CIRI real estate extends beyond Tikahtnu
Largest Southcentral Alaska landowner owns mineral potential Alaska Native Claims – October 12, 2021
Last updated 10/11/2021 at 12:18pm
With more than half of Alaska's entire population living within its region, Cook Inlet Region Inc., more commonly known as CIRI, is the most metropolitan of the 12 landholding Alaska Native regional corporations.
While CIRI has leveraged its urban position with retail developments such as Tikahtnu Commons, an enormous retail and entertainment center on the outskirts of Anchorage, the Southcentral Alaska regional corporation also has oil and gas, renewable energy, and mining interests in and around Cook Inlet and beyond.
"CIRI is the largest landowner in Southcentral Alaska and has selected lands over the years with mineral potential," CIRI Corporate Affairs Director Ethan Tyler told Data Mine North.
These mineral properties include the Johnson Tract property on the west side of Cook Inlet, one of the most exciting Alaska gold exploration stories.
And additional enticing mineral projects on CIRI lands will likely emerge in the near future.
"There has been cursory analysis of development potential on many of these lands and the company will continue to evaluate what properties might be ripe for exploration in the future," said Tyler.
Farewell, a base, precious and critical metals property in the western Alaska Range, is one CIRI-owned land package on the horizon.
Cook Inlet Land Exchange
Much like global metropolises, the CIRI region is the melting pot for Alaska's First People.
In addition to the Dena'ina and Ahtna Athabascan's who originally settled along the shores of Tikahtnu – the traditional Dena'ina name for Cook Inlet – Tlingit, Haida, Inupiat, Yup'ik, Alutiiq, and Aleut people from every corner of Alaska have moved to Southcentral Alaska over the past century. Many of these new Tikahtnu residents became CIRI shareholders following the 1971 passage of the Alaska Native Claims Settlement Act (ANCSA).
This diversity is reflected in CIRI's corporate vision – "A corporation rooted in the heritage and cultures of our shareholders, working toward a future where Alaska Native people thrive." – which looks beyond its own regional interests and to the wellbeing of all First People across the state.
Ensuring a future where Alaska Native people thrive, however, begins with CIRI's own success and ensuring that its shareholders flourish.
One measure of this success that CIRI is particularly proud of is the well over $1 billion in dividends and other distributions to shareholders over the years.
The Southcentral Alaska ANCSA corporation said its ability to pay out so much in dividends is rooted in "a team of young, forward-thinking people who sought to get a fair deal for their company" during CIRI's forming years.
While being located at the hub of Alaska's economic activity is something CIRI has been able to leverage to its advantage, getting a fair lands deal in Alaska's population center was a formidable challenge for CIRI's early leaders.
Upon passage of ANCSA, CIRI was entitled to 1.25 million acres of land and 2.25 million acres of subsurface estate within its region. Much of the prime real estate around Cook Inlet, however, was already in private hands, tied up by state interests, or claimed by the federal government for things like military bases.
This left CIRI with "mountaintops and glaciers" as its choices when selecting the real estate promised to form the economic foundation for the corporation.
"A lot of the land that had been prescribed for our selection by the act had already been given away... (and) the Secretary of the Interior said that since there was no other land available, CIRI would just have to make its selections from mountainous and glaciated areas around Cook Inlet," Roy Huhndorf, president of CIRI from 1975 to 1995, recalled.
Undaunted, the early CIRI leaders fought hard for the resource-rich lands they felt they deserved under ANCSA. Both federal and state landowners were reluctant to cede properties around Cook Inlet, resulting in nearly five years of court battles and negotiations for CIRI's early leadership. This tenacity resulted in the Cook Inlet Land Exchange, one of the largest land swaps in U.S. history, which laid the foundation for CIRI's success.
"CIRI's early leaders, those who negotiated the Cook Inlet Land Exchange, saw the need to move quickly and courageously," said Margie Brown, who worked in CIRI's land department from 1976 to 1995 and served as the corporation's president and CEO from 2005 to 2012. "CIRI's mission was, and is, to generate revenue to improve the social and economic status of its shareholders for generations to come."
The work needed to fulfill this mission, however, did not end with the land exchange.
After some strategic land selections in oil and gas-rich areas of Cook Inlet, CIRI's early leaders continued to show tenacity and savvy in ensuring that the ANCSA corporation (and the state) received its fair share of royalties from oil and gas production from its lands in Tikahtnu.
"Because CIRI fought for its rightful entitlement, the company was able to select valuable lands that would, over time, bring in hundreds of millions of dollars, providing CIRI a strong financial foundation early on," said Brown,
That strong financial foundation during CIRI's early years also helped to ensure the solvency of many of the other Alaska Native regional and village corporations around the state, thanks to special provisions of ANCSA known as sections 7(i) and 7(j).
ANCSA Section 7(i) requires regional corporations to distribute 70% of net revenues from resource development on ANCSA land among all 12 regional corporations. Under Section 7(j), half of the 7(i) payments received must be distributed to the respective village corporations within each of the ANCSA regions.
"We are not the biggest 7(i) distributor, but we were the earliest, and a significant contributor to allowing corporations to actually stay in existence," says Brown.
In addition to giving their fellow ANCSA corporations an early financial boost, the early revenues from Kenai and other oil and gas fields in the Cook Inlet area provided a foundation for CIRI's success.
"Growing a company organically is a slow slog, a hard process," Brown said. "But with oil and gas revenues coming in so early, even though we were sending a lot out by way of 7(i) distributions, the amount we kept was significant, and we could use those revenues, and we did use those for other investments, whether it was into radio and T.V. stations or real estate-they provided the underpinning that allowed us to go out and do business in other arenas much earlier than others were able to do."
High-grade gold at Johnson Tract
While the efforts of Brown and other early CIRI leaders were focused largely on securing oil and gas interests, they also picked up some interesting hardrock mineral properties.
One of these properties, Johnson Tract, has emerged as one of the most exciting mineral exploration stories in Alaska during 2019.
Situated about six miles west of Cook Inlet and roughly 125 miles southwest of Anchorage, the 20,942-acre Johnson Tract property hosts high-grade gold deposits that are further enriched by associated silver, copper, zinc, and lead.
CIRI recognized the rich mineral potential of Johnson Tract during the ANCSA land selection process and claimed this gold-rich property in 1976.
This package of private lands is situated within the Lake Clark National Park.
As part of its land selection, CIRI was granted special rights, ratified by U.S. Congress and approved by the Alaska Legislature, that ensures transportation and port easements through Lake Clark National Park for the development of the rich mineral potential at Johnson Tract.
"CIRI enabled the creation of the park with an exchange of land originally outlined in ANCSA for the Johnson subsurface and surface rights on the south tract and subsurface rights on the north tract," Tyler told Data Mine North.
In 1981, Anaconda Minerals signed a joint venture agreement with CIRI to evaluate the precious and base metals potential identified across these tracts of land.
Exploration under this JV led to the discovery of the JT deposit in 1982. The JT discovery hole cut 102.6 meters averaging 10.94 grams per metric ton gold, 8.01% zinc, 0.75% copper, 2.13% lead, and 8.5 g/t silver, including 50 meters grading 20 g/t gold, 9.4% zinc, 1% copper, 2.8% lead, and 12.7 g/t silver.
This was an enticing find, considering the high grades of multiple metals over such wide widths.
Mining this rich discovery nearly became a reality when Westmin Resources Ltd. optioned Johnson Tract in the 1990s.
Based on 88 holes drilled prior to 1995, Westmin calculated that Johnson Tract hosted 1.04 million metric tons of resource averaging 10.05 g/t gold, 7.63 g/t silver, 8.32% zinc, and 1.13% lead.
Westmin contemplated shipping ore mined from Johnson Tract to the operating mill at its Premier Mine in northwestern British Columbia. Both properties are near tidewater, which would have made shipping the high-grade ore to its already operating mill on the east side of the Gulf of Alaska fairly inexpensive.
Weak gold prices at the time, however, made the plan infeasible and Westmin's lease on this highly prospective property expired.
After being lost to obscurity for two decades, Johnson Tract reemerged on the Alaska exploration scene with HighGold Mining Inc. entering into a lease agreement with CIRI in 2019.
The lease agreement between HighGold and CIRI has an initial 10-year term for the exploration and other studies needed to advance the gold-rich project to a mine construction decision, followed by a five-year development term, and then a production term that will continue for as long as mining continues.
Minimum exploration expenditure and annual lease payments are required to maintain the lease until production. Considering the large exploration programs already carried out by HighGold, however, the $10 million minimum exploration requirement is now a moot point.
"We already exceeded that," said HighGold Mining CEO Darwin Green.
Based on just the first nine holes drilled in 2019, the JT deposit at Johnson Tract hosts 2.14 million metric tons of indicated resource averaging 6.07 grams per metric ton (417,000 ounces) gold, 5.8 g/t (397,000 oz) silver, 5.85% (275.3 million pounds) zinc, 0.57% (26.8 million lb) copper, and 0.71% (37.6 million lb) lead.
During 2020, HighGold completed roughly 17,000 meters of drilling and is on pace for another 20,000 meters this year. This exploration is both expanding the already identified deposit and testing multiple prospects across this rich mineral land early CIRI leaders had the foresight to claim and secure access to.
CIRI maintains certain net smelter return royalties and a back-in right for up to a 25% participating interest in Johnson Tract at the time a decision to develop a mine on the polymetallic gold project is reached.
Beyond Johnson Tract, Tikahtnu
Johnson Tract is not the only underexplored CIRI-owned mineral property with significant upside potential.
One of the most promising of these properties is Farewell, a property about 160 miles northwest of Anchorage, where a wide variety of precious and base metals have been identified.
Two holes drilled by Anaconda Mining in the 1980s encountered high-grade skarn mineralization at Dall, one of the targets identified at Farewell. One of these holes cut 3.5 meters averaging 11.8 ounces per metric ton (367 g/t) silver, 4% copper, and 1% zinc; the other cut 5.5 meters of 5.7 oz/t (177 g/t) silver, 0.9% copper, and 6% zinc.
Sampling of another Farewell prospect about three miles southeast of the Anaconda holes identified similar mineralization. The average grade of 20 rock samples collected from an outcropping skarn at this target averaged 2.3% copper, 3.4 g/t gold, 33 g/t silver, 0.16% nickel, and 0.07% cobalt.
Both cobalt and nickel are vital ingredients in the lithium-ion batteries used to power electric vehicles and are on the list of metals that the U.S. Geological Survey have deemed critical to the United States.
Airborne geophysical surveys flown over this area in 2008 identified magnetic and electromagnetic anomalies associated with the metals found at surface, indicating a potentially large system rich in precious, base, and critical metals.
CIRI owns both the surface and subsurface rights to this roughly 155-square-mile property beyond the Tikahtnu area.
Farewell is not the only CIRI-owned property with critical metals. In fact, the ANCSA regional corporation's Red Mountain land package near the southern tip of the Kenai Peninsula hosts a historic mine that provided the U.S. with a domestic source of chromium during both World Wars.
Chromium-rich mineralization was discovered in the Red Mountain area around 1910 and some limited mining occurred there during World War I.
Knowing Red Mountain could provide a domestic source of chromium during World War II, the U.S. Bureau of Mines drilled more than thirty holes to evaluate this chromite-rich area near the Southcentral Alaska town of Seldovia. This exploration resulted in development and mining at Chrome Queen and other orebodies discovered over a four-mile-long area at Red Mountain.
From 1943 through 1958, an estimated 26,000 short tons of ore averaging roughly 40% chrome oxide was mined from Chrome Queen and other mines at Red Mountain.
Past investigations have identified 33 deposits at Red Mountain that contain an estimated 1.5 million tons of chrome oxide.
A vital ingredient in stainless steel and superalloys, the U.S. Geological Survey considers chromium "one of the nation's most important strategic and critical materials." As such, chromium is on the USGS's list of 35 minerals and metals considered critical to America's economic and national security.
Whether it be critical metals within the CIRI region or base and precious metals beyond Tikahtnu, CIRI invites companies with excellent reputations for responsible exploration and development to take a closer look at the mineral-rich lands they have to offer.
"We welcome partnerships with companies with solid reputations as good operators who produce results," Tyler said.