Company puts its Tulsequah mine on hold

Redfern says mine can't be financed due to higher construction, operating costs

Posted: Thursday, May 19, 2005

Redfern Resources Corp. announced it is putting the proposed Tulsequah Chief mine northeast of Juneau on hold, pending further mineral exploration.

In its current state, the mine cannot be financed, according to Redfern officials. The preliminary results of a feasibility update begun in late winter show high construction and operating costs and a reduced mineral resource estimate.

The Tulsequah mine includes proven reserves of gold, silver, copper and zinc, 40 miles from Juneau in the British Columbia reaches of the Taku River watershed.

"It's a bit of a step back," Redfern president Terry Chandler said of the decision. "We have to make it perform better economically."

The project, which still hasn't received approval at the Canadian national level, may be set back a year or two, said Ed Fogels, large mine permit coordinator for the Alaska Department of Natural Resources.

Some of the mine's critics in Southeast Alaska said Wednesday the delay may also be an opportunity to create an international watershed protection plan for the Taku River, origin of chinook, coho and sockeye salmon fished by Juneau gillnetters and trollers.

Upon hearing of the delay of the project, Rep. Beth Kerttula, D-Juneau, said she would look into the renewed possibility of an international accord to protect the river.

So far, Canadian officials have rebuffed invitations from U.S. officials to initiate those discussions.

Mineral developments including the Tulsequah mine present "such a danger to the fisheries," Kerttula said.

Ever since Redfern began planning to redevelop the historic Tulsequah Chief mine, which is leaching toxic effluent into the Tulsequah River, fishermen, environmentalists and Native tribes on both sides of the U.S.-Canada border have been questioning or opposing it.

The Canadian Supreme Court recently turned down an appeal by the Taku River Tlingit Nation to reject the Tulsequah mine's environmental review.

Southeast Alaska gillnetters say they aren't opposed to mining in general, but they draw the line where it could harm salmon habitat.

"I'd like to be able to fish for another 20 years," said Norm Hughes, a Taku River gillnetter and vice president of the United Southeast Alaska Gillnetters Association. "Mines don't have a real good track record."

It now appears that economics have temporarily accomplished what the mine's critics have not been able to do.

"Now even Redfern realizes they have a problem on their hands," said Juneau environmentalist Chris Zimmer, an adamant critic of the mine. "It would have been nice if they had done this before they ran us through this long, torturous environmental assessment process."

Chandler, of Redfern, said he hopes to begin further exploration to increase the mine's mineral reserves this summer. That's the most obvious way to increase the feasibility of the project, he said.

But the company needs to come up with the funding and, due to a frenzy of mineral exploration occurring across the globe, drilling contractors are in short supply, Chandler said.

"We are obviously going to work to get the additional exploration done as soon as it is practical," he said.

Meanwhile, the company is attempting to install a rudimentary treatment system for toxic waste that is leaching into the Tulsequah River, a tributary of the Taku.

Chandler said he hopes to finish installing the system by the end of June. "Then, we'll only have a skeleton crew at the site until we are successful in getting the funds together for the drilling program."

Fogels, the Alaska regulator, said the treatment system was designed as an interim solution until the mine began operating.

"If it doesn't, there's a big question of what happens next. It's in our best interests to have the water quality improve," he said.

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