly adjacent to the mill, the 2013 surface program followed up on a discovery made about 0.8 miles (1.2 kilometers) south of the processing facility. The 16 holes drilled at this new area dubbed Pogo South have intersected three new veins, expanding the horizons of the Interior Alaska mine and the jobs that it supports.

Author Bio

Shane Lasley, Publisher

Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.

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