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Beard's original Yakutat gold claims may not pan out

Posted: Tuesday, October 19, 2010

In September of 2009 Beard Co., owner of Geohedral LLC, announced significant gold discoveries in the Borough of Yakutat that could be mined. The company has since announced that those original claims may not be the case, leaving the small borough to wonder if there will be a mine in its future at all.

Beard employees originally projected a claim of around 34 million ounces. Juneau Empire archives reveal this claim met with immediate skepticism. Since then, independent surveys have not found the mineral amounts originally claimed.

A Beard Co. press release announcing the operating results from second quarter and first half of 2010 states, "The initial assays of samples from Geohedral's mining claims, conducted independently by Dr. Jan Cannon, indicated significant quantities of gold, silver, magnetite and ilmenite. Geohedral conducted several initial surveys in the Tanis Mesa claims, which also indicated significant quantities of gold and silver. Geohedral has since engaged several independent laboratories to conduct assays of its mining claims in order to verify the results of Dr. Cannon's initial assays and the assays conducted on Tanis Mesa. To date, results from the independent assays have not correlated with the results of the initial assays. In fact, these subsequent assays failed to indicate commercial quantities of gold or silver in any of Geohedral's present claims and have shown significantly less magnetite and ilmenite within the Black Sands area than was documented previously."

Cannon was one of Geohedral's original founders.

Beard Co. president and chief financial officer Herb Mee declined to comment on the issue.

Yakutat Borough manager Skip Ryman said the company was very optimistic when it first started surveying the area about 45 miles east of Yakutat proper. He said they still needed independent verification.

Ryman said he's known of reports since then declaiming the mineral amounts, but the question of future mining is still open until Geohedral makes a conclusive decision.

He said the Black Sands area might contain minerals but he couldn't tell how much.

"The borough's perspective is we're going to let things take their natural course," he said.

Bill Lucey, staff biologist and coastal planner for Yakutat, said he figured there was not enough materials in the area to justify Beard's original announced plans.

"I'm not opposed to mining, but this is not a responsible place to do it," he said.

The release states, "Geohedral is currently attempting to raise additional capital to extend portions of its leases and complete further exploratory work, but the project must be considered speculative at this point."

"We're all very curious here. There's exciting news because it's talking about tens of millions of dollars and jobs that could be brought in here, but it's discouraging that those results aren't born out by independents," Ryman said.

Lucey agreed that the employment prospect in Beard's original proposal was one of the biggest draws. "A lot of people still don't want to see it mined but want to see jobs."

The original mining prospects stirred some controversy at first. Ryman said those arguments stemmed because the work would be done on Native lands that are not yet conveyed to Sealaska.

"My guess is there would be many negotiations between companies," he said about if further assays revealed more minerals.

He said that while the issue of Native lands would still be relevant, more controversy would stem from how Beard would transport ore from the proposed site as well as environmental issues concerning how the company would access ore on Tanis Mesa plus the ore's tailing impacts.

"All that would come put through the NEPA (National Environmental Policy Act) process," he said. NEPA would demand an Environmental Impact Statement on all mining.

He said other issues that would need to be addressed are the impact on commercial fishing and big game hunting.

Lucey said his biggest concern was if the Beard ever did decide to mine there that it be done in a responsible manner.

Lucey said the issue isn't thought of much locally since suspicions and reports of the original gold amount's overestimation began almost a year ago.

"A lot of feeling around town is they made this big claim and got their stocks to go up," he said. Lucey said he believes the whole thing may possibly have been a scheme to raise stock prices enough to sell them before they dropped.

Beard stock sold on NASDAQ at high point of $8.30 at closing on Nov. 10, 2009. It has steadily declined since then. It sold on NASDAQ for 65 cents at closing Monday.

"Some groups in town are looking at long-term protections so this doesn't happen again," Lucey said.

Mee had no comment on the stocks either other than to say the release's aforementioned statement about Geohedral raising capital for further assays and that the project is currently speculative explains why the stock price has dropped.

Beard's filings with the U.S. Securities and Exchange Commission do not indicate irregular trading.

• Contact reporter Jonathan Grass at 523-2276 or at jonathan.grass@juneauempire.com.



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