December 2007 edition of North of 60 Mining News inside Petroleum News

Vol. 12, No. 52 • www.PetroleumNews.com A weekly oil & gas newspaper based in Anchorage, Alaska Week of December 30, 2007 • $1.50

● NATURAL GAS Nabors 106E drills first well Time to think huge JUDY PATRICK JUDY Economist tells industry execs LNG is their ‘friend’ provided they can adapt

By GARY PARK A similar view was expressed by For Petroleum News TransCanada Chief Executive Officer Hal hose trying to get a handle on global energy Kvisle, who argues that because of LNG’s trends could use England’s industrial revolu- mobility, it will be delivered to North T tion of the late 18th century as a starting America only if prices compete with those point, then extrapolate that into a “super- in Europe and Japan. megatrend,” suggests Peter Tertzakian, chief ener- gy economist at ARC Financial. action. His message for Canadian oil and gas producers “This is not an overnight story,” he said. “But it at a Calgary outlook conference is to start thinking is a story that we’re actually seeing emerging and Pictured above is Nabors new Rig 106E, a new generation, pur- globally and adapt to change as the industry playing out already, sooner than I thought it pose-built, lightweight AC rig that can be broken down into 53 dif- embarks on a permanent reshaping. ferent loads for moving — 38,000 pounds the heaviest. The rig is would.” under contract in Alaska to Chevron and in the above photo is Known for the scope of his thinking, much of it drilling its first well (ever) at the Happy Valley prospect on the captured in his book “A Thousand Barrels a Kenai Peninsula this past October. The rig will begin drilling at Overseas LNG demand rising Chevron's White Hills prospect on the North Slope in January. Second,” Tertzakian told a packed meeting room that the industry is “in a period of change, which Using liquefied natural gas as an example, he can either be discomforting, or seen as an opportu- noted that the commodity, contrary to a widely Southward migration: Precision nity.” held belief, is “our friend.” Drilling places heavy bet on U.S. While conceding that the prospects for 2008 are Although LNG imports into the U.S. will com- not all that positive, and that the days of counting pete with Canadian gas, price will determine how Precision Drilling Trust, Canada’s largest oilfield services on other people to “take care of us” are over, he much reaches North America. company, has added its name to the southward migration, by tried persuading his audience to act on what many Over the past two years, it has become apparent setting a capital budget of C$370 million for 2008 (up 70 per- of them have claimed over the years, that Calgary that LNG demand is rising overseas, especially in cent from 2007) and deciding there is less risk in the United is an international energy center. Japan, the United Kingdom and Spain, where the States than Canada. Suggesting that the longer-term trend for both landed price for LNG is much higher than in North Having increased its U.S. rig fleet to 12 from one in 2007, oil and gas prices is upward, Tertzakian said the America, Tertzakian said. the trust expects the pace of growth to accelerate “with a con- challenge for Canadian companies is to figure out As a result, LNG is selling for almost US$14 how to get a piece of the emerging global energy see HUGE page 9 see BET page 9 ACMP moves to new DNR division ● LAND & LEASING Commissioner Tom Irwin said Dec. 21 that the Alaska Department of State requesting bids Natural Resources has recognized the need to create two offices because of the Competing exploration license proposals wanted; Copper River leases issued magnitude of workloads and complexi- ties of the Alaska Coastal Management By KRISTEN NELSON Program and the Large Project For Petroleum News Management team. The ACMP functions, formerly under he Alaska Division of Oil and Gas said Dec. the Office of Project Management and TOM IRWIN 17 it has received two exploration license pro- Permitting, will be housed in the new T posals which it intends to evaluate and is Division of Coastal and Ocean Management. Randy Bates, requesting competing proposals. Because the formerly deputy director of OPMP, has been named director state is soliciting for competing proposals it is not of the new division. releasing the names of the applicants or provisions Ed Fogels, who has held numerous positions within DNR, of the proposals. including the state’s large mining coordinator, has been One of the proposals is for a gas-only explo- named director of OPMP, which will retain the Large Project ration license for some 21,080 gross acres in the Management team and Alaska National Interest Lands Houston area in Southcentral Alaska. The Houston Conservation Act functions. area application is for state-owned land within —PETROLEUM NEWS township 18 north, range 3 west, sections 1-18 and 20-24; T18N-R4W, sections 1, 2, 11-13; T9N- R3W, sections 31-36; and T19N-R4W, sections, 35-36, all in the Seward Meridian. BREAKING NEWS The area is west-northwest of Anchorage. Houston is just within the southern boundary of the Full speed ahead to Texas: Kinder Morgan joins pipeline 3 exploration area; the southern border skirts the 19E; and T19N, R15-17E, Fairbanks Meridian. contest and new Enbridge-Exxon deal holds open season Susitna River, which is south of the area in the east Crooked Creek runs through the northwest cor- and just within the southern border on the west. ner of the application area, as does the Steese 5 Alaska approves Raven PA: BP-operated northeastern The other proposal is an oil and gas exploration Highway. Prudhoe satellite producing from Ivishak, Sag River at Heald Point license in the Crooked Creek basin northeast of Fairbanks, between the towns of Central and Applications received in April Circle Hot Springs, and the Yukon-Charley Rivers Both applications were received April 30. Turbulent times 6 Risk, change shakes utility investing: National Preserve. This area consists of some Applications are one way the licensing process can have changed how capital is invested in energy infrastructure 161,280 gross acres of state-owned land within township 7 north, ranges 16-19 east; T8N, R16- see BIDS page 11 2 PETROLEUM NEWS • WEEK OF DECEMBER 30, 2007 contents Petroleum News A weekly oil & gas newspaper based in Anchorage, Alaska ON THE COVER EXPLORATION & PRODUCTION Time to think huge 5 State of Alaska approves Raven PA Economist tells industry execs LNG is their BP-operated northeastern Prudhoe Bay satellite 'friend' provided they can adapt producing from Ivishak and Sag River under lease operating agreement at Heald Point FINANCE & ECONOMY 4 Exxon brief outlines Valdez argument GOVERNMENT 10 Committee finds probable cause that Harris broke ethics law State requesting bids Competing exploration license proposals NATURAL GAS wanted; Copper River leases issued 4 AGIA release will be in New Year Southward migration: Precision Drilling PIPELINES & DOWNSTREAM places heavy bet on U.S. 3 Full speed ahead to Texas ACMP moves to new DNR division Kinder Morgan joins pipeline contest and new Enbridge-ExxonMobil partnership holds open season on new project; not all proposals expected to survive UTILITIES 6 Risk, change shakes utility investing

Turbulent times in the utility industry have changed how capital is invested in energy infrastructure, experts tells Alaskans

Nabors 106E drills first well ALTERNATIVE ENERGY 7 Capturing Alaska's winter sun

Cold Climate Housing Research Center: Look for the December Interior Alaska researchers test the energy issue of North of 60 potential of fleeting winter sunlight Mining inside PETROLEUM NEWS • WEEK OF DECEMBER 30, 2007 3

● PIPELINES & DOWNSTREAM Full speed ahead to Texas Kinder Morgan joins pipeline contest and new Enbridge-ExxonMobil partnership holds open season on new project; not all proposals expected to survive

driving oil prices up by US$4 per barrel. By GARY PARK Canadian oil priced at Edmonton For Petroleum News Daniel said Texas Access would expand sells for about C$15 per barrel pipeline infrastructure to “increase the reli- crowded field has become even less than similar oil from Mexico able supply of crude oil to U.S. refineries.” more congested as rival pipeline sold to Houston refineries. “Producers of crude oil from Western A companies jostle for leadership in a Enbridge believes it can deliver Canada’s oil sands, and from the Williston race to ship production from the Canadian crude to Texas for about Basin in North Dakota and Montana will Alberta oil sands to the U.S. Gulf Coast. C$6 per barrel. benefit from low-cost transportation from A partnership of Enbridge and the limited U.S. Midwest to the large Gulf ExxonMobil started soliciting binding Coast refining market. Gulf Coast refiner- commitments from shippers for a US$3 develop a portion of the Chinook system ies and refined products consumers will billion, 768-mile system from Patoka, Ill., that would originate at Cushing, Okla., and benefit from access to reliable, competi- to Texas refineries just a week after Kinder extend to the Gulf Coast refining centers, tively priced new sources of supply.” Morgan proposed a 2,000-mile system although it is not clear who would build through Wyoming and Oklahoma at a cost that connection. Open season closes Feb. 29 A Canadian spokesman for Kinder the company believes will be less than Canadian oil priced at Edmonton sells Morgan said a more accurate cost estimate US$5 billion. for about C$15 per barrel less than simi- will only be possible once engineering and TransCanada and Altex Energy have lar oil from Mexico sold to Houston routing have been completed and that previously staked their claims to open up refineries. Enbridge believes it can deliv- hinges on obtaining commitments from the Texas market for oil sands producers, er Canadian crude to Texas for about C$6 one or more large-scale producers. while BP is contemplating the reversal of per barrel. He said the producers are preoccupied its 600-mile, 100,000 barrels per day line The Texas Access open season closes with calculating the best netback and from Cushing, Okla., to Chicago as a pos- Feb. 29. Until binding commitments are deciding whether that will come from a sible opening phase of giving producers a made no regulatory applications will be direct route, an existing route, expansion of link to Texas. filed. an existing system, or something brand Kinder Morgan Canada Vice President Until now, the most intense part of the new. Bill Henderson said the explanation is sim- rivalry has involved Enbridge and ple: Producers need to have new markets to Enbridge says it will compete TransCanada, the two leading Canadian handle the rising volumes from northern pipeline companies. Alberta, which are expected to roughly Meanwhile, Enbridge Chief Executive TransCanada has received regulatory triple to 3 million bpd over the next seven Officer Patrick Daniel has delivered a blunt clearance to start work on its C$5.2 bil- years. message to his rivals, saying his company lion Keystone system to deliver 430,000 But they are uneasy about locking their has the “lion’s share of crude oil capacity bpd from Alberta to Patoka by the final production into the single outlet offered by expansion out of Western Canada … and quarter of 2009, then extend the line to Enbridge, so they have pressured pipeline won’t sit idly by and watch these new proj- Cushing and boost volumes to 590,000 companies to expand the network and ects (invade that territory). We compete bpd by late 2010. move oil farther afield, taking advantage of strongly for all customers.” Taking a lower profile, but insisting it the fact that their deliveries from Illinois to He noted that Enbridge has C$12 billion remains in the race is privately held Altex Texas are currently limited to 100,000 bpd worth of projects that are secured today and — the first to promote a direct Alberta- of space available on an ExxonMobil another C$14 billion that are under devel- Texas link. pipeline. opment. That C$5 billion venture would cover What isn’t clear is how many of the cur- That includes the on-going Southern about 1,800 miles and carry 300,000 bpd. rent proposals will reach the construction Access program to add 124,000 bpd of Altex Chief Executive Officer Jack stage in the near term. capacity by early 2008, then expanding the Crawford said it has been satisfying to Henderson suggested that probably only connection from Superior, Wis., to Patoka see his company’s ideas “validated … one will proceed immediately, although he by 400,000 bpd in 2009. and we still think we have the inside suggested that the volume profile for the oil The importance of the existing Enbridge track.” sands could see “two, maybe three lines go system was hammered home in November He said the details are in flux because ahead over time.” when an explosion near Clearbrook, Minn., of the stepped up competition, suggesting killed two workers repairing one of the that decisions on contracts will “get made Battle for anchor tenants lines and temporarily halted shipments, pretty quickly.” ● For now, the battle is to win over the hearts and minds of shippers by pinning down anchor tenants. Although late on the scene, Kinder Morgan has an eye on Canadian Natural Resources, which has yet to make a com- mitment to any pipeline for its Horizon production, which is due to come on stream in the third quarter of 2008 at 110,000 bpd, has engineering work under way targeting 232,000 bpd by 2013 and could eventually reach 500,000 bpd. Canadian Natural Senior Vice President of Marketing Real Cusson tossed some cold water on Kinder Morgan’s hopes by leaning in favor of the Enbridge- ExxonMobil proposal to carry 400,000 bpd from Illinois to the Houston region by 2010-11, building the Texas Access Pipeline alongside its existing smaller link. Cusson said Canadian Natural does not normally sign long-term shipping con- tracts, but it is being forced to weigh that against its desire to access the Texas mar- ket, where it can get better prices for its volumes. Kinder Morgan’s planned 300,000 bpd Chinook Pipeline is targeted for a 2012 startup. It has also teamed up with Houston- based Teppco Partners, which is working to 4 PETROLEUM NEWS • WEEK OF DECEMBER 30, 2007

● FINANCE & ECONOMY NATURAL GAS AGIA release will be in New Year Exxon brief outlines Alaska Gov. Sarah Palin said in a Dec. 21 statement that the completeness review of Alaska Gasline Inducement Act applications will not be finished until sometime after Jan. 1. The entities who applied under AGIA have all submitted additional data or clarifications requested by the state gas line team and the team Valdez argument is reviewing the responses, the governor said. Applications for the state inducements to build a gas pipeline to take North THE ASSOCIATED PRESS was meant for ships leaving port with the Slope gas to market are the Alaska Gasline Port Authority, AEnergia LLC, xxon Mobil Corp. says a punitive risk of not being seen by their owners for TransCanada, Sinopec ZPEB and the Alaska Natural Gas Development damages verdict of $2.5 billion for months, if not years. Technological Authority. E one of the worst U.S. oil spills con- advances mean communication is ongo- When the reviews are complete, letters will be issued to each applicant advis- tradicts 200 years of maritime law. ing, they argue. ing whether the applicant has met the statutory requirements for completeness. That is essentially its argument going The company says it took immediate The evaluation phase will begin for those applications meeting the completeness before the U.S. Supreme Court next year, responsibility after the accident and spent test. according to a recent court brief the com- $3.5 billion in compensation, fines and Following the entire completeness review all applications will be made pub- pany filed. cleanup. lic and the public-comment phase of the AGIA process will begin. The Exxon Valdez tanker hit a reef in The company says even the reduced Public comments will be used by the commissioners of Revenue and Natural Prince William Sound and spilled 11 mil- civil judgment of $2.5 billion is excessive Resources in their determination of whether an application proposes a project lion gallons of crude oil that marred more and wants the U.S. Supreme Court to that will sufficiently maximize the benefits to the people of the state and merits than 1,200 miles of coastline in Prince overturn the trial and appellate courts col- issuance of a license under AGIA. William Sound 18 years ago. lective rulings. If the commissioners find that a complete application meets that test, they will The Irving, Texas, oil company has Gov. Sarah Palin has said the state of forward it to the Legislature for approval. been fighting the civil judgment, original- Alaska will file a legal brief supporting —PETROLEUM NEWS ly set at $5 billion, since the 1994 trial. the 33,000 plaintiffs mired in a dispute ExxonMobil has held that it should not with Exxon Mobil. be responsible for the ship’s captain, Palin said Alaska Attorney General Joseph Hazelwood, who the company Talis Colberg will file an amicus brief says violated clear company rules when with the U.S. Supreme Court by early the ship ran aground on March 23, 1989. next year. In its brief, filed Dec. 17, the company Such legal filings reflect backing for asserts: one side of an argument, but come from • Punitive damages should not be someone not directly involved with the “awarded against a ship owner based case. solely on the conduct of a ship’s master.” Exxon has already had such backing • Punitive damages for spills such as from business groups and shipping asso- the Exxon Valdez are “not available in ciations, including the American federal maritime tort actions.” Petroleum Institute and the U.S. Chamber • Maritime law does not permit puni- of Commerce. Both object to the size of tive damages. the verdict. Plaintiffs: law not current The company’s shares rose 64 cents, or 0.7 percent, to $92.07 in afternoon trad- The plaintiffs’ attorneys have argued ing Thursday. that the maritime law Exxon embraces no On the Net: www.exxonmobil.com/cor- longer has current application. Rather, it porate/ and www.supremecourtus.gov/. ● www.PetroleumNews.com

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● EXPLORATION & PRODUCTION State of Alaska approves Raven PA BP-operated northeastern Prudhoe Bay satellite producing from Ivishak and Sag River under lease operating agreement at Heald Point

By KRISTEN NELSON Dec. 23 issue of Petroleum News, The March 1976 Niakuk 1A contains Commission production statistics show Petroleum News www.petroleumnews.com/pnads/65117357 partial cores of Sag River and Ivishak sand- monthly production from Raven in 1.shtml). stone with minor hydrocarbon shows in the November of 42,090 barrels of oil, 101,946 nother Prudhoe Bay unit satellite, Sak River; the Ivishak in this well is barrels of water and 295 million cubic feet Raven on the northeastern edge of the Raven below Niakuk downdip and wet. of natural gas from two producing comple- A unit, has been approved by the state as The Raven reservoirs lie below the The Sag River is faulted out at the tions, with cumulative oil production of 1.57 a participating area. Niakuk oil pool within the boundaries of the Niakuk 4 well drilled in early 1985 but the million barrels of oil, more than half a mil- The Alaska Division of Oil and Gas said Prudhoe Bay unit. The Raven PA is defined Ivishak sandstone was logged and cored. lion barrels of water and 7.7 billion cubic Dec. 21 that it has approved an application by the top Sag River formation structural In March 1985 the Niakuk 5 initially test- feet of natural gas. from BP Exploration (Alaska) — on behalf closure. Seismic coverage over the area was ed 32 API gravity oil from the Sag River for- Natural gas from Raven, other than gas of itself and the other Prudhoe Bay unit shot by Western Geophysical for Sohio/BP mation. extracted as natural gas liquids and blended owners — to form a participating area for in 1986. BP subsequently produced struc- An extended Sag River production test with crude oil for shipment down the trans- the Raven accumulation. ture maps, but the division said: “An uncer- was done from NK-43 in 2001 and pro- Alaska oil pipeline, is used for unit opera- Raven is offshore Heald Point west of tainty resides in the accuracy of any depth duced a high gas-oil-ratio condensate, 49 tions or injected into another formation Endicott. map derived from seismic data for an area degree API, and minor black oil. underlying the unit area. The division said in its decision that the that is located in the onshore-offshore transi- Raven participating area encompasses oil- tion zone, as is the case of the” Raven par- Oil in place Development from Heald Point drill pad bearing sands within the Permo-Triassic ticipating area. The division’s decision does not include BP is developing the Raven PA from the interval, including the Ivishak sandstone and The Raven oil pool correlates with the estimates of how much oil will be produced Heald Point drill pad, used to produce oil Sag River formation underlying the Niakuk interval found at 10,628 feet measured depth from Raven but does contain estimates of and gas from Niakuk. Raven production will Kuparuk reservoir. While the intervening to 11,165 feet measured depth in the BP original oil in place for the Ivishak sand- be processed through the Lisburne Shublik formation may eventually con- Niakuk 5 well. stone of 6.9 million to 11.4 million barrels Production Center. “Raven production will tribute to Raven PA hydrocarbon produc- The division said data in BP’s application and condensate at 2.3 million to 3.8 million be constrained by the gas and water han- tion, the division said “that formation is gen- indicates both the Sag River and Ivishak are barrels for a total of 9.2 million to 15.2 mil- dling capacity at the LPC,” the division said. erally considered to be a low permeability capable of producing hydrocarbons in pay- lion barrels in place. Raven PA water injection will be from carbonate” and no Shublik development is ing quantities. For the Sag River, the OOIP estimate is Lisburne and gas lift gas will be supplied currently planned at Raven. There are numerous small accumulations 3.5 million to 5.8 million barrels, the con- from the Lisburne high-pressure gas injec- There are two producing wells and one of oil and gas tested or produced from the densate 1.3 million to 2.2 million barrels for tion system at the Lisburne L5 drill site. injector in the Raven PA, which has been Ivishak sandstone north of the Prudhoe Bay a total of 4.8 million to 8 million barrels. Raven shares infrastructure support facil- producing under tract operation approval. bounding fault — Northstar, North Prudhoe OOIP totals for the Raven PA are 10.4 ities with the Lisburne participating area and Production from Raven is combined with Bay, Eider and in the Gwydyr Bay area. Oil million to 17.2 million barrels of oil and 3.6 the Prudhoe Bay initial participating area. other production from Greater Point and gas have also been produced from the million to 6 million barrels of condensate for The surface use agreement for Heald McIntyre and is processed at the Lisburne Sag River formation north of Prudhoe at the a total of 14 million to 23.2 million barrels. Point is in dispute. The division said the Production Center. The Raven PA encom- Milne Point unit and North Prudhoe Bay. Original gas in place for the Raven PA is Oenga heirs, who own surface rights to passes 1,615 acres and covers portions of “These accumulations, like the Raven reser- estimated at 71.5 billion to 119 billion cubic Heald Point, assert — through their attorney sections 24-26 and 36 of township 12 north, voirs, are structural closures,” the division feet: 55.8 bcf to 92.9 bcf is free gas and 15.7 — that the current lease language does not range 15 east and portions of sections 29-31 said. bcf to 26.1 bcf is solution gas. of T12N-R16E, Umiat Meridian. The Raven There is faulting within the Raven PA Alaska Oil and Gas Conservation see RAVEN page 6 PA includes portions of three state leases, with four areas defined — the north and ADLs 34625, 34630 and 34635. south fault blocks and the east and south Following pre-application meetings in areas — with the bulk of proven reserves in late 2005 and early 2006, BP applied in the north and south fault blocks. February 2006 to form the Raven PA. The division said it delayed approving the appli- Previous wells at Niakuk cation pending its decision on BP’s applica- Both exploratory and development wells tion to combine the Niakuk and West penetrated the Sag River and Ivishak sand- Niakuk participating areas into the com- stone in the immediate area of the Raven bined Niakuk PA, an application which was PA. approved in early December (see story in 6 PETROLEUM NEWS • WEEK OF DECEMBER 30, 2007

● UTILITIES Risk, change shakes utility investing Turbulent times in the utility industry have changed how capital is invested in energy infrastructure, experts tells Alaskans

By ALAN BAILEY est in coal and nuclear generation, both of Credit downgrading lives that go way beyond what you nor- which subsequently went out of favor mally expect for a debt application. … Petroleum News Beginning in 2000 utility credit ratings again, Ingrassia said. It’s not uncommon to find assets in this tended to be downgraded, although that nvestors have generally seen power “In the 1990s we went through anoth- category that go 75 or even 100 years situation stabilized beginning in 2004, utilities as safe havens for capital ear- er cataclysmic period, which was the out.” Ingrassia said. marked to earn reliable yields. And deregulation, disaggregation, diversifica- In total these funds have more than I “What that means is … everybody got although that probably continues to be tion and globalization (of the industry),” $300 billion in buying capacity looking downgraded as a result of the pitfalls of the case, the apparently tranquil exterior Ingrassia said. “… By 2000 we had the at, among other things, utilities, he said. deregulation,” he said. of the utility industry has been shaken in biggest financial crisis in the utility sector And the debt-plus-equity structure of an Utility share prices have, however, recent decades by shocks such as gas in memory, and in fact things really came investment from an infrastructure fund enjoyed a rebound since the early 2000s shortages, deregulation of the electricity to a screeching halt.” may result in better infrastructure eco- and have outperformed the overall market industry, the infamous power supply There’s a lesson there, he said. nomics than the more traditional since the mid-2000s. problems in California and, currently, “Invariably whenever everyone in the approach of using municipal bonding. “That’s an indication that stability’s global warming concerns. utility industry does the same thing, it’s back,” Ingrassia said. “This is far from the steady industry the wrong thing,” he said. Need more power And a capital-intensive industry such that people tend to think it is,” Frank The implementation of deregulation in as the utility industry tends to do well in But what is the significance of all of Ingrassia, a managing director and chair- the Lower 48 was, however, quite patchy, a low-interest-rate environment. In addi- this in terms of the demand for invest- man of the public sector infrastructure with power supply arrangements chang- tion, utilities tend to create dividend ment in new utility infrastructure? group in Goldman, Sachs, told the Alaska ing much more in some states than in oth- income, and the cut in the tax rate on div- The construction of new electrical Energy Authority Technical Conference ers, he said. Deregulation proved quite idends helped the utility sector. Investing infrastructure is not keeping pace with the on the Alaska Railbelt Electrical Grid on successful in the Northeast but didn’t in utilities is also something of a flight to increasing demand for electrical power, Nov. 27. Ingrassia was providing an work well in California and the West. safety in the midst of recent political and Ingrassia said. overview of the changing and evolving In Illinois, Maryland, Ohio and economic uncertainties, Ingrassia said. “One thing that is happening, and I picture of investment in the U.S. utility Pennsylvania long-term rate freezes are “There has also been a big pickup in think this is going to become a crisis, is infrastructure. just about to come to an end. Utilities in merger activity in the utility space and the we’re running out of juice,” he said. “… these states are about to request huge rate character of the merger activity has We’re not building enough stuff.” Gas shortages and deregulation increases, and legislators, regulators and changed a lot,” Ingrassia said. Current projections show the United Natural gas shortages in the Lower 48 others are questioning the wisdom of Beginning in 2005 people started States running out of reserve electrical in the 1970s precipitated a surge in inter- deregulation, Ingrassia said. looking at creating critical mass in utility capacity in 2015, he said. businesses as a reason for mergers, rather At the same time, despite a growing than taking over companies in the inter- wind energy industry, natural gas has ests of business diversification to reduce become the dominant fuel for new gener- risk after deregulation. ation capacity. “Everything we’ve built for the past Huge pool of capital decade, really, has been gas,” Ingrassia said. “… We only have one arrow in our There is also now a huge pool of capi- quiver at this point.” tal looking to invest in infrastructure It is very difficult to build coal power assets. And some non-traditional utility plants at the moment because of the con- investors such as private equity firms and cerns over global warming and environ- financial services companies are flooding mental issues, he said. the market in utility investment, Ingrassia “We have seen coal plants all over the said. country being cancelled,” Ingrassia said. “There’s lots of money in this sector “… The other thing is we haven’t even looking for a home,” he said. seen the other shoe drop with respect to Recent years have also seen the emer- coal, and that relates to carbon taxes and gence of specialist infrastructure funds. carbon sequestration.” “These are funds that look to have a Nuclear power has been gaining some long-life investment in infrastructure popularity, but involves many regulatory assets that have a debt-like return charac- and technical issues and it would likely teristic,” Ingrassia said. “It really caters to take 10 to 15 years for new nuclear power (businesses) like pension funds and life- insurance companies that have actuarial see INVESTING page 7

continued from page 5 RAVEN

authorize Raven development. The heirs do not object to exploration or development of North Slope oil reserves, but, the division said, are concerned that surface lease agreements should authorize the use of facilities before production begins and assert the lease with BP authorizes pro- duction from Niakuk, but not from any other pool and have requested delay of approval of the Raven PA until the surface lease between the Onega heirs and BP is modified. The division said it “will not further delay” its decision on the Raven PAbecause of requests from the Onega heirs, noting that the Raven PA decision “deals with subsur- face issues surrounding the establishment of the participating area,” while the issue raised by the attorney for the Onega heirs “focuses on resolution of a private dispute regarding individual surface rights,” a sepa- rate issue from subsurface development. That dispute, the division said, “must be resolved between BPXA and the Onega heirs.” ● PETROLEUM NEWS • WEEK OF DECEMBER 30, 2007 7

● ALTERNATIVE ENERGY Capturing Alaska’s winter sun Cold Climate Housing Research Center: Interior Alaska researchers test the energy potential of fleeting winter sunlight

THE ASSOCIATED PRESS Greg Egan, who runs Fairbanks-based Remote Panels wired to lab esearchers want to find out if Interior Alaska’s Power Inc., designed the solar power system. The four arrays have a combined capacity of a little fleeting winter sunlight can be harnessed for ener- He said glare from snow could help. more than 10 kilowatts, or enough to power about 10 R gy. homes. On the morning of Dec. 20, they were producing The Cold Climate Housing Research Center has one-one-thousandth of their capacity. This fall, CCHRC installed four tracking arrays of started solar panel studies to see if sun power can be used The 10 watts were not enough to power one incan- photovoltaic solar panels as part of its Hybrid Micro- in combination with biomass energy for a reliable renew- descent light bulb. Energy Project, which will use solar and biomass energy able energy source. “The fact that we’re getting any electricity at all is to make power and heat. The intent is to rely on the sun “That was the whole idea,” said center president Jack encouraging,” Hebert said. in the summer and wood in the winter. Hebert on the day before winter solstice. “Why not start The panels are wired into a research lab at the center But CCHRC is a research facility, and Hebert and this thing on the coldest, darkest day of the year?” where four small inverters record energy production and research director John Davies wanted to study the effec- On Dec. 20 it was about 35 degrees below zero in convert the power into a form that can be fed into the Fairbanks and the sun was just coming up at 11 a.m. The tiveness of the solar panels in the Far North year-round. air was thick with ice fog. see SUNLIGHT page 10 continued from page 6 folio standards and greenhouse gas emis- gies since the global warming concerns expected to reach about 45,000 sion,” Ingrassia said. “In 2001 there were really started taking off around 2005 — megawatts by 2015, which is just about INVESTING only 10 states that had RPS standards and less than $1 billion in 2004 to about $10 what the RPS standards call for, Ingrassia as of this year we were up to 24 and billion today. said. generation to come on line. counting.” As far as wind power is concerned, the “45,000 megawatts is a pretty good Wind and renewables are not yet cost- And there has also been an enormous United States is now up to about 12,000 showing but it’s not going to solve the competitive with natural gas or coal and increase in investment in renewable ener- megawatts of wind capacity and is problem,” he said. ● most of the good wind sites in the Lower 48 have already been taken, Ingrassia said. Global warming Regardless of who believes that global warming is real, there are influential peo- ple who do believe it. The actions that some scientists think need to happen to address the issue would involve dramatic changes in fuel usage. And that is what the utilities are up against when they eval- uate coal vs. gas in future power genera- tion, Ingrassia said. That leads to predictions of continued expansion of gas-fired power generation. And at the moment 32 percent of the U.S. carbon emissions emanate from the utility industry. “They’re far and away the biggest con- tributor to carbon emissions. … So they will be a big target for whatever is going to happen,” Ingrassia said. Regional action Individual states and regional organi- zations have already started taking action. “I think the states have basically given up on the federal government and decided to preempt the feds on … renewable port- 8 PETROLEUM NEWS • WEEK OF DECEMBER 30, 2007

Companies involved in Alaska and northern Canada’s oil and gas industry Business Spotlight ADVERTISER PAGE AD APPEARS ADVERTISER PAGE AD APPEARS Holaday-Parks A Horizon Well Logging Ace Transport Hotel Captain Cook ...... 11 Acuren USA (formerly Canspec Group) FORREST CRANE Hunter 3-D Aeromed Industrial Project Services ACE Air Cargo Inspirations ACS Jackovich Industrial & Construction Supply Agrium Judy Patrick Photography AIC Kenai Aviation Air Liquide...... 9 Kenworth Alaska Air Logistics of Alaska King Street Storage Alaska Air Cargo Kuukpik Arctic Services Alaska Anvil ...... 3 Kuukpik - LCMF Alaska Coverall LaBodega Alaska Dreams Bill Craig, Senior Last Frontier Air Ventures Alaska Frontier Constructors Scientist/Project Manager Lounsbury & Associates Alaska Marine Lines...... 12 Lynden Air Cargo ...... 12 Alaska Railroad Corp. Lynden Air Freight ...... 12 URS Corp. Alaska Regional Council of Carpenters (ARCC) Lynden Inc...... 12 URS Corp., which maintains Alaska Rubber & Supply Lynden International ...... 12 offices in Anchorage, Fairbanks and Alaska Steel Co. Lynden Logistics ...... 12 Homer, provides specialized expertise Alaska Telecom Lynden Transport ...... 12 in the Alaska environment, logistics, Alaska Tent & Tarp Mapmakers of Alaska Arctic hydrology and engineering, Alaska Textiles Marathon Oil planning and permitting, public Alaska West Express ...... 12 Marketing Solutions involvement, regulatory compliance Alliance, The ...... 7 MI Swaco and contaminated site closure. American Marine ...... 6 MRO Sales Bill Craig has worked for 16 years Arctic Controls as an environmental consultant. He Arctic Foundations N-P has been with URS for almost seven Arctic Slope Telephone Assoc. Co-op. years, conducting NEPA compliance, Arctic Wire Rope & Supply Nabors Alaska Drilling permitting and environmental studies. ASRC Energy Services NANA/Colt Engineering Bill and his wife Melissa have four ASRC Energy Services Alaska Natco Canada children. The family enjoys hiking, ASRC Energy Services Houston Contracting (HCC) Nature Conservancy, The fishing, camping and biking. Now Avalon Development NEI Fluid Technology that their youngest is turning five NMS Employee Leasing they are ready to try skiing, so watch B-F Nordic Calista (or watch out) for them on the trails. North Slope Telecom ...... 4 Badger Productions Northern Air Cargo Baker Hughes Northern Transportation Co. Bombay Deluxe Restaurant Northland Wood Products BP Exploration (Alaska) Northwest Technical Services Broadway Signs Offshore Divers ...... 4 Brooks Range Supply Oilfield Improvements...... 10 Calista Corp. Oilfield Transport Canadian Mat Systems (Alaska) Opti Staffing Group ...... 9 Capital Office Systems P.A. Lawrence ...... 5 Carlile Transportation Services Panalpina CGG Veritas PDC Harris Group CH2M HILL Peak Oilfield Service Co. Computing Alternatives Penco Coldwell Bankers Petroleum Equipment & Services Colville Petrotechnical Resources of Alaska CONAM Construction PGS Onshore ConocoPhillips Alaska Prudhoe Bay Shop & Storage Construction Machinery Industrial PTI Group Contract Consultants Crowley Alaska Cruz Construction Q-Z Dowland-Bach Corp. Doyon Drilling QUADCO Doyon LTD Rain for Rent...... 7 Doyon Universal Services Salt + Light Creative Egli Air Haul Schlumberger Engineered Fire and Safety Seekins Ford ...... 6 ENSR Alaska Shaw Alaska Epoch Well Services Spenard Builders Supply Equipment Source Inc. STEELFAB...... 10 ESS Support Services Worldwide 3M Alaska Evergreen Helicopters of Alaska Taiga Ventures F. Robert Bell and Associates Tire Distribution Systems (TDS) Fairweather Companies, The ...... 2 Total Safety U.S. Inc...... 9 Flowline Alaska TOTE Foundex Totem Equipment & Supply ...... 3 Friends of Pets TTT Environmental Frontier Flying Service Tubular Solutions Alaska...... 5 Udelhoven Oilfield Systems Services G-M Unique Machine Univar USA GBR Equipment URS Corp...... 4 GCI Usibelli Great Northern Engineering U.S. Bearings and Drives GPS Environmental Welding Services GX Technology WesternGeco Hawk Consultants XTO Energy H.C. Price Heating & Ventilation Sales All of the companies listed above advertise on a regular basis with Petroleum News PETROLEUM NEWS • WEEK OF DECEMBER 30, 2007 9 continued from page 1 Weatherford do not cover countries The rig utilization rate for the Precision was not doing business in prior Tasdemir said the U.S. shift may BET year is projected at 43 percent, the to the deal and, in any event, they expire be viewed as a gamble because the lowest in 15 years, compared with in August 2008. U.S. market appears to be tinued mix of rig deployments from the peak 71 percent in 2005. Tasdemir said the U.S. shift may be saturated, with utilization rates in Canada and new rig construction,” newly viewed as a gamble because the U.S. mar- installed Chief Executive Officer Kevin decline. compared with traditional rigs. ket appears to be saturated, with utiliza- Neveu said. tion rates in decline. Tristone Capital services analyst John spending in Canada estimated at $27.7 bil- “Clearly, we’ve had great success in But he said Precision has an edge Tasdemir said Precision has made it plain lion. the U.S. this year (and) we expect to see because its “Super” series rigs are being that its focus is to grow and again become Citi said the decline in natural gas devel- that effort cranked up in 2008,” he said. rated among the industry’s most efficient, a “global premier player in the drilling opment spending will be offset by a spend- Precision has earmarked C$260 mil- with extra speed translating into lower business” after selling off its international ing boost on oil sands development. lion of its cap-ex for building 19 “super” overall drilling costs. drilling operations and technology arm to Of the Canadian respondents to the sur- series land rigs set for staged delivery in For that reason, it makes sense to pur- Houston-based Weatherford International vey, 49 percent expect a spending cut and the next six to 18 months to the U.S., sue the U. S. market and attempt to dis- for US$2.28 billion in early 2005 as it 20 percent anticipate no change. Nine com- where oil and gas activity has stalled. place older rigs, Tasdemir said. The “Super” series rigs are valued by shifted its focus to Canada in the run-up panies expect to hike spending by C$50 Precision’s customers because they to joining the income trust ranks. Canadian outlook gloomy million or more and only seven expect to achieve favorable day rates and terms Non-compete agreements with lower spending by that amount or more. Whatever its prospects in the U.S., the The rig overload in Canada was com- outlook in Canada is distinctly gloomy, pounded this year with another 61 units with forecasters delivering a parade of neg- continued from page 1 sions, companies in those locations added to the fleet, raising the average size will simply move their manufacturing ative predictions. to 863. The sector is exiting 2007 with 879 HUGE capacity to China and elsewhere, as The Petroleum Services Association of available rigs compared with 837 at the end they have done since the 1990s, Canada is targeting a 17 percent drop to of 2006. per million British thermal units, close Tertzakian said. 14,500 wells from an expected 17,650 this The rig utilization rate for the year is to US$8 higher than on the U.S. Gulf He said future energy growth will be year; Lehman Brothers is counting on a 12 projected at 43 percent, the lowest in 15 Coast. driven by the scale of industrialization percent decline in spending to $20.3 bil- years, compared with the peak 71 percent Thus LNG is good news for taking place outside countries that lion, with 17 percent of the cut coming in 2005. Canadian gas producers because it is belong to the Organization for from companies likely to spend more than Working rigs in Alberta dropped 28 per- facilitating the globalization of gas, he Economic Cooperation and $1 billion; but a survey by Citi Investment cent in 2007 to 270, while British said. Development. Research points to a decline in E&P spend- Columbia was off 26 percent to 52 active A similar view was expressed by That in turn puts pressure on North ing of only 3.1 percent, with the U.S. being rigs. fueled by a 6.5 percent rise, and overall TransCanada Chief Executive Officer America’s oil and gas producers to go —GARY PARK Hal Kvisle, who argues that because of global — a message that has been ham- LNG’s mobility, it will be delivered to mered home to the Canadian industry North America only if prices compete in the past 14 months as currency with those in Europe and Japan. exchange rates and royalty changes To date, that has occurred only have taken their toll. when European storage reaches capac- He said it should now be apparent ity in the summer, he said, noting that that “nobody is defending our interests current LNG imports are a lot less than anymore … (and) maybe that’s some- they were six months ago and, despite thing that will wake us up, because we rising volumes, still account for less do need to think about taking our own than 5 percent of total North American interests into our own hands, becoming supply. more competitive and thinking more “If the price in North America is globally.” high enough to attract a lot of LNG Tertzakian said there are a number then that is a great day for Alberta,” of options — such as investing in new Kvisle said. supertankers that carry LNG and have regasification facilities on board — North American price unsustainable open to Canadian gas producers look- Tertzakian said that with global gas ing to develop new markets. prices in the range of US$10-$15 per thousand cubic feet the current low gas Kvisle: LNG will be a price taker price in North America is unsustain- Kvisle, who is leading the remaking able. of TransCanada from its traditional In a world of high gas demand, the base as a regulated gas pipeline compa- North American price will eventually ny, doubts that LNG imports will cause have to rise to global levels, he predict- a North American price collapse and ed. make Alberta gas uneconomic. He suggested that last summer — His view is that LNG will be a price when high LNG imports to the U.S. taker, not a price-setter in the continent. were blamed for driving gas prices Kvisle said TransCanada forecasts down — was an exception because that the need for Western Canadian gas Europe had low prices for “anomalous will stabilize production at 15 billion to reasons.” 18 billion cubic feet per day, although “The market doesn’t think the price he expects demand to feed the oil sands for gas is going to be low in Europe sector will reduce the volumes avail- next summer (given that) forward able for export to the U.S. curves are all over US$10,” Tertzakian Evidence of the appetite for gas was said, while cautioning that he does not reinforced in TransCanada’s recent think globalization will generate sus- coordinated non-binding open season, tainable higher prices before 2009 or when it attracted expressions of interest 2010. for more than 1.5 bcf per day on its Meanwhile, he forecasts that as North American network. more LNG infrastructure is built and The company will hold discussions the financial community adjusts, full with those potential customers early in globalization of gas will take hold in 2008 to get a better fix on how soon it two or three years. will need to move ahead. TransCanada used the open season Shift of manufacturing a factor to make sure the market understood A number of factors are bolstering that growth supply in the U.S. Rockies, world-wide demand for gas, notably shale plays of East Texas and LNG the shift of manufacturing capacity to imports is expected in the next few China, India, the Middle East, Russia, years. Eastern Europe and South America, It found out there is strong interest where energy consumption outstrips its in having TransCanada’s various affili- efficient use. ates working together to offer service As Western countries impose tighter alternatives, said Dean Ferguson, vice restrictions on greenhouse gas emis- president of market development. ● 10 PETROLEUM NEWS • WEEK OF DECEMBER 30, 2007

● GOVERNMENT Committee finds probable cause that Harris broke ethics law

THE ASSOCIATED PRESS legislative ethics committee has determined there was Harris’ news release said Stevens had lost the “probable cause” that House Speaker John Harris broke confidence of Alaskans and the support of the state’s A state ethics law when his office issued a news release call- top elected leadership. It said Stevens had not ing on Ben Stevens to resign from the Republican attended to the duties of the Republican National National Committee. Committee for more than two years. His term ends in The Select Committee on Legislative Ethics made the ruling. March. The committee dismissed a complaint against convicted for- mer state House Speaker Pete Kott. have testified that they bribed Stevens. Stevens has not been In the Harris matter, the committee concluded that Harris was charged. doing Republican Party business out of his legislative office. Harris’ news release said Stevens had lost the confidence of “Representative Harris used state resources (staff, equipment Alaskans and the support of the state’s top elected leadership. It and legislative letterhead), to prepare and issue a press release said Stevens had not attended to the duties of the Republican focused solely on partisan political activity,” said the report, National Committee for more than two years. His term ends in released Dec. 19. March. Stevens, the former president of the state Senate, is under federal investigation. He has denied breaking the law. Complaint against Kott dismissed Gov. Sarah Palin has also called on Stevens to resign. The ethics committee also dismissed a complaint filed in After Harris issued his press release, someone filed a confi- May against Kott. He was sentenced in December to six years in dential ethics complaint against the Valdez Republican. Harris prison on federal corruption charges. then put in policies for his legislative office to make sure it did The committee decided not to investigate the most serious not happen again, the report said. Considering that, the commit- allegation in the complaint. tee said no punishment was needed. The ethics report described the allegation only as “that for- Harris was in Mexico on vacation Dec. 20 and could not be mer representative Kott used his status as a legislator to obtain reached for comment. personal gain for Debora J. Stovern in a court hearing.” Release issued in September Stovern is Kott’s girlfriend. She told the Anchorage Daily News that Kott was accused of helping her in a child support Harris issued the news release on Sept. 19. It was titled, case. “Speaker Calls on Ben Stevens to Resign National “The allegation was that he somehow influenced the judge to Committeeman Position.” set a child support amount, which of course is ridiculous,” she Stevens, son of U.S. Sen. Ted Stevens, holds the position of said. national committeeman for the Alaska Republican Party. Ethics committee administrator Joyce Anderson said the rea- That gives him a seat on the Republican National Committee. sons the panel decided not to investigate are confidential. The Republican National Committee is composed of one man The committee dismissed an allegation Kott failed to disclose and one woman from each of the 50 states. The committee that Stovern was his “domestic partner” when he was a legisla- decides the party position and puts together the party platform, tor and she worked for the legislative affairs agency. among other things. It also threw out a claim Kott improperly used state resources Two executives of the oil field services company VECO Inc. by faxing eight documents in 2003. ●

continued from page 7 In October, a small installation a dozen it and another with snow swept off. The miles from the Arctic Ocean was produc- center will share what it learns on its Web SUNLIGHT ing near capacity, he said. The sun was site and gather information from other low on the horizon but there was a flat people using solar power in Alaska. electric grid. The system is set up with plain of snow leading up to the panels. Part of the goal is to help individuals monitors that will allow the center to Hebert, only half-joking, said they and whole communities assess how well a track the intensity of the sun and the might even try making power from moon- solar installation would work for them. effect of light reflecting off snow. light. With the high price of diesel fuel and tax Greg Egan, who runs Fairbanks-based credits for renewable energy, solar power Remote Power Inc., designed the solar Three types tested is starting to look good for rural commu- power system. He said glare from snow The center is testing three kinds of nities, Egan said. could help. solar panels, including one with snow on The center will sell whatever solar power it produces through a Golden Valley Electric Association program that allows co-op members to subsidize alter- native energy. Funding for the micro-energy project came from BP, the state, the Alaska Housing Finance Corp. and the Fairbanks North Star Borough. At noon, Hebert put on a down parka and walked outside to the solar panels, installed on metal bases beside the cen- ter’s driveway. The sun was unseen, hid- den behind low trees, clouds and ice fog. Hebert said he figured the panels would really start producing in late January or early February. By mid-June, they should be making power 22 hours a day. Interior Alaska annually gets much less solar radiation than locations on the equator. But it gets about the same num- ber of daylight hours per year, and in the summer, the land of the midnight sun out- shines most other places. “We may very well generate more electricity from the sun than they do at the equator,” Hebert said as frost settled on his beard. On the Net: Cold Climate Housing Research Center: www.cchrc.org. ● PETROLEUM NEWS • WEEK OF DECEMBER 30, 2007 11 continued from page 1 BIDS ALASKA DNR be initiated: The state accepts applica- tions each April. The commissioner of the Department of Natural Resources may also issue a notice requesting submittal of proposals to explore a designated area; those notices may be issued at any time. Prospective licensees have until 5 p.m. Jan. 17 to notify the Division of Oil and Gas of intent to submit a competing pro- posal; competing proposals are due by 5 p.m. Feb. 18. The division does not have a standard proposal form, but requires specific infor- mation — along with a map — including the proposed work commitment. Maps and a copy of the proposal notices are posted on the division’s Web site: www.dog.dnr.state.ak.us. Program more than 10 years old The exploration licensing program was initiated in the early 1990s as a way to encourage exploration in Alaska’s under-explored frontier basins and to complement the state’s areawide leasing program. Acreage included in the state’s areawide leasing program is off limits for exploration licensing. Exploration licensing areas must be between 10,000 and 500,000 acres. Proposals for licensing must describe the area; state the specific minimum work commitment in dollars; describe the

amount and form of a security to be post- ALASKA DNR ed based on the projected cost of the planned exploration work; propose the term of the license — unless specified by the commissioner; and verify that the prospective licensee meets minimum qualifications. Once the commissioner has deter- mined that a license should be awarded, the successful licensee will be determined by a sealed bid process with the license awarded to the applicant committing the most dollars to an exploration program. The license recipient must post a bond in the amount of the work commitment and pay a $1 per acre license fee. The term of the license can be up to 10 years and during the lease, subject to sat- isfaction of required work commitments, any portion of the licensed area can be converted to oil and gas leases, the term of which can extend beyond the original term of the license. Annual rental for acreage converted to leases is $3 per acre. If less than 25 percent of the work commitment has been completed by the fourth anniversary of the lease, the license will be terminated with the remainder of the security forfeited to the state. If the licensee has completed less than 50 percent of the total work by the fourth anniversary, 25 percent of the licensed area will be relinquished, with an addi- Pacific Energy Alaska Operating LLC. tional 10 percent relinquished each suc- Andex Resources has a seven-year cessive year until half of the original Nenana basin exploration license for acreage has been relinquished. 482,942 acres issued Oct. 1, 2002, with a $2.525 million work commitment. The Four licenses issued division said in its 2007 annual report that The state has issued four exploration the work commitment in the Nenana licenses: one each in the Copper River basin has been met. Andex, however, lost and Nenana basins and two in the Susitna interest in Alaska when the Alaska basin. Legislature increased the state’s oil and The Copper River basin license, issued gas production tax in 2006 and Doyon in 2000, was a five-year license issued to Ltd. is looking for a new partner for Forest Oil and Anschutz Exploration cov- Nenana basin work (see story in Jan. 16 ering 318,736 acres with an exploration issue of Petroleum News at www.petrole- commitment of $1.42 million. umnews.com/pnads/135883609.shtml). Regular oil and gas leases were issued Forest had two Susitna basin leases, Oct. 1 converting 44,761 acres from this both issued in 2003 with seven-year license to leases with five-year terms. The terms, one covering 386,204 acres with a leases were issued 50 percent to Forest $2.52 million exploration commitment Oil which is exiting Alaska and 50 per- and one covering 471,474 acres with a $3 cent to Anschutz Corp. Forest has sold its million exploration commitment. All of Southcentral acreage to Pacific Energy Forest’s Southcentral acreage is now held Resources, whose Alaska subsidiary is by Pacific Energy Alaska Operating. ● 12 PETROLEUM NEWS • WEEK OF DECEMBER 30, 2007 2 Rollercoaster ride not over NovaGold’s Galore Creek still likely to be developed some day

5 Alaska miners out of breath! Freeman: Outstanding results will blur transition to New Year

8 Junior preps giant for comeback Tamerlane aims to tap rich lead-zinc deposit, technology the key

Seven drill rigs completed more than 200,000 feet of drilling at Pebble East in 2007.

A special supplement to Petroleum News WEEK OF December 30, 2007 PHOTO COURTESY OF THE PEBBLE PARTNERSHIP 2 NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF DECEMBER 30, 2007

● BRITISH COLUMBIA Rollercoaster ride not over NovaGold’s Galore Creek still likely to be developed some day, but investors will have to be patient, say financial analysts

By SARAH HURST held in Vancouver in 2010. Galore Creek has to be valued For Mining News as a care and maintenance asset for now, Lostritto added. The likelihood is that the capex for Donlin Creek also year ago, Vancouver-based NovaGold Resources Inc. will escalate, according to Lostritto. “The key is whether triumphantly fought off a hostile takeover bid by or not they can move that project forward,” he said. A Toronto giant Barrick Gold. In 2007, the ambitious Lostritto estimates that Donlin accounts for 65 percent of junior brought its Rock Creek project near Nome to NovaGold’s value, up from 60 percent before the the brink of production, began construction at Galore Creek announcement about Galore Creek. Galore now accounts in British Columbia and just a few weeks ago sealed a deal for 10 percent of the company’s value, down from 26 per- with Barrick to end their dispute over the Donlin Creek cent, Rock Creek is worth about 10 percent and the project in southwest Alaska. COURTESY OF NOVAGOLD RESOURCES INC. OF NOVAGOLD COURTESY Ambler exploration project in northern Alaska is worth On Nov. 7, NovaGold’s share price hit a 52-week high about 15 percent. One of the reasons for Donlin’s higher of $21.91. Then disaster struck: NovaGold and its new part- value is that it is a gold project and Galore is primarily a ner at Galore Creek, Vancouver-based Teck Cominco, base metals project, Lostritto said. announced that the copper-gold project would be put on hold due to a leap in the estimated capital cost from $2.2 bil- Takeover ‘plausible’ but not likely lion to $5 billion. NovaGold’s share price plummeted An aerial view of Galore Creek A new bid for NovaGold by Barrick is “plausible,” overnight and by Dec. 14 it had hit a new 52-week low of now that the share price is low, but not likely, Lostritto $7.79. capital costs and that investors should be patient. If the pro- thinks. “I would really like to see NovaGold go forward as So will the company still be around a year from now? ject’s capex can be reduced to between $3 billion and $3.5 a standalone entity; we need more companies,” he said. The answer is a resounding “probably.” billion, it could work quite well, Stein thinks. Kerry Smith, an analyst with Haywood Securities, The copper may not be coming out of the ground at doesn’t think that a takeover bid for NovaGold is likely at Galore Creek any time soon, but financial analysts who take Better prospects at Donlin Creek the moment. Barrick has already been rebuffed once by a longer-term view are cautiously optimistic. “To me Donlin Creek was always the better of the two NovaGold’s shareholders, has solidified its 50-percent “The market seemed to write that project off as worth- projects, I’m more bullish on gold than copper,” Stein ownership of Donlin Creek, and has four other projects in less. I was maybe a little bit surprised that the market was said. He estimates that Donlin Creek accounts for more the pipeline. There is no big hurry to buy Galore Creek if so rough on the company,” David Stein, an analyst with than half of NovaGold’s value. “We’ve come to expect it won’t be producing metal for years, Smith told Mining Cormark Securities, told Mining News. delays in the business, it’s just a matter of how long,” he News. Meanwhile, Teck Cominco has been busy recently “I think the severity of the reaction has to do with more added. The feasibility study for Galore underestimated the buying up shares in Fording Canadian Coal Trust. than NovaGold — it’s the stock market in general; with capex because consultants like Hatch are overstretched, “I do think that Galore will get built eventually and that small cap stocks, the market appears quite tenuous. I think working for several companies on big projects all at the Donlin will get built eventually, but not on the timetable it comes down to two things: a general worry about risks in same time and being pressured to finish their reports as that NovaGold was hoping for,” Smith said. “Generally, the market and credit issues in the U.S., the value of the quickly as possible, Stein believes. the north is underexplored. There are still going to be U.S. dollar. When people are worried, they prefer larger cap “One has to put things into perspective, Galore Creek deposits discovered that will be economic and will get stocks because they’re lower risk,” Stein said. is a massive deposit with lots of opportunity to grow,” built.” Stein has been covering NovaGold for some time from Paolo Lostritto, an analyst with MGI Securities, told Alternatively, companies could head to the Congo to the research side and his company has done some under- Mining News. The inflation in costs for the project is part- mine high-grade copper, but they could invest billions writings for NovaGold, he said. He believes an engineering ly due to the demand for skilled labor for Canada’s oil there and then the government could take ownership of solution can be found for Galore Creek that would reduce sands and for the Winter Olympics, which are due to be the project, Smith added. ●

● ALASKA Final assay results in from SUN property Results from final seven holes at SUN expand the main deposit 300 meters north and 500 meters south; deeper ‘Hot’ zone discovered

MINING NEWS of the main deposit, but a newly discovered deeper “Hot” zone remains open to both the north and the south and the ndover Ventures Inc. has released the assay results zone was intersected in Sun 07-16 and Sun 07-17, the two main deposit is still open to the north. from the final seven holes of its 2007 drill season at northernmost holes drilled. Hole 07-16 drilled through Southern extent not found A the Sun property west of Kotzebue in the Ambler 31.4 meters (103 feet) of the “Hot” zone with an average Mining District of Northwest Alaska. of 0.90 percent copper, 0.40 percent lead, 1.50 percent Vancouver-based Andover has not found the southern Four of the assay results were from the northernmost zinc, 15.8 grams-per-ton silver and 0.06 grams-per-ton extent of the main deposit likewise. The remaining three holes drilled at Sun. These holes were drilled in four fences gold. Hole 07-17 drilled this zone for 8.6 meters (28.2 feet) assay results from 2007 drilling came from the southern- at step-outs of 150 meters (492 feet) to the northeast. Two and the average results on that were 0.80 percent copper, most fence. All three holes (Sun 07-20, Sun 07-21, and Sun of the fences were north of what was originally considered 0.60 percent lead, 2.60 percent zinc, 33.7 grams-per-ton 07-22) intersected a thickened zone of the main deposit. the main Sun deposit, and the positive assay results have silver and 0.363 grams-per-ton gold. This thick layer of mineralization, averaging 35.5 extended the deposit by 300 meters (984 feet). Holes drilled to the south of 07-16 were not drilled to a Not only did these holes intersect the mineralized zone depth that would have intersected the “Hot” zone. This see SUN page 4

NORTHWEST TERRITORIES Diavik mine to get longer lease on life Harry Winston Diamond Corp., formerly Aber Diamond, has announced a $218 million plan for its Diavik Diamond Mine in the Northwest Territories that will extend the mine’s life beyond 2020 and improve access to higher-value dia- monds with underground mining. The plan received approval from partner Rio Tinto plc of London Nov. 23. Diavik is situated on a 20-square-kilometer, 12.5-square-mile island, informal- ly called East Island, in Lac de Gras, about 300 kilometers, or 186 miles, by air northeast of Yellowknife. Underground mining is projected to begin at Diavik, currently an open-pit mine, in 2009. The diversity of both open-pit and underground mining areas will secure Diavik’s ability to maintain production through seasonal and other changes, the company said. Since the mine began production in 2003, all production has come from open pit mining and resulted in the extraction of 35.4 million carats of diamonds

see DIAVIK page 3 PETROLEUM NEWS • WEEK OF DECEMBER 30, 2007 NORTH OF 60 MINING 3

● BRITISH COLUMBIA/ALASKA ALASKA Barge access plan Search for lode continues at Little Squaw; report 7.5 million cubic yards of gold bearing gravel under review Little Squaw Mining Co. reported encouraging assay results from 68 of 99 Redfern proposes air cushion barge towed by ‘Amphitrac’ to access holes drilled this year at Little Squaw Creek in the Chandalar Mining District, about 190 miles north of Fairbanks. mine; idea being reviewed by governments in U.S., Canada The Spokane, Wash.-based company controls 14,993 acres in mining claims covering most of the Chandalar district on the southern slope of the Brooks By SHANE LASLEY Redfern also anticipates Range. This includes 22 patent claims. Mining News construction costs will be higher A 15,500 foot drilling program at Little Squaw Creek in 2007 was designed to delineate a placer gold deposit that contains more than 7.5 million cubic yards of ancouver-based Redcorp Ventures than expected, but said the gold bearing gravel, the company said. Little Squaw Creek is still open in two Ltd. said subsidiary Redfern increases should be offset by a directions running the length of the creek. Resources Ltd. is working to com- V reduction in the cost of capital Little Squaw Mining drilled lines every 500 feet across the deposit with holes plete a public comment period and equipment. One economizing spaced every 50 to 100 feet on each line. Sixty of the holes intersected the pay coastal management plan consistency horizon, a layer of gravel with enough significant gold mineralization to be con- review in January in hopes of obtaining measure was the purchase and sidered feasible for placer mining. The pay horizon averaged 84 feet in depth at a permits required to access its Tulsequah refurbishment of a used ball mill. cost of $15.94 per cubic yard and recovered gold sold for $600 an ounce, the com- Chief Mine project from Alaska via the pany said. Taku River. payloads. The barges that the company Little Squaw Mining plans to drill another 300 holes to further determine the A parallel Canadian federal and intends to purchase have payloads of 450 size of the placer deposit in both total yards and overall value. provincial environmental assessment metric tons each. The company said an additional 30 million cubic yards of mineralized gravel process for barge access to the project The Amphitrac is a vehicle specially remains in Little Squaw Creek and the adjacent Big Squaw Creek. also is expected to be completed early designed for this application. It is an adap- next year, the company said. tion of the Rolligon, a low-pressure Looking for the lode source The Alaska permits are for Redfern’s ground vehicle used in the oil fields of unique plan to use a specially designed air Alaska’s North Slope. The Amphitrac will In addition to placer exploration, Little Squaw Mining is exploring its claims cushion barge and towing vehicle called be outfitted with an Archimedes screw for for hardrock potential. The company trenched the Summit Prospect this summer an “Amphitrac” to transport ore by water water propulsion and to assist it in climb- and intersected a 20-foot wide structure that assayed at 0.309 ounce per ton of from the mine to Juneau, about 40 miles, ing from open water onto ice, Redfern gold. or 65 kilometers, to the southwest. From said. The Summit structure is a west-trending shear zone that runs through the mid- Juneau, the company intends to barge the The company originally considered dle of the company’s Chandalar claims. Gold mineralization has been discovered ore to the Skagway Ore Terminal where it building a 100-mile-long road from the in more than 1,800 feet along the strike length and is open in both directions. can be loaded onto ships bound for mine site to Atlin, B.C. After encountering Soil sampling and ground magnetic surveys suggest that gold mineralization smelters in Asia. stiff opposition to that plan, Redfern opted continues another 1,500 feet to the east. Little Squaw Mining plans further trench- The Alaska coastal management plan to use the air cushion barge technology ing of the area, and said it intends to conduct diamond core drilling in the entire and consistency review and a 30-day pub- instead. Summit structure. lic comment period on the proposal start- —SHANE LASLEY ed Dec. 18. A public meeting is scheduled Construction continues at Tulsequah in Juneau Jan. 8. The Alaska coastal man- Construction, meanwhile, continues at agement consistency determination is the mine site. Redfern received a permit to expected Feb. 5. continue work on a road that will connect Contact North of 60 Mining News: the Taku River barge landing to the mine. Publisher: Shane Lasley • e-mail: [email protected] Untested technology worries some This permit also allows the company to Phone: 907.229.6289 • Fax: 907.522.9583 Environmental groups have raised start construction on an airstrip. questions about the proposed use of Redfern said it expects to have major untested technology for transportation on construction projects under way by the North of 60 Mining News is a monthly supplement of the weekly the Taku, which is southeast Alaska’s end of the first quarter of 2008, and to be newspaper, Petroleum News. It will be published in the fourth or largest salmon-producing river. at mechanical completion by January fifth week of every month. Redfern contends that using air cushion 2009, slightly later than was originally barges on the Taku is the most environ- projected due to a delay in obtaining per- Shane Lasley PUBLISHER & NEWS EDITOR ADDRESS mentally responsible way to access the mits. P.O. Box 231647 mine. The company also told Juneau resi- Redfern also anticipates construction Rose Ragsdale EDITOR-IN-CHIEF (contractor) Anchorage, AK 99523-1647 dents that the water route would generate costs will be higher than expected, but said Mary Mack CHIEF FINANCIAL OFFICER about $2 million a month in additional the increases should be offset by a reduc- EDITORIAL Susan Crane ADVERTISING DIRECTOR Anchorage revenue for the city during the proposed 8- tion in the cost of capital equipment. One 907.522.9469 to 15-year life of the mine. economizing measure was the purchase Amy Spittler ASSOCIATE PUBLISHER Canada An air cushion barge is similar in and refurbishment of a used ball mill. [email protected] Heather Yates OFFICE MANAGER appearance to a hovercraft, but it moves in A 150-person camp, currently being BOOKKEEPING & CIRCULATION Clint Lasley CIRCULATION DIRECTOR about 18 inches of water rather than over constructed in Tacoma, Wash., is expected 907.522.9469 to be completed in February and transport- the water. Redfern said air cushion barges Steven Merritt PRODUCTION DIRECTOR Circulation Email are preferred to hovercraft because they ed to the mine site and assembled in the [email protected] are much quieter and can carry heavier spring, Redfern said. ● Curt Freeman COLUMNIST ADVERTISING Sarah Hurst CONTRIBUTING WRITER 907.770.5592 Allen Baker CONTRIBUTING WRITER Advertising Email continued from page 2 and borrowings. [email protected] In support of the new mine plan, the Tim Kikta COPY EDITOR DIAVIK mine operator is preparing a revised CLASSIFIEDS resource statement that is expected to be Judy Patrick Photography CONTRACT PHOTOGRAPHER 907.644.4444 through July 31. delivered in the first quarter of 2008. Forrest Crane CONTRACT PHOTOGRAPHER FAX FOR ALL DEPARTMENTS Harry Winston expects to contribute Harry Winston holds a 40 percent interest Tom Kearney ADVERTISING DESIGN MANAGER 907.522.9583 about C$218 million during the next two in Diavik, and Rio Tinto owns the years in support of the new mine plan. It remaining 60 percent interest. Mapmakers Alaska CARTOGRAPHY is expected that the funds will come from Several of the individuals —MINING NEWS Dee Cashman CIRCULATION REPRESENTATIVE a combination of cash from operations listed above are independent contractors

NORTH OF 60 MINING NEWS is a monthly supplement of Petroleum News, a weekly newspaper. To subscribe to Petroleum News and receive the monthly mining supplement, call (907) 522-9469 or sign-up online at www.PetroleumNews.com. The price in the U.S. is $78 per year, which includes online access to past stories and early access to Petroleum News every week. (Canada/Mexico subscriptions are $165.95; overseas subscriptions are $200) Or, just purchase the online edition of Petroleum News, which also includes the mining supplement and online access to past stories, for $49 per year. 4 NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF DECEMBER 30, 2007

● ALASKA NORTHWEST TERRITORIES Fortune tests NWT Nico deposit with pilot Greens Creek metals Fortune Minerals Ltd. reported Dec. 4 the startup of a $3.8 million pilot plant last month at SGS Lakefield Research Limited in Ontario for its Nico cobalt-gold-bismuth deposit in the Northwest Territories. mine goes on block Fortune aims to confirm the economic feasibility of producing precious and base metals from NICO. A total of 180 metric tons of ore mined from the Nico deposit dur- Southeast Alaska operation played critical role in career of Rio ing the 2006 and 2007 underground test mining programs will be processed by May, Tinto CEO Tom Albanese, but distinction will not prevent sale the company said. Underground mining tests conducted at Fortune aims to confirm the By ROSE RAGSDALE determination. Nico produced about 6,000 metric tons of economic feasibility of producing For Mining News Greens Creek is where Albanese started ore from two levels of the deposits and precious and base metals from his career at Rio Tinto. He is credited with 100,000 metric tons of waste development io Tinto Plc, parent of the company successfully reviving the Southeast Alaska rock from an access ramp and raises. Two NICO. A total of 180 metric tons that owns a majority of the Greens operation. composite samples were taken from the of ore mined from the Nico R Creek Mine, said it would like to sell “Every time I see Greens Creek on that ore for the pilot to simulate average oper- deposit during the 2006 and the Southeast Alaska investment. list, a tear comes off my eye having worked ating conditions for the mine. A number of 2007 underground test mining The move, however, is not expected to there and got it back up and running,” subcomposites also were taken to represent programs will be processed by affect the profitable zinc, lead and silver Albanese told a reporter recently. But he the variability of ore grades expected dur- May, the company said. mine’s operations on Admiralty Island, nor added: “We have to be careful that we aren’t ing mine operations and will be used to test its 325 employees, according to Clayton emotionally attached to anything.” this variability. Walker, the mine’s general manager. Albanese describes the whole potential Fortune said preliminary results of bench-scale flotation tests of the bulk sample and London-based Rio Tinto, which owns a merger with BHP as an onion with multiple also from 10-hour pilot plant runs for the flotation phase of the Nico pilot plant have 70.3 percent stake in the mine, is one of the layers, with the first and most important been encouraging. largest mining companies in the world. Rio layer being value, or price. Gold-bearing cobalt and bismuth concentrates produced during the flotation stage Tinto has said it is looking to divest a num- When asked whether the merger with of the Nico pilot plant this year will be used to complete the hydrometallurgical com- ber of its assets, BHP is inevitable, Albanese replied: ponents of the test in January through May. These scheduled hydrometallurgical com- including Greens “Nothing is inevitable.” ponents include: cyanide recovery of gold from bismuth and recovery of bismuth by Creek, in an effort to ferric chloride leaching and cementation onto iron by February; pressure acid leaching, thwart the unwel- Mine plays important ion exchange purification and electro-winning of cobalt to cathode in March and April; come attentions of role in Southeast and cyanidation of the cleaner float tails and autoclave residue in April and May. rival mining giant, Greens Creek, meanwhile, continues to A primary consideration for the schedule and sample delivery was the availability BHP Billiton, which play an important role in the Southeast of the pilot-scale autoclave at SGS Lakefield, which Fortune has reserved for March recently launched a Alaska economy. The mine, 18 miles south- and April. three-for-one share west of downtown Juneau, is the city’s Nico, about 160 kilometers, or 99 miles, northwest of Yellowknife, is targeted for takeover offer for Rio Rio Tinto CEO Tom highest valued property at $112 million, production in 2010. A feasibility study identified reserves in the deposit of 21.8 million Tinto. Albanese is credited according to city tax rolls. metric tons, containing 61 million pounds of cobalt, 760,000 ounces of gold and 77 with turning around U.S. private equity Walker declined to say what price Rio million pounds of bismuth within a larger lower-grade resource. Fortune aims to devel- giant Blackstone, operations at the Greens Creek Mine Tinto is asking for its share of the mine. op Nico using a combination of open pit and underground mining with a process meanwhile, is said to on Admiralty Island “No final decisions have been reached, plant to produce cobalt cathode, gold doré and bismuth cement or metal. be putting together its and any sale process will likely take months —MINING NEWS own bid for Rio Tinto, a play that reported- and the possibility remains that no sale will ly will involve a Chinese sovereign wealth occur,” he said in a statement. “Greens fund. Creek is a safe, healthy, and valuable busi- Rio Tinto has identified up to $30 billion ness asset, and would therefore require a in assets it believes will drive shareholder very favorable bid.” value as part of its defense against BHP’s The underground mine produces silver, offer. These include a talc business, urani- gold, zinc and lead. It is a joint venture of um projects in Australia and the United Rio Tinto subsidiary, Kennecott Minerals of States, the Northparkes copper and gold Salt Lake City, Utah, and Coeur d’Alene, mine in Australia and Greens Creek This Idaho-based Hecla Mining Co., which marks the third time Rio Tinto has consider owns 29.7 percent of the mine. selling the 15-year-old Greens Creek. Greens Creek has 7.6 million tons of Mining industry analysts say Rio Tinto estimated reserves and is expected to pro- B:69<381 FYQMPSJOH PVS SFTPVSDFT CEO Tom Albanese appears to be deter- duce commercial quantities of ore for at mined to rebuff BHP Billiton, and they see least another decade. Greens Creek being added to a list of Rio In September, Greens Creek set a record Tinto assets up for sale as a sign of that for the largest monthly ore concentrate ship- ment in its history, the result of unusual tim- ing between mining and shipping sched- ules, the company said. ●

continued from page 2 SUN

meters (116.5 feet) thick was discovered during drilling earlier in the summer. The average grade in this zone is 1.05 percent copper, 0.81 percent lead, 3.26 percent zinc, 42.9 grams-per-ton silver and 0.176 grams-per-ton gold. It runs anywhere from 50 to 100 meters (164 to 328 feet) wide by 500 meters long (1,640 feet) and could extend further south. Calista Corporation is committed to the responsible The 2008 exploration program will exploration and development of its natural have two primary objectives. First, resources, and to the preservation of our lands for Andover wants to do additional drilling in the future. We constantly strive for excellence in the main deposit to further define the the projects we build, the services we offer, and the resource. This will include drilling deeper to see how far south the “Hot” zone jobs that we provide for our people. extends. The company also aims to contin- ue following the main deposit and the “Hot” zone to the north. CALISTACORP.COM Bill Ellis, the project manager at Sun, said depending on the weather, the junior mining company hopes to begin drilling again in April. ● PETROLEUM NEWS • WEEK OF DECEMBER 30, 2007 5 NORTH OF 60 MINING

● GUEST COLUMN December activity in Alaska leaves little time to catch breath; outstanding results will blur transition to New Year

By CURT FREEMAN Billiton does finance Full Metal’s share of aging more than 100 meters in width with For Mining News The pre-development costs, it would be enti- mineralization confirmed from surface to tled to a first call on 75 percent of Full depths between 200 and 570 meters. The n days gone by the Alaska mining author Metal’s share of positive operating cash company is conducting a resource esti- industry thought of December as a The author flow resulting from production. mate for the project, which it expects will I time of decreased activity and a Curt Freeman, During the spring and summer of be released in early 2008. chance to catch your breath before the CPG #6901, is a 2007, Full Metal staked multiple copper- Alaska newcomer GOLDMARK New Year started. Well, in case you have well-known geol- gold-molybdenum porphyry targets in MINERALS LTD. announced that it has not noticed, those days are long gone! ogist who lives in Alaska, and conducted reconnaissance- acquired an option from GEOCOM This month’s activities stretch from one Fairbanks. He pre- scale mapping and sampling programs. RESOURCES on the latter’s Iliamna cop- side of Alaska to the other with metals of pared this column CURT FREEMAN During 2008, Full Metal and BHP per-gold project, southwest of Iliamna. interest spanning the periodic table of ele- Dec. 20. Freeman can be reached by Billiton will complete mapping and sam- Under terms of the agreement, Goldmark ments. Results from a number of pro- mail at P.O. Box 80268, Fairbanks, AK pling programs as well as airborne and will purchase Geocom’s interest, which grams are still outstanding and likely will 99708. His work phone number at ground geophysics with the purpose of comprises a 52.5 percent interest in the H not be seen until the New Year, blurring Avalon Development is (907) 457-5159 identifying drill targets. claim section and a 38.5 percent interest transitions from “last year” to “this year.” and his fax is (907) 455-8069. His email GEOINFORMATICS EXPLORATION in the D claim section of the project. If you need time for some extra breath- is [email protected] and his web site is INC. reported final drilling results from Goldmark will be the operator of the ing, you might consider hyper-ventilating, www.avalonalaska.com. its Whistler project in southwestern project and intends to conduct an explo- it may be your only chance to get air in Alaska. Highlights include 236 meters ration program commencing with a geo- 2008! METALS CORP. issued a news release grading 0.65 grams per metric ton of gold physical survey covering the entire target that was perhaps the most disturbing and 0.12 percent copper in hole 6 at the area with follow up drilling based on geo- Western Alaska news of the month. On one hand, the southern end of the Main Zone, while physical results. The property was staked company expressed its confidence in the NOVAGOLD RESOURCES and part- hole 7 at the northern end of the Main primarily for its copper and gold poten- potential of its Big Chunk project land ner BARRICK GOLD reported additional Zone returned 15.5 meters grading 0.53 tial, based on the aeromagnetic anomaly, drilling results from their Donlin Creek holdings in the Pebble Project area. g/t of gold and 0.55 percent copper, and and subsequent exploration work indi- project. If you are in doubt about the On the other hand, in commenting on 162.0 meters grading 0.45 g/t of gold and cates a possibility of encountering skarn world-class status of this deposit, try this the issues swirling around the Pebble 0.21 percent copper. mineralization proximal to the contact of on for size: assay results from all 2006 project, Liberty Star said, “until it is clear The Whistler system extends over an intrusives. Welcome to Alaska, Goldmark and 2007 drill holes averaged 67 meters that permits to mine the Pebble deposits area measuring 750 meters by 460 meters Minerals Ltd! grading 3.61 grams of gold per tonne! will assuredly be awarded, we believe it and extends to a depth of at least 570 This information comes from more than is in the best interests of the (Liberty meters. Within this broadly mineralized Eastern Interior Star) and its shareholders that we pre- 82,000 meters of drilling in 2006 and envelope, the higher-grade Main Zone FREEGOLD VENTURES LTD. report- serve our capital and wait and see what 70,000-plus meters drilled in 2007. extends for 350 meters along strike, aver- see FREEMAN page 6 Follow-up drilling was conducted in the happens.” This statement is as clear as it East Acma zone where 2006 drilling gets: until the Pebble issue is settled; no returned 198 meters grading 3.65 grams more investment in Alaska for this com- of gold per tonne. pany. The 2007 results from this area are Adding yet another dimension to the nothing short of spectacular: DH-1556 Pebble deposit conundrum were intersected a total of 299 meters grading announcements by FULL METAL 5.26 grams of gold per tonne while DH- MINERALS LTD. that it has optioned its Pebble South copper-gold project to a 1564 intersected a total of 308 meters ® grading 4.60 grams of gold per tonne! subsidiary of mining giant FREEPORT- The Team That Delivers These three intersections project beyond MCMORAN COPPER AND GOLD INC. the current pit model boundaries and may Under terms of the agreement, Freeport represent potential to significantly expand may earn an initial 60 percent interest in the pit model to the southeast. the property by funding $1.8 million in As exciting as this news was, the mar- exploration expenditures over four years, kets were less than enthusiastic about an including a minimum of 2,000 meters of earlier announcement by Barrick Gold drilling in the first year. Freeport may that indicated that preliminary feasibility earn an additional 20 percent interest by, calculations suggested the capital costs at among other things, funding all expendi- Donlin were likely to be in the range of tures related to the property through and $3.8 billion to $4 billion. This cost will including a decision to build a mine on be finalized when the feasibility study is the property with a minimum capacity of completed in mid-2008 but suggests costs 30,000 metric tons per day of ore. will be 80-90 percent higher than the pre- If a production decision is made, vious estimate of $2 billion. As Bunker Freeport may fund Full Metal’s equity Hunt once said, “A billion dollars isn’t portion of construction financing to be what it used to be!” repaid through future production. The companies are planning an initial mini- In late November the ASSOCIATION mum 2,000 meter drilling program to OF ANCSA REGIONAL CORP. With 23,000 professionals in key energy consuming commence in the spring. PRESIDENTS AND CEOS and the But wait, there’s more! Full Metal and producing countries, we have expanded our ALASKA FEDERATION OF NATIVES joined to file a law suit to stop certifica- Minerals also announced that it optioned consulting; program management; integrated eight other copper-gold projects to a sub- tion of two ballot initiatives, alleging that engineering, procurement, and construction; and the initiatives, designed to stop develop- sidiary of mining mega-giant BHP operations and maintenance resources to meet ment of the controversial Pebble project, BILLITON. Under terms of the agree- violate the Alaska Constitution. ment, BHP Billiton can earn an initial 60 the needs of our clients throughout the world. The plaintiffs allege, in part, that the percent interest in the properties by initiatives violated federal law because spending $2.5 million over 36 months, they would prevent Alaska Native corpo- with an option to acquire a further 20 per- Delivering global energy projects rations from developing their mineral cent interest by spending another $3.5 million within the following 36 months. with safe and innovative solutions resources. The COUNCIL OF ALASKA Full Metal retains the right to request that ch2mhill.com/energy PRODUCERS, a coalition of mining com- panies, filed a separate suit with the same BHP Billiton finance its share of subse- purpose in mind. Stay tuned, sparks will quent pre-development costs, subject to continue to fly over this issue. the two parties agreeing to acceptable financing terms. In the event that BHP LIBERTY STAR URANIUM AND 6 PETROLEUM NEWS • WEEK OF DECEMBER 30, 2007 NORTH OF 60 MINING continued from page 5 target of hole MAN-PNI-001. The 2007 drill hole con- resource of 200 million tons of ore is being evaluated for firmed this stratabound disseminated mineralization future milling. FREEMAN along strike for at least 370 meters and downdip for greater than 340 meters. Northern Alaska ed additional drilling results from its Golden Summit INTERNATIONAL TOWER HILL MINES reports a ANDOVER VENTURES INC. said it has extended the project. Drilling results from an area between the Cleary recently completed airborne geophysical and geochemi- mineralized horizon at its Sun massive sulfide project to Hill mine prospect and the Tolovana mine prospect cal sampling program has expanded its Chisna porphyry 500 meters with an average width of 35 meters. The six returned gold intervals, including 36 feet averaging 2.36 copper project to an area of at least 3 square kilometers, intercepts within this zone averaged 1.05 percent copper, grams per metric ton of gold in hole 652; 36 feet averag- or 1.86 square miles. The target remains open to the 0.81 percent lead, 3.26 percent zinc, 42.9 grams per met- ing 2.57 g/t of gold in hole 659; 9 feet averaging 5.37 g/t south and east. ric ton of silver and 0.176 g/t of gold. of gold in hole 660; 12 feet averaging 6.46 g/t of gold in The average assay of 246 rock samples collected over In addition, 39 separate massive sulfide zones were hole 669 and 21 feet averaging 2.11 g/t of gold in hole a 7-square-kilometer, or 4.34-square-mile, area in and intercepted during the 2007 drill season, which average 672. around the alteration cap on the Chisna SE prospect was 6.82 meters thick over a strike length of 1,400 meters to These intervals suggest continuity of mineralization 0.37 grams per metric ton of gold, 1.4 g/t of silver and a depth of 250 meters. Average grade was 1.5 percent between the two prospects. The company also said sea- 0.08 percent copper. The company indicated that the copper, 1.0 percent lead, 3.85 percent zinc, 63.1 g/t of sonal bulk sampling and processing were completed in 2008 Chisna SE exploration program will include ground silver and 0.266 g/t of gold. late October. Final results from these programs are pend- geophysics to define sulfide bodies for later drill testing. LITTLE SQUAW GOLD MINES reported additional ing. MAX RESOURCE CORP. announced assay results placer gold drilling results from its Chandalar gold proj- INTERNATIONAL TOWER HILL MINES has report- from the final two diamond drill holes on the Gold Hill ect in the Brooks Range. Results from 60 of the 99 drill ed additional results from its Coffee Dome project near molybdenum project. Drill hole DH-07-05 returned holes completed over the placer target on Little Squaw Fairbanks. A total of 530 meters of trenching over the 0.0466 percent molybdenum disulfide over a core length Creek in 2007 average $15.94 per cubic yard in gold Main Target area in 2007 exposed veins with grades of of 822 feet, which included a higher grade intercept of over a thickness of 84 feet using a gold price of $600 per up to 167 grams per metric ton of gold in outcrop (72 352 feet of .0706 percent molybdenum disulfide. Drill cubic yard (equiv. to 0.026 ounces of gold per cubic samples ranging from 0 to 168 g/t of gold). Soil surveys Hole DH-07-04 was a vertical hole. This hole reports yard). defined two large gold anomalies covering an area meas- good molybdenum values over the entire core length of Additional drilling is planned to allow resource calcu- uring 3 kilometers, or nearly 2 miles, long and 1 kilome- 1000 feet, which included a 250 foot interval of 0.0603 lations to be completed. In addition, the company is ter, or 0.62 miles, wide. percent molybdenum disulfide. Additional drilling is planning to continue lode gold exploration elsewhere on Two main mineralized fault trends exist on the prop- planned in 2008. the project. erty, a steeply dipping north-northeast trend and a low FULL METAL MINERALS LTD. reported final assay SILVERADO GOLD MINES LTD. said it will begin angle (20-30 degrees) east-northeast trend. Fault-hosted results from the 2007 drill program at its Lucky Shot underground exploration on its Nolan Creek project. Two mineralization returned thin intervals grading up to 167 gold project north of Anchorage. The drill program tested areas have been targeted for possible underground lode g/t of gold with associated anomalous arsenic, antimony, three of the four known fault blocks on the Lucky Shot exploration: Pingle Bench and Workman’s Bench, both bismuth, tellurium and silver. shear and has extended the continuous gold mineraliza- of which lie along the Solomon shear zone. FULL METAL MINERALS LTD. reports that step-out tion to over 2,400 meters along strike and 700 meters Pingle Bench consists of a series of sub-parallel veins drilling at the LWM prospect on its Fortymile project has downdip. Highlights from the 2007 program include: containing gold grades up to 179 grams per metric ton of intersected 13.1 meters of massive sulfide mineralization • Hole C07-92 which returned 54.6 grams of gold per gold and antimony grades ranging up to 64.76 percent. averaging 13.3 percent zinc, 9.5 percent lead, 0.3 percent tonne over 0.98 meters in Murphy Zone; Veins are up to one foot, or 30.48 centimeters, in width copper and 159.2 grams per metric ton of silver in hole • Hole C07-105 which returned 17.3 grams of gold and predominantly composed of massive stibnite (anti- LWM07-17. Hole LWM-11 encountered semi-massive per tonne over 1.0 meters in Coleman Zone; mony sulfide). mineralization grading 4.9 percent zinc, 7.5 percent lead, • Hole C07-110 which returned 71.6 grams of gold Recent drilling at Workman’s Bench intersected an and 139.4 g/t of silver over 8.3 meters. per tonne over 0.5 meters in Coleman Zone; 80-foot-wide zone of mineralization containing numer- Drilling to date has encountered massive sphalerite, • Hole C07-112 which returned 1.3 grams of gold per ous sub-parallel zones of gold-antimony quartz veins. galena and chalcopyrite mineralization over 300 meters tonne over 0.5 meters in Coleman Zone; and The company plans to drive a tunnel sub-parallel to and of strike length, more than 200 meters below surface and • Hole C07-143 which returned 77.2 grams of gold below the 80-foot-wide mineralized zone. The tunnel is remains open for expansion in all directions. per tonne over 0.5 meters in Lucky Shot Zone. planned first to intersect a known placer gold channel Alaska Range Based on results during the past 3 years, the company where the company previously extracted coarse gold is considering whether to conduct additional surface nuggets. The tunnel would then be extended to intersect PURE NICKEL INC. reported initial results for the exploration or combined underground and surface explo- the 80-foot-wide Workman’s Bench mineralized zone. first six holes of a nine-hole, 3,359-meter drilling pro- ration or whether to make a positive construction deci- gram on its MAN property in the Alaska Range. A 77.4 sion. Metallurgical testing has been initiated, as well as Southeast Alaska meter thick intersection of disseminated sulfides averag- underground development planning. The company will Mining giant RIO TINTO PLC said it was entertain- ing 0.26 percent nickel, 0.12 percent copper, 139 parts- make a decision on a 2008 program at Lucky Shot dur- ing offers to buy its 70.3 percent interest in the Greens per-billion palladium and 62 parts-per-billion platinum ing the first quarter of 2008. Creek mine. The company indicated that the mine, along was discovered in drill hole MAN-PNI-001. Alaska-based DIAMOND GOLD CORP. reports it has with half a dozen other profitable assets, was being put The drill hole was terminated in mineralization due to submitted a large mine permit to the State of Alaska for on the auction block in an attempt to raise $10 billion to core recovery problems at 659 meters depth. Sulfide its Sable Elegance diamond and gemstone mine in the $15 billion in disinvestment funds. While this is not the mineralization remains open at depth. Yenlo Hills northwest of Willow. first time Greens Creek has been for sale, it seems a Previous drilling and recently completed electromag- Plans call for Phase 1 placer mining of 3 million good time to go fishing! netic and magnetic geophysical surveys had outlined a carats of diamonds and gemstones followed by open pit laterally continuous sulfide-bearing horizon that was the hardrock mining on the Sable diamond pipe where a see FREEMAN page 12 PETROLEUM NEWS • WEEK OF DECEMBER 30, 2007 7 NORTH OF 60 MINING

● YUKON TERRITORY Yukon placer gold mining on the upswing LeBarge: Investors buying out small operations and large operators picking up multiple properties lead trends in robust sector

By ROSE RAGSDALE William LeBarge, placer geologist for the Yukon crude ounces as of Dec. 17 and total value climbing 18 per- Mining News Geological Survey. cent to $37.5 million. That compared with total production The territory had 107 active placer mines in 2007, plus for 2006 of 58,294 ounces of placer gold. lacer mining heated up in the Yukon Territory this year 24 exploratory ventures. That compared with 106 active Given past years, LeBarge said he expected several as mostly family owned outfits mounted more explo- placer mines in 2006, and nine additional exploratory prop- thousand more ounces of gold to be reported as royalties P ration programs. erties. since November, but Yukon Government records showed The value of gold produced in the Yukon’s grow- With only two weeks left in the year, LeBarge reported ing placer mining sector shot up 18 percent, according to an 8.6 percent jump in placer gold production to 63,330 see YUKON page 11

● ALASKA NovaGold reviews Donlin drill results 152,000 feet of drilling confirm Donlin Creek as world-class deposit; mineralization runs deeper than previously suspected

By SHANE LASLEY Mining News

ovaGold Resources reported results Dec. 18 from 152,000 meters of N drilling completed in 2006 and 2007 at the Donlin Creek gold deposit in western Alaska. The exploration averaged 67 meters of mineralization per hole, grad- ing 3.61 grams, or 1.273 ounces, of gold per metric ton. The Vancouver, B.C.-based junior min- ing company said it expects much of the inferred resources at the project to be con- verted to measured and indicated resources and included in a new resource estimate expected in the first half of 2008. The 82,000 meters and 70,000 meters drilled in 2006 and 2007, respectively, were managed by NovaGold’s 50-50 Donlin Creek joint-venture partner Barrick Gold Corp. and were focused primarily on in-fill drilling to complete a feasibility study for the project. The assay results from the 2006 and 2007 drilling averaged 67 meters of mineralization per hole at 3.61 grams, or about 1.27 ounces of gold per metric ton. “Few ore bodies of this size and quality exist in the world,” said Rick Van Nieuwenhuyse, president and CEO of NovaGold, “and these drill results further confirm the potential of the Donlin Creek project. We look forward to advancing this world-class gold project to production depth. Follow-up drilling at East Acma in Deeper drilling at Acma and Lewis also Gold Corp. will work to assess the pro- under our new 50-50 agreement with 2007 encountered the two best intersects showed that mineralization runs up to 260 ject’s manpower requirements and develop Barrick.” ever encountered at Donlin. DH-1556 inter- meters deeper than previously thought. a detailed project schedule and work plan Drill hole DH-1144, drilled early in sected 299 meters of mineralization at 5.26 NovaGold also said the Donlin Creek for mine planning activities, NovaGold 2006, at the East Acma target area intersect- g/t, or 1.86 oz/t, of gold. DH-1564 was deposit appears to be open to expansion said. ed 198 meters of mineralization at 3.65 g/t, drilled in the same area and intersected 308 both laterally and at depth. In addition, the teams will review the or 1.29 ounces per metric ton, of gold and meters of mineralization averaging 4.60 g/t, Over the next few weeks, technical geologic and gold grade models in detail to extended well beyond the current pit limit or 1.62 oz/t of gold. teams from NovaGold and partner Barrick prepare the new resource estimate. ● 8 NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF DECEMBER 30, 2007

● NORTHWEST TERRITORIES Junior preps zinc-lead giant for comeback Tamerlane Ventures aims to tap rich deposit, technology advances to return once-profitable Northwest Territories mine to operation

By ROSE RAGSDALE potential at Pine Point is excellent. The Mining News property covers more than 175 square kilometers (109 square miles), including Dense Media Separation bold gambit to revive what was the original Pine Point claims and con- once Canada’s largest and most tiguous property to the west originally (DMS) A profitable zinc-lead mine is still on explored by Westmin Resources. It has a track thanks to the tenacity and total of 47 mined deposits and another 34 ORE innovation of Tamerlane Ventures Inc., a deposits that were delineated before the DENSE MEDIA SEPARATOR TAMERLANE VENTURES TAMERLANE INC. Blaine, Wash.-based junior mining com- mine was closed. pany led by some of the industry’s savvi- Historic but non-National Instrument est mining veterans. 43-101 compliant resources of the four Located just across Great Slave Lake best deposits measure a remarkable 678 150 tph modular from Yellowknife about 80 kilometers (50 million pounds of lead and 1.356 billion WASTE miles) east of the village of Hay River in pounds of zinc. The remaining deposits the Northwest Territories, the historic have never been mined before. HEAVY LIQUID Pine Point Mine produced some 4.5 mil- NI 43-101 is a Canadian Securities CONCENTRATE lion metric tons of zinc and 2 million met- Administrators rule that governs public ric tons of lead from a number of separate disclosure of scientific and technical Waste Minerals deposits over 22 years, starting in 1965. information about mineral projects. The Ore Minerals Cominco Ltd. (now Teck Cominco disclosures must come from an independ- The Dense Media Separation system will contribute to the new operation’s improved Ltd.) shut down the mine in 1987 due to ent and qualified person. economics. DMS essentially concentrates mined ore before it is fed into the main pro- climbing operating costs, plummeting Tamerlane tested and verified the his- cessing circuit at the mine. metals prices and a shift in operating torical resource calculations and believes focus. the claims contain at least 70 million met- Technologies key to Pine Point re-start Margaret “Peggy” Kent, who is credit- ric tons of ore grading 4.2 percent zinc Technology may be the key to success of a plan by Tamerlane Ventures Inc. to ed with launching a half-dozen compa- and 1.6 percent lead. The junior calcu- return the Pine Point zinc-lead mine in Northwest Territories to production. nies and raising more than $1 billion in lates the in-situ deposit value from just The junior mining company has pulled together three innovations in a development capital during her career, is Tamerlane’s four of the deposits at a minimum of $2.4 plan designed to resolve flooding and other critical problems that predecessor chairman. billion. Cominco Ltd. encountered in operating Pine Point before shutting down the mine in Longtime geologist and exploration 1987. manager Ross Burns is the company’s 2009 startup target At its peak, the Pine Point Mine pumped 60,000 gallons a day in a losing battle president and CEO. Today, Tamerlane is rapidly advancing against water flooding. With petroleum prices having nearly quadrupled since the In 2004, publicly traded Tamerlane toward startup in early 2009 at Pine Point, 1980s, a return to the diesel-fueled pumping is too costly. acquired 60 percent interest in the Pine targeting R-190, a particularly promising Tamerlane hopes to capitalize on relatively new “Freeze Ring” technology to min- Point property claims from Karst deposit with proven reserves of just over imize flooding problems when it begins mining the R-190 deposit. Investments LLC and picked up the 1 million metric tons grading 11.2 percent The technology involves surrounding a deposit with a perimeter of drill holes filled remaining 40 percent interest in 2006. with a refrigerant that effectively creates a wall of ice five times more impervious than The junior believes the exploration see TAMERLANE page 9 concrete around the mineralization. Costs relative to pumping are significantly reduced. Tamerlane estimates capital costs for the project will total less than $94 million, with the Freeze Ring technology and related infrastructure accounting for about $49 million. The scenario could result in the company recovering its capital costs within two years. The freeze curtain will extend from the surface to a depth of about 185 meters, sur- rounding the entire R-190 mineral deposit and underground infrastructure. Any excess water underground will be collected in a sump, pumped to the surface and then either re-used or discharged to an injection well for re-introduction into the groundwater sys- tem. Freeze-ring technology is currently being used in the Diavik diamond mine in the Arctic, and also in numerous other large-scale construction projects such as the famous big dig of Boston and in Seattle’s port area, the company said. Proven technology offers advantages Another more widely used innovation, “Dense Media Separation,” will contribute to the new operation’s improved economics. DMS essentially concentrates mined ore before it is fed into the main processing circuit at the mine. It is used around the world by such well-known companies as, Barrick Gold, CODELCO, Ashanti Goldfields, and Noranda. The process also has been used effectively by other lead-zinc mines, including Nanasivik, to upgrade their mill feeds, the company said. Tamerlane said the approach will eliminate the use of cyanide, a potentially haz- ardous chemical, from its ore processing system. Excluding cyanide from the process flow will be accomplished through the use of DMS, additional grinding, and inert chemicals such as lime and copper sulphate. The process also enables the use of a smaller mill and should give the R-190 deposit’s output sufficient grade and concentration that it can be directly shipped to smelters, providing the company with the ability to finance development of the rest of the deposits at Pine Point with proceeds from the direct sale of mine output without refinement, the company said. DMS testing is currently being carried out on a bench scale and Tamerlane plans to complete a pilot scale test within the next three months. Estimated recovery and

see TECHNOLOGY page 9 PETROLEUM NEWS • WEEK OF DECEMBER 30, 2007 NORTH OF 60 MINING 9 1°10' 114° 61° 115°

61° continued from page 8 Great Slave Lake X-17

LOCATION MAP V TECHNOLOGY

t ion 7N or t T-3 F lu o T so Re final concentrate grades for zinc and lead

X-4 9N are 94 percent/59.5 percent and 91.7 per- X-51 N X-52N P-24 X-15 X-53N X-54N Y-53N TAILINGS L-27 X-55N

L-30 VENTURES TAMERLANE INC. X-56N Z-53 N Y-55N K-32 W-17 Y-54N X-57N X-59N K-35 cent/77.1 percent, respectively. Z-57 N A-55 N-31 EXT O-28 N-32 Y-6 1N L-3 5 P-29 L-36 Y-62N O-32 0N N-33 VENTURES TAMERLANE INC. Z-6 P-31 L-37 Z-61N Y-65N X-64N P-32 I-46 X-65N 4 Z-64N J-4 M-40

N-38 X-68N AIRPORT X-71N N-42 K-48

A-70 O-42 P-41 Vertical conveyor K-51 M-48 K-53 OWNSITE K-57 T N-50 M-52 W-85 YBM I-65 K-60 O-53 V-90 K-62 to minimize mine footprint HINGE ZONE

K-66N/S M-63 M-6 2 J-69 J-68 L-65 K-68 M-64 M-67 A third innovation at Pine Point will K-77 T-58 R-61

S-65 R-67 be a vertical shaft and conveyor system

N-81 LEGEND

X-71

. 6 J-68 NO Y PineK-35 Point A designed to move ore and waste from G-03 W H L-35 HIG Z-155 CLAIM OUTLINE N-33

-46 V V-90 W-1 9 underground workings to the surface.

T-799 X-25 N-99 W-19

O-555 Claim Location R-190 V O-556 Mined material will enter a primary 499 ToHay P- River 40 km KENT BURNS GROUP L. r ve crusher located at the bottom of the shaft i GREAT SLAVE REEF R lo fa uf B Map CLAIM LOCATION MAP showing Past Mining and the vertical conveyor will lift materi- T & S o F Remaining Resources mi or Feasibility Area th t NTS: 85B UT M Z 2 0 5km 00 DATE: NOV 15, 2001 D2 .DWG km al from the mine at an effective rate of V 160 metric tons per hour. The vertical A third innovation at Pine Point will be a continued from page 8 vertical shaft and conveyor system More than 20,000 holes have been conveyor requires less energy to operate designed to move ore and waste from than conventional hoisting and has the underground workings to the surface. drilled in Pine Point claims, TAMERLANE ability to move large volumes of materi- outlining a total resource of 138 and development of the infrastructure al at a constant rate of speed, which needed to set its plan in motions will take zinc and 5.5 percent lead. R-190 also million metric tons, with some 70 boasts indicated resources of nearly 11 allows for increased efficiency in pro- 12-15 months. The underground work- million metric tons grading 4.69 percent million metric tons remaining. cessing and reduces material handling ings will be mined using a concrete lined zinc and 2.43 percent lead. It contains an and stockpiling, Tamerlane said. It also main shaft, vertical conveyance system, River. The facility will be used for man- estimated minimum $550 million worth will minimize the mine’s footprint. and rubber-tired diesel/electric equip- agement office space, employee parking, of lead and zinc at today’s prices, the Virtually all waste contained in the 1 ment. In addition to the vertical convey- busing to and from the mine site and var- company said in a recent feasibility study million metric tons to be extracted from or, the main shaft also will use a service ious other purposes, the company said. that recommended mining begin as early the R-190 deposit will be returned under- hoist for moving personnel and materials. ground for backfilling purposes. This as the second quarter of 2008. Substantial exploration potential A secondary escape-way and ventilation Tamerlane also completed an environ- approach eliminates the need for perma- shaft also will be installed to allow flow- mental assessment required for land and More than 20,000 holes have been nent tailings dams, the company said. through ventilation. Tamerlane estimates that construction water permits. The next step is to work drilled in Pine Point claims, outlining a —ROSE RAGSDALE with the Mackenzie Valley Land and total resource of 138 million metric tons, Water Board to finalize the permits, with some 70 million metric tons remain- which are anticipated in the first quarter ing. Some areas of the claim group are of 2008, according to investor relations either under-explored, or have not had manager Brent Jones. any exploration at all. “This will put Tamerlane on track to The exploration potential of the sur- begin construction in 2008 and operations rounding territory has not been deter- in 2009,” he said. mined, but is considered significant. Part of the regulatory review process Since the system’s geology has included extensive filings with the demonstrated a reliable past discovery Mackenzie Valley Environmental Impact rate of at least one deposit for every 1.5 Review Board, including State of Alaska kilometers, there is the potential for the reports on Teck Cominco’s operations at discovery of at least another nine the Red Dog Mine in Northwest Alaska. deposits, according to Tamerlane. Tamerlane is also working on financ- Initial mine life is projected for eight ing for the project, but the company has years. not commented on when financing may “However, approximately 40 million be received. (metric tons) of resources are currently the subject of our 2008 drill program that Infrastructure, labor will enable Tamerlane to extend the mine agreement in place life,” Jones said. Once mining begins at the R-190 A huge amount of operating and deposit, Tamerlane aims to then access exploration infrastructure left behind by nearby deposits. New drilling of 15-18 Cominco in the 1980s will help to jump- holes covering some 3,600 meters began start Tamerlane’s operation. That is one of Nov. 1, and is expected to be completed two major reasons the relatively small by the end of December. junior is hoping to spend as little as $128 Tamerlane also finalized plans last million in initial development and work- month to drill up to 16 other deposits at ing capital to launch operations at Pine Pine Point in early 2008 with more than Point. 100 holes, totaling up to 5,000 meters, Cominco left behind roads, a hydro planned. The goal is to convert the 40 plant, a railway line, drill cores from 20 million metric tons of historical resources years of exploration, as well as 35 defined into NI 43-101 compliant resources. deposits. The next round of exploration is set to Advances in technology since begin in January, and is expected to con- Cominco shut down the mine are another tinue through late March or early April. major factor in the project’s brighter The results of this drilling program will prospects. Tamerlane aims to bring be analyzed and reviewed for long-term together a trio of mining and construction mine planning, Tamerlane said. ● technologies to resolve several operating difficulties at Pine Point, including sub- stantial flooding. Jones said the Pine Point Project will operate 24/7 at a production and process- ing rate of 2,800 metric tons per day and employ 179 full-time workers during operations. The junior has signed agreements with several First Nations designed to outline job and business opportunities at the min- ing project and to ensure long-lasting relationships between the company and the indigenous groups. Tamerlane also signed a lease-to-pur- chase agreement in November for a 4,000-square-foot office building in Hay 10 NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF DECEMBER 30, 2007

● ALASKA Hemis explores for gold near Cook Inlet Las Vegas-based international resource company teams with Aspen Exploration to complete underwater, beach surveys on eastern shore

MINING NEWS iments. Concurrently, a shallow coring program was Hemis: gravel encouraging conducted by Kinnetic Labs using a Vibracore (R) drill emis Corp., an international resource company, Oliver said the first samples have been recovered rig. The Vibracore system uses a vibrating drill head to said it has completed the first phase of a gold from the offshore magnetic anomalies. “Some of us have penetrate through unconsolidated sediments. Vessels for H exploration program in Alaska. The Anchor Gold been wondering for over 20 years what we would dis- both programs were provided by Ocean Explorers. project in the Cook Inlet of Alaska is a venture cover down there. Finding gravel is encouraging as gold Both programs were planned to coincide with low between Las Vegas-based Hemis and Aspen Exploration particles are typically associated with coarse sediments tides that occurred near the end of September, Hemis Corp. in placer deposits.” said. While the geophysical survey was completed dur- Hemis said the emphasis of the Anchor Gold project The samples will undergo size sorting analysis and ing this window, high seas thwarted the Vibracore is exploring for gold in offshore deposits along the east- heavy mineral separation at Alaska Assay Labs in drilling. The drilling program was delayed for a week ern margin of Cook Inlet. Previous work by Aspen Fairbanks, Alaska. The heavy mineral fraction will and resumed during the next low tide cycle in October. Exploration documented offshore aeromagnetic anom- undergo visual examination for gold particles as well as Ultimately, cores were recovered from 11 of the 15 tar- alies in addition to confirming the presence of gold along fire assay. The results will be used to determine the get areas. the active beaches. course of future exploration, the company said. “I have nothing but good things to say about all of our Due to the size of the project area, Hemis said the Hemis, a precious metals exploration company, is consultants and contractors that enabled this program to Anchor Gold project could have great potential. incorporated in Nevada, but has a head office in Zurich, happen,” said Douglas Oliver, chief geologist at Hemis. The company said permits were issued by federal and Switzerland. “Cook Inlet is a difficult place to work at any time of the State of Alaska agencies to allow for exploration in Denver-based Aspen Exploration is primarily focused year and autumn can be especially tricky. The profes- September and early October. Two exploration programs on natural gas exploration and production activities in sionalism that was shown by all of the parties involved were run concurrently. A geophysical survey consisting northern California, but the company says it has engaged was the primary reason for this program’s success.” of a fathometer, side-scan sonar and a sparker survey in successful projects in the past, involving gold in Gravels made up the basal sediments in 9 of the 11 was conducted by Watson Geophysics. The goal of the Alaska, uranium in Wyoming, and oil and gas in the cores recovered. sparker survey was to image the shallow subsurface sed- Rocky Mountain states and Texas. ●

● ALASKA Study: Red Dog area subsistence foods safe Six-year study shows dust from zinc, lead mining poses no significant health and environmental hazards, but must be monitored

MINING NEWS out restrictions. holders, including local village residents,” those of various stakeholders,” said Rich eck Cominco Alaska Inc. released the The final report of the “DeLong said Wayne Hall, Red Dog Mine’s Senior Sundet, DEC project manager. “We will final report Nov. 29 of a six-year study Mountain Regional Transportation System Environmental Coordinator. review the final report, and look forward to T that concludes it is safe to consume Fugitive Dust Risk Assessment” incorporat- Ore concentrates (ground-up ore/rock) continuing our work with Teck Cominco on subsistence foods in all areas near the ed formal comments and input from a wide that are trucked from Red Dog Mine along the development of a risk management plan Red Dog Mine in northwestern Alaska with- range of government agencies and stake- the DMTS road have escaped into the envi- to address current and future risks.” ronment over time, and there were concerns While the study concluded that subsis- that metals within the ore concentrates may tence foods are safe for people to consume, have affected subsistence foods and the it identified some ecological effects that will ALASKA MINERS ASSOCIATION environment. require ongoing risk management. These st Teck Cominco voluntarily undertook the include changes to the plant community 21 BIENNIAL FAIRBANKS ALASKA study in 2001 with the oversight of the observed in areas close to the port, road, and Alaska Department of Environmental mine, as well as potential effects to ptarmi- MINING CONFERENCE Conservation. It was designed to evaluate gan living close to the port and mine. ARCTIC INTERNATIONAL MINING SYMPOSIUM the potential for risk to human and environ- “The results of Teck Cominco’s Risk MARCH 18-22, 2008 mental health from exposure to metals in Assessment are good news for NANA Westmark Fairbanks Hotel & Conference Center fugitive dust in areas surrounding the Regional Corporation, Kivalina, Noatak and For information please call or email: DMTS road, DMTS port and Red Dog the people of the NANA Region,” said David Szumigala (907) 451-5025 [email protected] Mine, which is the world’s largest zinc pro- Marie Greene, CEO of NANA Regional Information located at www.arcticminers.org ducer. Corp. “However, despite the study’s positive “We believe Teck Cominco has been conclusions, we must immediately under- Technical Sessions - March 19-21 responsive in addressing our concerns and take actions to reduce the remaining risks Placer Deposits & Industrial Minerals now and in the future.” Impact of Arctic Climate Change Teck Cominco said it would proactively Arctic Mineral Deposits I & II address the issues with a risk management Infrastructure Projects Related to Mining plan that will identify actions to minimize Northern & Interior Alaska Geology potential risk to human health and the envi- Mine Operations ronment over the life of the mine, Hall said. The plan will identify the most appropri- ate combination of actions to achieve the overall goal of minimizing risk to human Field Trips health and the environment surrounding the Pogo Mine – March 18 DMTS and outside the Red Dog Mine Fort Knox Mine – March 22 boundary over the life of the mine, the com- pany said. The risk management plan also will build Short Courses - March 18 upon ongoing efforts by Teck Cominco to Alaska Industrial Minerals reduce dust emissions, including the use of Mine Permitting Process newer trucks, installation of truck-washing facilities, and significant upgrades to unloading, storage, transfer, barge-loading, Miners Hall of Fame - March 20 and ship-loading facilities. Miners Banquet - March 21 The final report must now undergo review and acceptance by DEC. The study and a companion fact sheet can be accessed at MINING PRODUCT & SERVICES TRADE http://www.dec.state.ak.us/spar/csp/sites/red SHOW March 19-21 dog.htm. DAILY LUNCHEON SPEAKERS A printed copy is available for viewing at AMEREF RAFFLE (Alaska Mineral & Energy Resource Education) the DEC office at 555 Cordova Street in Anchorage. Please contact Rich Sundet at 907-269-7578, or [email protected], to schedule an appointment. ● PETROLEUM NEWS • WEEK OF DECEMBER 30, 2007 NORTH OF 60 MINING 11

● ALASKA Mining and fish can coexist Pebble spokesman tells Anchorage Chamber that there is precedent for enviro-responsible mining; partnership sets up in Anchorage

By SHANE LASLEY “By the time we finish our exploration work in Looking toward 2008 Mining News 2007 and finalize our new resource estimate Infrastructure would be another important factor for ean Magee, spokesman for The Pebble Limited (Pebble) will probably be the largest resource the mine. The partnership has proposed building a 100- mile road from Pebble to a saltwater port on Cook Inlet. Partnership, told members of the Anchorage of its type in the world.” Chamber of Commerce Dec. 3 that the Pebble Mine The company is also looking at electrical power com- S ing from a 300 megawatt gas-fired generator at Nikiski. Project could be developed in an environmentally “Environmental and social factors will weigh heavily If Pebble is developed as an underground mine, more and socially responsible manner. on what we ultimately propose,” said Magee, when “There are lots of precedents in our part of the world power will be required for its operations. The partnership speaking about whether Pebble would be an open pit is working with Homer Electric Association on alterna- where mining does coexist with fisheries,” Magee told mine, underground mine, or a combination. the Anchorage audience. tives for supplying the power needed to operate the The Pebble Mine would have a footprint of about 15 mine. He gave examples of several square miles, about 24 square kilometers. Though it will modern large-scale mines in Alaska Magee said the partnership is also working with local not be a small project, Magee said Pebble’s impact will communities to ensure that they benefit from infrastruc- and British Columbia that are not all be within that area. only coexisting with the fish habitat ture put in place to operate the mine. but, in some cases, improving it. Mine not imminent At Pebble the drill season is winding down and assay Even with the existence of eight results on 200,000 feet drilled in 2007 are still coming in. Magee told the audience that despite popular belief, large mines, including Canada’s “By the time we finish our exploration work in 2007 Pebble Mine is not imminent. He said the partnership has largest copper mine, in the Fraser and finalize our new resource estimate, (Pebble) will yet to decide whether to develop Pebble and will not do River Valley of British Columbia, probably be the largest resource of its type in the world,” so until the entire mineral resource has been defined and the salmon population is healthy Magee said. Sean Magee, direc- environmental and socio/economic studies have been and is on the rise, Magee said. The Pebble Partnership expects to have a new tor of public affairs completed. The earliest, that this could happen, would be He cited Red Dog, Greens for The Pebble resource estimate incorporating the results of 2007 in 2009. Creek, and Fort Knox mines as Partnership Ltd. drilling in the first quarter of 2008. If the Partnership decides to move forward with prime examples of how large mines in Alaska have been The partnership still must finalize a budget for the Pebble, another three years of permitting will be required environmentally safe and responsible. 2008 drill season, but Magee told Mining News that it before mining could begin, making 2012 the earliest pro- will be a similar program to the one executed in 2007. Environmental and social duction date for the mine project Next year, the partnership aims to focus entirely on If the Pebble Mine Project is developed, it would have factors will affect mine plan Pebble East, continuing to define the resource by con- a significant impact on Alaska’s economy, Magee said. verting inferred resources to the measured and indicated The Pebble Limited Partnership is a 50-50 venture Billions in tax revenue also would go to the state. The category, Magee said. Step-out drilling to the north and between Anglo American PLC and Northern Dynasty proposed mine would employ some 1,000 full-time south where Pebble East is still open also will be con- Minerals Ltd. to explore and develop the Pebble Project, workers for the mine’s entire operating life, an estimated ducted, he said. a mammoth copper-gold-molybdenum property in 50 to 100 years. Magee told Mining News that the current focus of the Southwest Alaska. It contains an estimated 7.45 billion Magee said Pebble’s developers employed about 600 company is putting together its project team in Alaska. tons of ore hosting 67.3 billion pounds of copper, 81.7 people at the project this year, 80 percent of whom were He said senior leadership for Anglo American, including million ounces of gold, and 4.05 billion pounds of molyb- Alaskans and 125 workers came from communities in the the president and CEO, will be working out of the Pebble denum. Bristol Bay region. About $8 million was spent on wages Partnership corporate office in Anchorage. There are By the end of 2007, $85 million will have been spent and contracts in Bristol Bay communities this year. currently about 10 people working there, and that num- on socio/economic and environmental studies at the Magee said that the partnership is committed to the ber will increase to some 30 to 40 employees when the Pebble Project. training and hiring of locals. office is fully staffed in the spring.●

continued from page 7 Recent trends in the sector include small, inactive mines being purchased by investors YUKON from southern Canada and larger operators acquiring multiple properties and growing only a few more ounces by mid-December. in size, LeBarge said. More than 100 years after the discovery Yukon officials also report a shift to min- of gold in the Yukon, placer mining is still ing in traditional unglaciated areas and an important sector in the Yukon’s econo- GEOLOGICAL SOCIETY YUKON expect placer mining and exploration to my. More than 16.6 million crude ounces, increase in the territory over the next few or 518 metric tons, of placer gold have been A-1 Cats (365334 Alberta Ltd.) has been min- years. produced in the Yukon — at today’s prices ing on Dominion Creek since 2002. It is one of “I think as far as placer mining and that would be worth more than $9 billion. the largest operations in the Klondike district, processing more than half a million cubic exploration activity, we will see an increase Placer mines in the Yukon are still most- yards of pay gravels and overburden annual- (in 2008), although it’s difficult to say how ly family owned with fewer than four ly. A-1 Cats also has received several awards much,” LeBarge said. “Fuel prices and the for outstanding reclamation practices. employees. About 350 people were directly new standards for water quality, which take employed at 115 Yukon placer mines in watersheds, down 8 percentage points from effect next season, will be major factors that 2006, and several hundred more were 26.5 percent of total 2006 production to could offset much of the increases in mining employed in businesses and industries that 18.4 percent of this year’s output. activity related to higher gold prices.” ● serve the placer mining sector. Scattered over the southwestern and cen- tral areas of the territory, most of the placer operations are clustered in traditional min- ing areas from Whitehorse to Dawson. YGS reported 10 operations moving to new drainages, nine outfits being sold, five new startups and four operations shutting down. Indian River, Dominion Creek lead pack Placer mines on the Indian River and Dominion Creek, and their tributaries, accounted for 24,421 ounces, or 38.6 per- cent of total production this year, compared with 18,008 ounces, or 30.9 percent in 2006. Production at the Forty Mile, Sixtymile and Moosehorn range also rose, accounting for 23 percent of total output, up from 16 percent last year. The largest drop in production occurred on the Klondike, Bonanza and Hunker 12 NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF DECEMBER 30, 2007

● ALASKA Goldmark Minerals explores Southwest Alaska Calgary-based exploration company purchases interest in copper-gold claims in SW Alaska; geomagnetic signature similar to Pebble

By SHANE LASLEY The property is divided into two claim blocks, the D during Geocom’s exploration work, but no economically Mining News claims and H claims. Goldmark purchased Geocom’s 38.5 significant mineral deposits have yet been discovered. percent interest in the 88 State of Alaska mining claims in algary-based exploration company Goldmark the D block and 52.5 percent interest in the H block which Exploration to begin in 2008 Minerals Ltd. said it has completed the acquisition of consists of mostly state claims but does contain a small Goldmark CEO Peter Barker told Mining News that C Geocom Resources Inc.’s ownership interest in the number of federal claims. more than $2 million will be spent on exploration at Iliamna project in southwest Alaska. Geocom acquired its interest in Iliamna under terms of Iliamna in 2008. The work will begin with a geophysical Goldmark CEO, Peter Barker told Mining News that an option agreement with TNR Gold. Goldmark will be the and geochemical survey that will encompass the entire tar- the transfer to the company’s wholly owned subsidiary, operator of the exploration venture. get area. Based on the results of this broad-scale survey, the Goldmark Alaska, will be complete by early January. The Calgary junior said nearly $3.5 million has been company plans to complete 10,000 meters of drilling in A 49 percent interest in Geocom’s Santa Rosa and spent on exploration on the Iliamna property. 2008. Marcelita properties in central Chile was also included in Initial magnetic, IP and geological surveys were done Barker said 10,000 to 20,000 meters of drilling per year the $200,000 purchase. on the property by Rio Algom Exploration in 2000 and also are planned for 2009 and 2010. were taken over by BHP Billiton. The results of the surveys Geocom President John Hiner will be project manager Iliamna property show a similar geomagnetic signature to the Pebble deposit and consultant for both the Iliamna and Chile projects. The Iliamna property, a porphyry-copper property con- and suggest to Goldmark that it could host a similar por- Hiner has been involved with the properties since they sisting of 237 claims covering 318 square kilometers, or phyry gold-base metal deposit, its officials say. were staked, and Goldmark believes that it will benefit about 197 square miles, is 80 kilometers, or 50 miles, Geocom drilled four holes on the H claims and six holes from his experience and familiarity with the properties, the southwest of the Pebble project. in the D claims. Copper-gold mineralization was found company said. ● continued from page 6 g/t of gold, 55 g/t of silver, 2.52 percent copper and 5.31 percent zinc. FREEMAN The company also said that under- ground tunneling has advanced 120 QUATERRA RESOURCES announced meters in from the portal entrance and an acquisition from Juneau-based JEDI that the first underground drill station had Syndicate of the Herbert Glacier gold been constructed and underground drilling project north of Juneau. Mineralization is commenced. The 9,000-meter under- hosted in four main composite vein-fault ground diamond drilling program is structures that contain ribbon structure designed to test over two kilometers of quartz-sulfide veins. The structures strike massive sulfide hosting stratigraphy, east-west and dip steeply, mostly to the including about 1,500 meters of unex- north. plored stratigraphy between the Only one of the four known vein sys- Mammoth and Lookout zones (now tems was drilled in 1986 and 1988. A total known as the ‘North Limb’). of 199 rock chip samples were collected The program also will evaluate about in 2007 with 94 samples returning values 600 meters of depth extension at the greater than 1 gram per metric ton of Lookout zone. gold, 33 samples returning more than 10 UCORE URANIUM INC. has reported g/t of gold and 12 samples returning more additional assay results from its nine-hole than 34 g/t of gold. A 1.5-foot banded diamond drill program at the Bokan quartz vein with visible gold assayed 81.9 Mountain uranium project in southeast g/t of gold. Alaska. Highlights of this drilling include Veins typically pinch and swell, but to 5 percent net smelter return based on spans 500 vertical meters. Highlights hole LM07-01, which intersected 38.28 individual veins are as much as 14 feet the gold price. Quaterra has a work com- include hole CJ07-01 at the Crackerjack meters grading 0.569 percent U3O8 thick and composite veins were found up mitment of at least $25,000 for the first mine, which returned 3.21 meters grading including 2.68 meters grading 1.238 per- to more than 20 feet across. The veins are year and $50,000 for each year thereafter. 4.94 grams per metric ton of gold and 5.7 cent U3O8 and 3.9 meters grading 2.43 competent, but occur within halos of Quaterra is planning a 3,000-foot core g/t of silver, including 0.71 meters grading percent U3O8 and hole LM07-02 which altered quartz diorite, and are generally drilling program on the project in 2008. 20.9 g/t of gold and 19.5 g/t of silver. intersected 3.15 meters grading 0.622 per- marked on surface by deep trenches erod- ALTAIR VENTURES INC. and joint Eight hundred meters away at the cent U3O8. ed from the incompetent altered host venture partner FULL METAL Hollis tunnel, hole CJ07-05 intersected The company also said a detailed air- rocks. Gold is accompanied by arsenopy- MINERALS LTD. reported assay results 1.07 meters grading 4.15 g/t of gold and borne radiometric and magnetic survey rite, pyrite and galena with lesser amounts from an eight-hole, 1,015-meter drilling 20 g/t of silver. Farther south at the old was completed over the project. The sur- of scheelite, chalcopyrite and sphalerite. program at the CJ gold project near Craig. Dawson mine, drill hole CJ07-6 intersect- vey confirmed and better defined previ- Under terms of the agreement, The drilling program intersected gold ed 2.05 meters grading 9.56 g/t of gold ously known radiometric anomalies and Quaterra must make an initial payment of mineralization in three locations, spanning and 76.7 g/t of silver. outlined several new areas where mineral- $12,000 and annual payments escalating more than 2,000 meters of strike length. NIBLACK MINING CORP. reported ization had not been found previously. from $12,000 to $30,000 over the first 11 Several historic producing gold mines additional drill assays from its Niblack Of particular interest is a zone of high years. Payments are an advance royalty occur within a structural corridor that now massive sulfide property near Ketchikan. radiometric values extending for over two calculated on a sliding scale of 3 percent has a strike length of 3,200 meters and In the Trio zone, drill hole LO-206 inter- kilometers to the southeast of, and on sects 10.6 meters of massive sulfide and strike with, the high grade I&L Zone. stockwork mineralization grading 3.35 This radiometric anomaly coincides with grams per metric ton of gold, 49 g/t of sil- a series of quartz veins and pegmatite ver, 3.46 percent copper, and 4.49 percent dikes. zinc. Drill hole LO-207, testing the sul- Permitting for an expanded drill pro- fide horizon 40 meters downdip of LO- gram in 2008 is now under way, with a 206, intersects 5.67 meters grading 4.06 plan to resume drilling in March. ●

• Environmental Assessment • Environmental Data Quality • Engineering, Design, and and NEPA Permitting Management Services Construction Services • Natural Gas Pipeline • Contaminated Sites • Natural Gas Pipelines and Permitting Closure—Innovative, LNG Facilities • Worldwide Technology- Technical Solutions • Hydroelectric and Fossil Based Pipe Fabrication • Homeland Security Fuel Power Plants Facilities • Refining and Petrochemical Facilities www.shawgrp.com 7D 2000 W. INTERNATIONAL • AIRPORT RD. SUITE C-1 • ANCHORAGE, AK 99502 06200

PHONE: 907.243.6300 • FAX: 907.243.6301 M 29 Companies involved in Alaska and DIRECTORY northwestern Canada’s mining industry

The Red Dog mine in northwest Alaska.

Mining Companies Usibelli Coal Mine Air Liquide Fairbanks, AK 99701 Anchorage, AK 99518 Contact: Bill Brophy, vp cust. relations Contact: Brian Benson Fairbanks Gold Mining/Fort Knox Gold Mine Phone: (907) 452-2625 • Fax: (907) 451-6543 Phone: (907) 273-9762 • Fax: (907) 561-8364 Fairbanks, AK 99707 Email: [email protected] • Web site: www.usibelli.com Email: [email protected] Contact: Lorna Shaw, community affairs director Other Office Air Liquide sells, rents, and is the warranty station for Phone: (907) 488-4653 • Fax: (907) 490-2250 P. O. Box 1000 • Healy, AK 99743 Lincoln, Miller, Milwaukee, Victor and most other Email: [email protected] • Web site: www.kinross.com Phone: (907) 683-2226 welding equipment and tool manufacturers. Located 25 miles northeast of Fairbanks, Fort Knox is Usibelli Coal Mine is headquartered in Healy, Alaska Alaska’s largest operating gold mine, producing and has 200 million tons of proven coal reserves. Alaska Cover-All 340,000 ounces of gold in 2004. Usibelli produced one million tons of sub-bituminous 6740 Jollipan Crt. Anchorage, AK 99507 Niblack Mining Corp. coal this year. Contact: Paul Nelson, mgr. Suite 615-800 W. Pender St. Vancouver, BC V6C 2V6 Service, Supply & Equipment Phone: (907) 346-1319 • Fax: (907) 346-4400 Contact person: Paddy Nicol E-mail: [email protected] Contact: Scott Coon Phone: (604) 682-0301 ext. 106 3M Alaska Phone: (907) 646-1219 • Fax: (907) 646-1253 Fax: (604) 682-0307 11151 Calaska Circle Email: [email protected] E-mail: [email protected] Anchorage, AK 99515 National Call Center: 1-800-268-3768 Website: www.niblackmining.com Contact: Paul Sander, manager We are the Alaska dealers for Cover-All Building Phone: (907) 522-5200 NovaGold Resources Inc. Systems. Steel framed, fully engineered, LDPE fabric Fax: (907) 522-1645 2300 – 200 Granville Street covered, portable buildings in 18 to 270 foot widths Email: [email protected] Vancouver, BC V6C 1S4 and any length. Contact person: Ariadna Peretz Website: www.3m.com Phone: 1 (866) 669-6227 Serving Alaska for over 34 years, 3M Alaska offers total Alaska Earth Sciences Fax: (604) 669-6272 solutions from the wellhead to the retail pump with a Anchorage, AK 99515 E-mail: [email protected] broad range of products and services – designed to Contact: Bill Ellis and Rob Retherford, owners Other office: improve safety, productivity and profitability. Phone: (907) 522-4664 • Fax: (907) 349-3557 Alaska Gold Company E-mail: [email protected] P.O. Box 640 Ace Transport A full service exploration group that applies earth 115 6th Avenue Anchorage, AK 99502 sciences for the mining and petroleum industries pro- West Nome, AK 99762-0640 Contact: Henry Minich, owner viding prospect generation, evaluation and valua- Website: www.novagold.net Phone: (907) 243-2852 • Phone: (907) 229-9647 (cell) tion, exploration concepts, project management, NovaGold Resources Inc. is a gold and copper company Fax: (907) 245-8930 • Email: [email protected] geographic information systems and data manage- engaged in the exploration and development of min- Specializing in heavy hauling. Equipment includes 85- ment. We also provide camp support and logistics, eral properties in Alaska and Western Canada. ton lowboy. geologic, geochemical and geophysical surveys.

Rimfire Minerals Corp. Aeromed International Alaska Frontier Constructors Vancover, BC V6C 1G8 Canada Anchorage, AK 99503 P.O. Box 224889 Contact: Ahnna Pildysh, Mkt. Coordinator Contact: Brooks Wall, director Anchorage, AK 99522-4889 Phone: (604) 669-6660 Phone: (907) 677-7501 • Fax: (907) 677-7502 Contact: John Ellsworth, President Fax: (604) 669-0898 Email: [email protected] • Web site: Phone: (907) 562-5303 Email: [email protected] • Web site: www.ykhc.org Fax: (907) 562-5309 www.rimfire.bc.ca Aeromed International is an all jet critical care air Email: [email protected] Gold and silver projects in Alaska, Yukon, BC and ambulance fleet based in Anchorage. Medical crews Alaskan heavy civil construction company specializing Nevada. Preferred partner of senior mining firms. are certified Flight Nurses and certified Flight in Arctic and remote site development with the experi- Partnered with the world’s three largest gold produc- Paramedics. ence, equipment and personnel to safely and efficient- ers. see next page 14 NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF DECEMBER 30, 2007 ly complete your project. Lynden Logistics • Lynden Transport Anchorage, AK 99502 Alaska Regional Council of Carpenters Advertiser Index Contact: Jeanine St. John 410 Denali St, #100 Phone: (907) 245-1544 • Fax: (907) 245-1744 Anchorage, AK 99501 3M Alaska ...... 9 Email: [email protected] Contact: Kathleen Bugbee, business development Ace Transport The combined scope of the Lynden companies includes Phone: (907) 274-2722 Aeromed International Fax: (907) 274-2727 Air Liquide truckload and less-than-truckload highway connec- Email: [email protected] Alaska Cover-All ...... 9 tions, scheduled barges, intermodal bulk chemical Website: www.ubcalaska.org Alaska Dreams hauls, scheduled and chartered air freighters, domestic Training and representing skilled labor for quality con- Alaska Earth Sciences ...... 4 and international air forwarding and international sea tractors. Alaska Frontier Constructors forwarding services. Alaska Steel Co. Alaska Railroad Alaska Regional Council of Carpenters...... 3 MRO Sales 1200 W. Dowling Alaska Steel Co. Anchorage, AK 99518 Anchorage, AK 99518 Arctic Controls Contact: Don Powell Contact: Joe Lombardo, vice president Arctic Foundations...... 15 Phone: (907) 248-8808 • Fax: (907) 248-8878 Phone: (907) 561-1188 • Toll free: (800) 770-0969 (AK Bombay Deluxe Restaurant Email: [email protected] only) Calista Corp...... 4 Website: www.mrosalesinc.com Fax: (907) 561-2935 CH2M HILL ...... 5 MRO Sales offers products and services that can help Email: [email protected] Construction Machinery ...... 16 solve the time problem on hard to find items. Fairbanks Office: Dowland-Bach 2800 South Cushman Egli Air Haul Northern Air Cargo Contact: Dan Socha, branch mgr. Fairbanks Gold Mining/Fort Knox Gold Mine . . . . 6 3900 W. International Airport Rd. Phone: (907) 456-2719 • Fax: (907) 451-0449 Foundex Anchorage, AK 99502 Kenai Office: GPS Environmental Contact: Mark Liland, acct. mgr. Anch./Prudhoe Bay 205 Trading Bay Rd. Jackovich Industrial & Construction Supply. . . . . 15 Phone: (907) 249-5149 • Fax: (907) 249-5194 Contact: Will Bolz, branch mgr. Judy Patrick Photography...... 7 Email: [email protected] • Website: www.nac.aero Phone: (907) 283-3880 • Fax: (907) 283-3759 Lynden Serving the aviation needs of rural Alaska for almost Full-line steel and aluminum distributor. Complete pro- MRO Sales 50 years, NAC is the states largest all cargo carrier mov- cessing capabilities, statewide service. Specializing in Nature Conservancy, The ing nearly 100 million pounds of cargo on scheduled low temperature steel and wear plate. Northern Air Cargo ...... 2 flights to 17 of Alaska’s busiest airports. NAC’s fleet of NovaGold Resources Arctic Controls DC-6, B-727, and ATR-42 aircraft are available for char- Pacific Rim Geological Consulting ...... 8 Anchorage, AK 99501 ters to remote sites and flag stops to 44 additional Panalpina ...... 9 communities. Contact: Scott Stewart, president PTI Group Phone: (907) 277-7555 • Fax: (907) 277-9295 Rimfire Minerals...... 12 Email: [email protected] Pacific Rim Geological Consulting Salt+Lite Creative Fairbanks, AK 99708 Website: www.arcticcontrols.com Shaw Alaska ...... 12 An Alaskan owned and operated company since,1985, Contact: Thomas Bundtzen, president Taiga Ventures ...... 11 Phone: (907) 458-8951 • Fax: (907) 458-8511 Arctic Controls has been highly successful as manufac- Teck Cominco ...... 8 Email: [email protected] turer representatives for the state of Alaska in the Usibelli Coal Mine Geologic mapping, metallic minerals exploration and Process Control and Instrumentation field. U.S. Bearings & Drives industrial minerals analysis or assessment. Arctic Foundations Anchorage, AK 99518-1667 Panalpina Contact: Ed Yarmak Email: [email protected] • Web site: 4305 Old International Airport Rd., Suite A Phone: (907) 562-2741 • Fax: (907) 562-0153 www.egliair.com Anchorage, AK 99502 Email: [email protected] Serving Alaska since 1982, we perform a wide variety Contact: John Hodel, business unit manager Website: www.arcticfoundations.com of flight operations, including airplane and helicopter Phone: (907) 245-8008 Soil stabilization – frozen barrier and frozen core dams charter, aerial survey, and specialized operations such Fax: (907) 245-8018 to control hazardous waste and water movement. as external load work, powerline maintenance, aerial E-mail: [email protected] International and domestic freight forwarding and Foundations – maintain permafrost for durable high filming and videography. logistics services. Integrated solutions for supply chain capacity foundations. Foundex Pacific management. Specialists in oilfield and mining proj- Calista Corp. 2261 Cinnabar Loop ects. 301 Calista Court Anchorage, AK 99507 PTI Group Suite A Contact: Howard Grey, manager Edmonton, AB, Canada T6N 1C8 Anchorage, AK 99518 Phone: (907) 522-8263 • Fax: (907) 522-8262 Phone: (800) 314-2695 • Fax: (780) 463-1015 Phone: (907) 279-5516 E-mail: [email protected] • Website: Fax: (907) 272-5060 Email: [email protected] www.foundex.com Web site: www.calistacorp.com Website: www.ptigroup.com Other offices: PTI Group Inc. is the premium supplier of integrated Surrey, BC Canada CH2M HILL remote site services. Offering full turnkey packages or 949 E. 36th Ave., Ste. 500 Contact: Dave Ward individual services such as construction, catering and Anchorage, AK 99508 Phone: 604-594-8333 wastewater treatment, PTI delivers above and beyond Contact: Emily Cross Email: [email protected] client expectations. Phone: (907) 762-1510 • Fax: (907) 762-1001 Drilling services relating to exploration, geotechnical Email: [email protected] • Web site: investigations and wells. Shaw Alaska www.ch2m.com 2000 W. International Airport Rd, C-1 GPS Environmental CH2M HILL is a multi-national corporation that pro- Anchorage, AK 99502 Industrial Water/Wastewater & Mining Equipment vides services, project management, engineering, pro- Contact: Jane Whitsett, office director 3340 Arctic Blvd., Suite 102 curement, construction, operations and maintenance – E-mail: [email protected] to the energy, resource and process industries and the Anchorage, AK 99503 Phone: 907-243-6300 public sector. Contact: Paul Schuitt Fax: 907-243-6301 Phone: (907) 245-6606 • Cell: (907) 227-6605 Website: www.shawgrp.com Construction Machinery Fax: (928) 222-9204 Shaw Alaska is a subsidiary of The Shaw Group, one of 5400 Homer Dr. Email: [email protected] the World’s largest providers of engineering, design, Anchorage, AK 99518 Website: www.pgsenvironmental.com construction, environmental, infrastructure, fabrication Contact: Ron Allen, Sales Manager GPS Environmental, LLC is a manufacturers representa- and manufacturing services. Phone: (907) 563-3822 • Fax: (907) 563-1381 tive company representing companies that manufac- Email: [email protected] • Web site: www.cmiak.com turer water treatment, wastewater treatment, mining Taiga Ventures Other Offices: equipment and modular camps. 2700 S. Cushman Fairbanks office Fairbanks, AK 99701 Phone: 907-455-9600 • Fax: 907-455-9700 Jackovich Industrial & Construction Supply Mike Tolbert - president Juneau office Fairbanks, AK 99707 Phone: 907-452-6631 Phone: 907-780-4030 • Fax: 907-780-4800 Contact: Buz Jackovich Fax: 907-451-8632 Ketchican office Phone: (907) 456-4414 • Fax: (907) 452-4846 Other offices: Phone: 907-247-2228 • Fax: 907-247-2228 Anchorage office Airport Business Park Wasilla Office Phone: (907) 277-1406 • Fax: (907) 258-1700 2000 W. International Airport Rd, #D-2 Phone: 907-376-7991 • Fax: 907-376-7971 24- hour emergency service. With 30 years of experi- Anchorage, AK 99502 ence, we’re experts on arctic conditions and extreme Phone: 907-245-3123 Dowland-Bach Corp. weather. Email: [email protected] 6130 Tuttle Pl. Web site: www.taigaventures.com P.O. Box 230126 Judy Patrick Photography Remote site logistics firm specializing in turnkey Anchorage, AK 99523 Anchorage, AK 99501 portable shelter camps – all seasons. Contact: Lynn Johnson, president Contact: Judy Patrick U.S. Bearings & Drives Phone: (907) 562-5818 • Fax: (907) 563-4721 Phone: (907) 258-4704 • Fax: (907) 258-4706 Anchorage, AK 99518 E-mail: [email protected] Email: [email protected] Contact: Dena Kelley, branch mgr. Website: www.dowlandbach.com Website: JudyPatrickPhotography.com Creative images for the resource development industry. Phone: (907) 563-3000 • Fax: (907) 563-1003 Egli Air Haul Email: [email protected] • Web site: www.bear- P.O. Box 169 Lynden ings.com King Salmon, AK 99613. Alaska Marine Lines • Alaska Railbelt Marine U.S. Bearings & Drives has been providing solutions to Contact: Sam Egli Alaska West Express • Lynden Air Cargo it customers for over 25 years. We offer quality compo- Phone: (907) 246-3554 • Fax: (907) 246-3654 Lynden Air Freight • Lynden International nents, name brands and highly trained personnel. PETROLEUM NEWS • WEEK OF DECEMBER 30, 2007 NORTH OF 60 MINING 15

● YUKON TERRITORY Minto targets increased production Area 2 mineral reserves at Sherwood Copper’s Minto Mine support a 45 percent increase in production; grid power by end of 2008

By SHANE LASLEY Commissioning of Phase 2 will Mining News continue until January. The focus of herwood Copper Corp. said Dec. 12 the commissioning will be to ensure that a pre-feasibility study shows the that the filtration of tailings and S Area 2 deposit at its Minto copper- copper concentrates can keep up gold mine in central Yukon has a with the increased production. The reserve that supports a 45 percent increase in mill throughput and a 43 percent increase crushing, grinding and flotation in total project copper and gold production capacity of the mill has been SHERWOOD COPPER CORP. COURTESY and an immediate increase in copper and expanded to accommodate a 3,500 gold output. The study called for an tpd Phase 3 expansion increase in mill processing to 3,500 metric recommended in a pre-feasibility tons per day from 2,400 tpd and higher study. metal production starting next year due to processing higher-grade ore. Sherwood has updated its mine plan as a Phase 2 mill expansion completed result of the increased production that began Sherwood completed Phase 2 mill late in 2007. The accelerated plan estimates expansion at Minto on Dec. 15, increasing the mining of Main pit to be completed in production from 1,563 metric tons per day 2010. to 2,400 tpd. Once Main pit is complete the company Sherwood President and CEO, Stephen will start on Area 2. Stripping of Area 2 will Quin said the expansion will increase pro- not start until mining of Main pit is com- duction at Minto to 50 million pounds of plete so that the waste material can be put copper per year. directly into Main pit. Stockpiled ore will Commissioning of Phase 2 will continue be processed during this time. until January. The focus of the commission- At 3,500 metric tons per day the compa- ing will be to ensure that the filtration of ny has enough ore in Main pit and Area 2 to tailings and copper concentrates can keep stay in production for an estimated nine up with the increased production. The years ending in 2015. crushing, grinding and flotation capacity of the mill has been expanded to accommo- New discoveries augment date a 3,500 tpd Phase 3 expansion recom- Area 2 reserve estimates mended in a pre-feasibility study. These new findings are the result of Brad Kopp, Sherwood’s corporate 18,134 meters (59,495 feet) of diamond development manager, told Mining News drilling completed in Area 2 in 2006. A that much work on the Phase 3 expansion resource estimate has been completed by has already been completed and the compa- Lions Gate Geological Consulting Inc. and ny anticipates finishing it in early 2009. SRK Consulting (Canada) Ltd. The measured reserves at Area 2 are 432 Grid power in 2008 million pounds copper, 231,000 ounces Yukon Energy, meanwhile, has received gold, and 2.462 million ounces silver, the all the permits and certificates needed to company said. Adding the indicated proceed with surveying, clearing and con- reserves brings the total resource estimate struction of Phase 1 of the Carmacks-to- up to 567 millions pounds copper, 297,600 Stewart transmission line. The access and ounces gold, and 3.185 million pounds sil- land use permits were issued by the Selkirk ver. and Little Salmon Carmacks First Nation in In 2007 Sherwood did 23,618 meters December. (77,487 feet) of drilling at Minto. With sig- Crews have begun survey and clearing nificant new copper-gold discoveries at brush for the new transmission line and Gap, Copper Keel South and Airstrip SW construction is scheduled to start in March. the company said the results of the 2007 Lines are expected to be connected to the drill program could further increase produc- Minto Mine by the end of 2008. Sherwood tion and/or mine life. Assay results are still said connecting to grid power will signifi- pending on 34 of the 102 holes drilled. cantly reduce operating costs at the mine. ● 16 NORTH OF 60 MINING PETROLEUM NEWS • WEEK OF DECEMBER 30, 2007