Size of company's Yakutat gold mine claim questioned

34.8 million ounces of gold highly unlikely, mining experts say

Posted: Friday, November 27, 2009

A massive gold mining claim near Yakutat by an out-of-state company has proven to be not only controversial but also questionable in its legitimacy, according to officials.

Robert Johnson / For The Juneau Empire
Robert Johnson / For The Juneau Empire

Oklahoma City-based Geohedral LLC announced in September that it had staked hundreds of mining claims in the forelands around Yakutat and estimates the claims possess around 34.8 million ounces of gold, potentially worth billions of dollars. The proposed area covers more than 60,000 acres and would require a placer mining operation because of the geologic makeup of the forelands, which makes the volume of gold somewhat suspect, experts say.

"In the entire history of the state of Alaska, there has only been about 24 million ounces of gold produced from placer deposits," said John Kato, Alaska geologist for the U.S. Forest Service. "So it's a bit of a leap of the imagination to assume that there might be 34 million (ounces) ... out on the flats there in Yakutat."

There is no doubt that there is gold in the area, but the amount Geohedral has claimed is unlikely, Kato said. Besides, the cost of extracting the gold would likely far outweigh the financial gains, he added.

Several messages left with Geohedral this week were not returned.

The mining proposal has grown controversial because some of the claims are on sacred Native sites and surround the complex river systems that have been the economic engine of the community for generations. The rivers, particularly the Situk and Alsek, support world-class fisheries used by commercial, sport and subsistence anglers.

Several Native organizations have voiced concern about the potential environmental impacts any mining would have on the complicated ecosystem of the area, particularly its salmon. On Tuesday night the Yakutat Tlingit Tribe passed a resolution discouraging any exploration or mining activities in the forelands that could negatively impact the "traditional hunting, fishing, resource, historical sites and resting grounds of our ancestors."

"We are concerned about the resources," YTT President Victoria Demmert said Wednesday.

When asked to elaborate on her concerns, Demmert said she thinks it is quite obvious what the tribe is worried about.

"We are the stewards of the land and we are concerned about all of the resources," she said. "We use all of them. If they're decimated, what's going to be left for the next generation?"

Last month the Alaska Native Brotherhood Grand Camp also passed a resolution against any mining activity in the Yakutat forelands. The National Congress of American Indians also passed a similar resolution opposing mining on the more than 91-square-mile area of claims that lie between the Coastal Mountains and the Gulf of Alaska.

Kerwin Krause, the mineral property manager for the Division of Mining, Land and Water for the Alaska Department of Natural Resources, said he doesn't believe the data gathered by the consultants hired by Geohedral is anywhere near accurate. The consultants did not have an extensive background in mining or geology and used hand tools for a "reconnaissance level sampling," as opposed to mechanized power tools, he said.

"The efficiency from your results is highly questionable, the way they did it," Krause said.

It is curious how the company decided on announcing it found around 34.8 million ounces of gold within its claims, he said.

"That's a screwy number," Krause said. "It's worse than just blindfold-with-a-dart type of thing. I don't know why they came up with that, but there's no basis."

Geohedral originally contacted the Forest Service several years ago about other heavy minerals around Yakutat it could extract, particularly iron ore, Kato said.

"When the iron issue arose a few years back, I thought that was much more operable than the gold," he said.

Iron used for steel was highly valuable several years ago on the world market when construction was booming around the globe, Kato said, but since the economic downturn the demand for iron ore has diminished.

"So iron wasn't sexy anymore, but all of a sudden gold is sexy, right? So all of a sudden we see these somewhat outlandish claims from them," Kato said. "So it makes one suspect. They're looking for money, basically."

Geohedral President Herb Mee, Jr. told the Juneau Empire in September that it is not a mining company and Geohedral was looking for a company with mining experience to partner with to help extract the gold.

It would likely take years to begin any mining operations in the Yakutat forelands due to permitting requirements under the National Environmental Protection Act, Kato said, and he is not holding his breath for mining to begin in the Yakutat area. But he also isn't ruling out the possibility of it happening in the future.

"It takes a lot of money to file that many mining claims and maintain them," he said. "So that shows somewhat of a serious intent. Maybe they are looking to weather out the economic downturn and the iron might be much more viable."

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



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