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KETCHIKAN - A Canadian mining company is seeking state permits for a two-year underground exploration program for gold and other minerals at Moira Sound on Prince of Wales Island.
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A 30-day public review and comment period regarding the state's draft permits for the project proposed by Niblack Mining Corp. began April 23.
"The company is well-financed, having recently raised over $15 million, has key personnel in place, and expects to award the underground development contract in the next few weeks," said Paddy Nicol, president of the Vancouver, British Columbia-based firm.
Groundbreaking is anticipated early this summer. Nicol emphasized that the proposal is for an exploration project, not a mine.
The company's property is located on the southeast side of Prince of Wales about 30 miles from Ketchikan. It's known to contain gold, copper, silver and zinc.
The parcel is about 2,000 acres. Niblack Mining owns 230 acres of surface and mineral rights, Nicol said. The remaining acreage is mineral claims on state land surrounding the private land.
The overall goal of the underground exploration is to further define the potential size of mineral deposits.
As proposed, the project would consist of about 6,000 feet of underground tunneling, and probably an additional 25,000 to 30,000 feet of drill exploration using industrial diamond-encrusted drill bits, according to Nicol.
"All of the underground activity will take place on the private ground," he said. "It will not take place on the state ground."
The prospect was discovered in the late 1800s, and about 50,000 tons of copper ore was mined there between 1905 and 1908, according to the company. Exploration resumed in the 1970s.
Abacus Mining & Exploration Corp. bought the site in 1995, and conducted an approximately $8.5 million exploratory drilling program through 1997. But Nicol said exploration ended because of downturns in mineral commodity markets during the late 1990s.
By 1999, the price of gold fell to about $250 an ounce, but last week was trading about $680 an ounce. Nicol said the value of other minerals also has grown.
In 2004, Abacus spun off Niblack Mining Corp. as a stand-alone company to focus on the Niblack property.