$34.5 billion gold discovery made in Yakutat

An out-of-state investment company is causing controversy in Yakutat after it staked hundreds of mining claims on sacred Native sites and around river systems that have driven the community's economy for generations.

Oklahoma City-based Geohedral LLC announced last week that it staked 521 new claims that could yield billions of dollars of gold on 10,420 acres, which adds to a 48,000-acre block it claimed last year.

"We think it's a world class discovery," said Herb Mee Jr., president of The Beard Co., a stakeholder in Geohedral.

The companies were testing the area this summer and estimate the claims possess around 34.8 million ounces of gold.

"A 2-million-ounce discovery is considered a significant discovery, so 17.4 times that amount would obviously be a very significant discovery," Mee said.

At $990 per ounce in today's market, the gold is valued at about $34.5 billion. Geohedral estimates there is a significant amount of silver within the claims, too, but the price of silver is a lot lower than the price of gold, he said.

The company is now looking for mining industry partners to move forward with the project. It is still unclear right now how the company intends to extract the gold from the area but has said it will do it properly, Mee said.

"We envision no environmental problems in what we will be doing," he said.

Larry Powell, chairman of the Yakutat Salmon Board and the town's mayor from 1971 to 1992, said he was unsure how mining operations of this scope could not have environmental impacts.

"It's hard for me to see how water systems and fish in particular, but other types of water fowl, can possibly coexist with a huge open pit mine right in the middle of some of the most prolific drainages for fisheries habitat, fisheries production, anywhere that I know of," he said.

The rivers, particularly the Situk and Alsek, support fisheries that have been the economic backbone of the community for years through commercial, sport and subsistence fishing. The Situk River, which is adjacent to some of the claims, is known to fishermen throughout the world for its steelhead run.

"There are a number of drainages down in that area, small creeks, and all of them have salmon, primarily sockeye, small runs of Chinook, pink salmon, and most of those creeks also have resident cutthroat and rainbow trout in them," said Gordie Woods, the commercial fisheries biologist in Yakutat for the Alaska Department of Fish and Game.

Woods called the area "extremely complex" and is unsure how the company could mine the claims with no effect on the ecosystem, particularly because he hasn't seen them produce a detailed plan on how they intend to do it.

"You can't be for or against them until you know what exactly they intend to do," he said. "For all I know they may have some kind of extraction process that would be not intrusive to the environment. I don't understand how that could be, but I'm not a miner. We're all waiting on more information."

Bill Lucey, a member of the Yakutat Salmon Board and the coastal planner for the borough, also has not seen a plan. During a public meeting this summer, the company had even discussed using blimps to extract the gold ore from the areas difficult to reach, he said.

"There are definitely some people who see it as job creation and there are other people that it could have some pretty adverse impact to," he said.

Raymond Sensmeier, a subsistence and commercial fisherman and member of the Yakutat Tlingit Tribe Council, said many Natives are worried about the impact the potential mining could have on the environment and the sacred areas to the local clans.

"We're deeply concerned and wondering what we can do to prevent something like this from happening," he said. "It's an outrage for the Native community, not to mention all those rivers our fishermen fish. We have been a fishing community for hundreds and probably thousands of years."

The company has staked claims over subsistence sites and village sites that have been identified but have yet to be documented, Sensmeier said.

"This is like a tsunami coming," he said. "The magnitude of it is just staggering to us."

Sensmeier said the company has also given the tribal council varied stories about its intentions and claimed significantly more area than they first said they intended.

There is no time frame for when mining could proceed in the area due to environmental regulations, said Lee Benson, the Yakutat District Ranger for the U.S. Forest Service. The company would have to submit a plan of operations and it would require an environmental impact statement to be done. There would also be a number of city, state and federal permits that would need to be secured.

"They are only doing exploration at this point. No actual mining operation has been proposed," Benson said. "So it's really too early to comment on any actual mining operation. They have done a pretty extensive effort at staking claims."

The mining operation would be beneficial for everybody in Alaska, Mee said.

"We look forward to getting it started," he said. "It will probably take a couple of years to get it permitted before we could mine it. We're a little ways off from that. It's going to be something that is going to benefit the state of Alaska to a tremendous degree."

• Contact reporter Eric Morrison at 523-2269 or eric.morrison@juneauempire.com.