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Pebble prospects looking good

Accessibility of metal-bearing ore key to mine's success — if permitting hurdle overcome

Posted: Sunday, September 18, 2005

The howling winds buffeting the light helicopter heading out of Iliamna across the Newhalen River on its way to Northern Dynasty Mines' Pebble Project site should cause no pause.

"The more air under the rotor, the better," NDM's Chief Operating Officer Bruce Jenkins comments over the cabin intercom.

Ahead lies a broad expanse of rolling tundra bejeweled by a scattering of small gleaming ponds nesting in shallow depressions on impermeable ground.

The helicopter passes over the location of a future bridge that one day will span the Newhalen River, part of a road to the mine. A few miles on, Jenkins points down at a couple of active test-drilling sites dwarfed by the landscape.

Shortly thereafter, the chopper cruises low over a bare hilltop, site of a future ore processing mill where rock from the giant open-pit mine will be crushed to the consistency of sand, separated as much as possible from waste, and sent as slurry down a pipeline to tidewater in Cook Inlet, where it will be dewatered, loaded aboard ships and dispatched, most likely to foreign smelters.

After alighting gently on a nearby mountain, Jenkins leaves the chopper and walks to the edge of the slope, buffeted by the sustained gale-force winds that sweep the ridge. To the northeast, he points out the future open-pit mine site. When fully functioning, it could be two miles long and a mile and a half wide. To the southeast, he points out an area that eventually will be covered by tailings and the water that would cover those.

Leaning into the wind, Jenkins directs attention straight eastward to a far hilltop. Across the valley between will be erected over the life of the mine an enormous earthen embankment built from mine rock that will separate the mine from its tailings repository. A small manmade mountain, it will stretch approximately three miles long, stand 700 feet tall and spread 1,000 feet wide at its base, forming the northern boundary of the tailings depository.

Flying south takes the helicopter down the center of the tailings area and over the future site of another embankment, this one even larger, whose V-shape will create the southern boundary of a depository that one day could cover more than 10 square miles. The embankments will attach to natural high ground forming the remainder of the depository surround.

Engage Jenkins in a conversation about the mine project and his passion for it becomes immediately apparent. It's the largest project he's ever headed up, and indeed, would be one of the largest such mines ever built in North America if it comes to fruition.

"I enjoy my job. And the reason is that I want to make a difference," he said.

It also means doing it right, he said.

"I mean look, I'm a father. I have four kids, 17-year-old twins boys, a 13-year-old son and 9-year-old daughter. I want them to inherit the opportunity in the future to travel to Alaska and see this beautiful area," he said. "And they will. I am a responsible father as well as a mining executive."

Respect for children and for the environment are fundamental values, he said, adding that he firmly believes in the responsible use of "the gifts God" has bestowed.

"Those are passionate commitments I have as part of my being," he said. "It shows in the project design team. Ask any of them."

That design team has its work cut out, but the payoff could be enormous. The latest assays of 2004 drill material have exceeded earlier estimates.

"Simply put, we have measured, indicated and inferred categories amounting to a lot more than we thought. We have in excess of 4 billion tons of ore. Of that, in metal content, we expect in the neighborhood of 33 million ounces of gold," he said.

Nice neighborhood. It's also a step uptown from the 26.5 million ounces estimated earlier.

"We also have about 22 billion pounds of copper (up from an earlier estimate of 16.5 billion) and about 1 billion pounds of molybdenum," he said.

There's a bit of silver thrown into the mix, as well.

A growing worldwide demand for the metals to be mined at Pebble have NDM officials more than optimistic.

China will be a big market, Jenkins notes.

"It is a rapidly growing and emerging country in a real, headlong rush in creating a middle class. Its economy will be a big factor in influencing the price of metals," he said.

In addition, an emerging middle class across the globe is pushing an expanding demand for gold jewelry. Indeed, the environmental organization Oxfam America reports that some 80 percent of all gold mined in the world goes to make jewelry. Experts, says Jenkins, are predicting a continued rise in metals prices generally.

Another plus is simple supply and demand. Even with all the mining going on in the world, there is not enough production to meet the current demand for metals.

"I was reading just last week the suggestion that we need 10 to 20 more Pebbles — those kinds of metals — to meet the smelter demand," he said. "They're not out there. They're not being found."

But breaking ground on Pebble is still years away, Jenkins said. Even applying for permits is two or more years down the road. It could be seven years or more before the mine starts operating, presuming permitting goes smoothly.

Ahead of that will be exhaustive and public reviews of the design and justifications for issuing permits.

If it all works, the several hundred people currently engaged in mining preparations, a majority of them Alaskans or Americans, could become as many as 2,000 while the mine is built. Once operating, there could be 1,000 steady jobs for its expected 30- to 50-year life.



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