COVID slows mineral plans in NANA region
NW Alaska corp. eyes opportunities beyond flagship Red Dog North of 60 Mining News – July 24, 2020
Last updated 9/26/2020 at 3:06pm
The COVID-19 pandemic has led NANA Corp. and its mining partners, Teck Resources Ltd. and Ambler Metals LLC, to adjust their mineral exploration and mine development plans in order to meet the ever-evolving health and safety mandates to keep shareholders, employees and residents of Northwest Alaska as safe as possible.
"Although the pandemic was unexpected, learning to adapt is nothing new for the region and Iñupiaq people. For 40 years, NANA shareholders have supported responsible resource development, even during times of uncertainty," NANA inked in a July 17 mining update.
The Alaska Native Claims Settlement Act (ANCSA) regional corporation for Northwest Alaska said this support for responsible resource development allows projects like the Red Dog Mine operated by Teck to continue providing important economic opportunities and independence for residents of the NANA Region. Roughly 90% of the Northwest Arctic Borough budget, as well as the newly established village improvement fund, is paid for using profits from that world-class zinc-lead-silver mine.
During 2019, NANA shareholders earned more than $53 million in wages from working at mining and mineral exploration projects, which represents 61% of all shareholder jobs at NANA or with their partners and affiliates.
"To achieve our mission of improving the quality of life for our people by maximizing economic growth, protecting, and enhancing our lands and promoting healthy communities, NANA relies on opportunities, like Red Dog Mine. No other single resource has provided the financial flexibility Red Dog has to the corporation, and the region," NANA penned in its update.
Northwest Arctic Borough proactively enacted emergency orders to lessen the impact of coronavirus in the region. In order to abide by these orders, as well as honor the wishes of the 11 communities across the 36,000-square-mile region, mining and mineral exploration projects have modified and sometimes completely deferred their 2020 programs.
The Red Dog flagship
Red Dog, a mine on NANA land and operated by Teck Resources, is one of the largest zinc producers in the world and the flagship project for the Northwest Alaska corporation.
In addition to the zinc – used for galvanizing steel, fertilizer, tablets and lozenges for colds and viruses, sunblock, and more – Red Dog produces lead, silver, and germanium.
Travel restrictions and other protocols related to COVID-19 is affecting production of these metals, as well as the lives of workers at the mine.
Management at Red Dog was quick to implement COVID-19 mandates to protect both mine workers and Northwest Arctic communities.
By mid-March, Red Dog had instituted pre-flight virus screenings for all personnel travelling to the mine and shortly after, banned travel from the mine to Northwest Arctic communities.
With the availability of COVID-19 testing, these mandates have been adjusted.
All Red Dog employees and contractors who wish to travel home within the NANA region for their time off are now required to be tested four to five days before departure from the mine and follow any community-specific guidelines and recommendations.
A worker protection period protocol has also been established for employees arriving at Red Dog prior to returning to their worksite. For in-region employees this involves a COVID-19 test at site and for out-of-region workers, the protocol requires testing before arrival. In either case, these workers must self-quarantine for 14 days at site or until they receive a negative test result, whichever comes first.
NANA points out that the minerals being mined at Red Dog are a limited resource, and the current mine plan forecasts Red Dog to close in 2031.
"With 11 years of mine life left, the question remains: what will replace Red Dog in providing benefits to the region, including jobs, NANA royalties and payment in lieu of taxes given to the NAB?" NANA queried.
The ANCSA corporation believes the answer to that question lies in some of the other extraordinarily rich mineral deposits and project across the wider NANA region.
"To keep NANA healthy for future generations, it's essential to consider new, responsible development projects – while maintaining that subsistence is the highest and best use of our lands," the Northwest Alaska ANCSA corporation wrote.
Looking beyond Red Dog
Future mineral opportunities within the NANA region include the Anarraaq and Aktigiruq projects Teck is exploring on state lands about 10 miles northwest of Red Dog.
Among the largest undeveloped zinc deposits on Earth, Aktigiruq has the potential to be a source of ore for the Red Dog mill for 25 to 50 years beyond 2031, at current production rates.
While an industry-compliant resource has yet to be defined for this deposit, based on the holes drilled, along with other geological and geophysical evidence, Teck estimates Aktigiruq hosts 80 to 150 metric tons of material averaging 16 to 18% combined zinc and lead.
"These mineral resources are not on NANA land; however, the benefits from jobs and revenue to the NAB would continue, including ongoing use of some of the Red Dog facilities," NANA penned in its summer update.
Although exploration drilling was carried out at Anarraaq and Aktigiruq last year, the program was temporarily suspended in January 2020. This is a strategic pause while Teck awaits permits for the exploration access road.
Work that is continuing includes analyzing core samples from the 2019 Anarraaq-Aktigiruq drill program, planning for future scoping studies, advancing permitting and engaging with communities of interest to provide updates and address any concerns about the program.
Mineral-rich Upper Kobuk
Upper Kobuk Mineral Projects (UKMP), which includes the Bornite copper-cobalt project on NANA lands, is another source of mineral-related jobs and potentially future mines in the region.
In 2011, the NANA board approved a unique exploration agreement with NovaCopper (now Trilogy Metals Inc.) that joined NANA lands and state lands in the Ambler mining district. This combined land package, which covers some 426,690 acres, is what is now considered the Upper Kobuk Mineral Projects.
Since 2011, Trilogy Metals has invested roughly $145 million in UKMP, which has provided hundreds of jobs and millions of dollars in shareholder wages.
In late 2019, South32 Ltd. and Trilogy Metals announced a joint venture partnership that included an additional $145 million contribution from South32 to the project. In February 2020, the joint venture was completed under the name, Ambler Metals Inc.
Earlier this month, Ambler Metals announced that the 2020 program at UKMP 2020 summer exploration program has been cancelled due to the COVID-19 pandemic.
"Ambler Metals gave due consideration to the merits of carrying out an abridged work program at the UKMP. However, given the continued uncertainty resulting from COVID-19, ongoing safety concerns (despite added safety protocols including physical distancing, protective equipment and testing) and the fact that, due to COVID-19, the planned field season had already been delayed to the point at which any field season would provide limited critical path benefits, the decision has been made not to proceed with a 2020 field season," Trilogy Metals penned in a July 8 statement.
The company said that it is disappointed that the deferred field program will affect the Northwest Alaska residents that would have worked at the project this summer.
Ambler Metals does not expect the suspension of the 2020 filed program to delay the overall development timeline for UKMP.
A feasibility study for developing a mine at Arctic, which is on state lands at UKMP, does not require any further field data and is on pace to be finalized in the third quarter of this year.
A 2018 prefeasibility study for Arctic detailed plans for an open-pit mine and a 10,000-metric-ton-per-day mill that is expected to produce more than 159 million pounds of copper, 199 million lb of zinc, 33 million lb of lead, 30,600 ounces of gold and 3.3 million oz of silver annually over a 12-year mine-life.
Ambler Metals and NANA will continue to update and work with the upper Kobuk communities on the best path forward for future field seasons.
"The resources present in the Ambler Mining District, which includes UKMP, may provide a means to maintain a sustainable economy, improve communication connectivity and lower the costs of living for generations into the future," NANA wrote.
Developing mines at Arctic, Bornite and the other metal-rich prospects at UKMP will require road access to economically transport concentrates.
The Alaska Industrial Development and Export Authority (AIDEA) proposes to construct a new 211-mile-long gravel access road in the southern Brooks Range foothills to provide industrial access to the Ambler Mining District. The project is called the Ambler Mining District Industrial Access Project (AMDIAP). The road would originate at the Dalton Highway near Prospect Creek and end at the Ambler Mining District and would have no public access.
In the next couple months, the Bureau of Land Management (BLM) and U.S. Army Corps of Engineers is expected to issue a record of decision on the final phase of the permitting process for AMDIAP.
In addition to working with mining and mineral exploration partners, NANA continues to carry out its own exploration for gold and base metals on NANA and state lands on the northern Seward Peninsula for gold and base metals. NANA's 2020 field program, however, has been suspended due to COVID-19-related concerns.