State and mine promoters pitch Ester Dome as a great prospect for open pit mining

Ester Dome is a case in point of conflicting resource values.

To gold miners, mining speculators, the Dunleavy administration and the Alaska Mental Health Trust Authority, it is a 2,300-foot promontory with untold wealth locked up in the rocks below that should be excavated and cut down to size.

The targets are “fault/vein/shear hosted gold deposits in metamorphic rocks with hydrothermal systems being sourced from granitic intrusions. Similar deposit styles existing within the Fairbanks Mining District include the True North mine operated previously and reclaimed by Kinross,” the mining promoters say.

From 2001 to 2004, Kinross removed 11.7 million tons of ore from True North and trucked the material nine miles to its mill. An Ester Dome project would probably involve hauling millions of tons of rock to Fort Knox on Goldstream Road and the Steese Highway, but no one will say that out loud.

There are 60 state mining claims, 94 claims under “exploration agreements,” and land controlled by the mental health trust.

The six-member trust authority board, which says its assumption is that mining is the “highest and best use” of Ester Dome property, includes former Fairbanks Mayor Rhonda Boyles.

To many people who live in the Fairbanks area and aren’t mining speculators, Ester Dome is far more valuable now than it could ever be as an open pit mine. Not in strictly monetary terms, mind you, but when considered in a broader perspective that includes quality of life and the conditions that make a community livable.

Plus, even if this was just a simple financial transaction, Alaska mining taxes and royalties are so low that the public doesn’t stand to get a fair share of the wealth under the dome.

The Ester Community Association summarized the arguments for keeping the dome as it is in this letter to the mental health trust.

The state and the mental health trust have tried to keep the Ester Dome plan quiet, probably to avoid generating opposition. This strategy will backfire.

Legal ads published by the trust in the Fairbanks Daily News-Miner drew no public attention and no news coverage. I wrote about the hush-hush plan here July 13 and the failure of the mental health trust to involve the community in its plans.

On March 28, the Fairbanks Daily News-Miner published an account that dealt with the state mining claims assembled by the mining promotion company, but did not explain the potential for open pit mining in residential areas or the additional claims to be leased from the mental health trust.

The Dunleavy administration and the mining promoter take the position that Fairbanks was founded on gold mining and Ester Dome is an ideal target for an open pit mine.

The state is working with the mining speculators to promote the project without mentioning open pit mining or how many truckloads per hour would be running from Ester Dome to Cleary Summit if this all pays off.

I put no trust in the empty claims by the state and mining industry that there was no need for more public notice and comment because that will happen in the future when the plans are solidified.

The company that is pushing for mineral exploration and development on Ester Dome is Millrock Resources, a Canadian company that calls itself a “project generator.”

The goal of Millrock is not to mine Ester Dome, but to put together a package that it can sell to a major mining company. The company stock has been trading at about 7 cents a share, near a 52-week low.

“We’re early stage, exploration geologists. Our corporate goal is to make a discovery of a giant metallic ore body that we could then sell to a major mining company to the great benefit of Millrock shareholders,” Millrock President Greg Beischer said in this 2020 interview from his office in Anchorage.

“We acquire the mineral rights. We spend a little bit of our own treasury developing the project idea, proving the potential, but then we always bring in partner companies. Often they’re major metal mining companies, sometimes other junior explorers, but they fund the work, earning their way into a portion of our projects,” he said.

The goal of this and other exploration projects is to find a big discovery that would “drive Millrock share price way up.”

In another interview last year, he said Millrock lines up partners “before the work gets expensive,” to allow it to pursue a variety of projects and increase the odds of success.

As payment, Millrock takes an ownership share in the “junior companies” that become partners.

He said there has been a “surge in interest,” especially from Australia.

“There’s a real spotlight shining on our state now from Australia that’s viewed as a very favorable jurisdiction and truly it should be. There’s an untold mineral wealth that isn’t being explored strongly at all,” he said.

The Ester Dome project is now being managed by Felix Gold Ltd., an Australian company brought in as a partner by Millrock. In time, Millrock plans to be a major owner of Felix Gold, once it becomes publicly traded, and it will collect mining royalties on all of the claims.

“We started as true contrarians four or five years ago, starting to build a land position in a longstanding mining camp. It was possible only because it was such a bad downturn that we were living through, but we managed to make relatively low cost agreements with some existing claim owners,” Beischer said in a July 14 interview.

“Last year, when things started to pick up, we made a deal with a company that's called themselves, Felix Gold, as a nod to Felix Pedro, who initially discovered gold in Fairbanks, well over a hundred years ago now. We've made a great partnership with them and they've raised a lot of money privately that we're collaboratively putting into the ground with them right now, got a very aggressive soil sampling programs underway. We built out the land position to staking claims on open ground after doing a pretty extensive data compilation work across the whole district.”

He said Felix Gold has a team in Australia compiling all of the historic claim information about Ester Dome in a database and a 3D model that includes drill hole information.

“That's all gone well. I'm going to stop short of telling you what they've come up with, I'm going to wait until that's been announced,” he said July 14.

He said the resource estimate will be solid and “it’s a little bit bigger” than expected.

“It's a good high-grade vein deposit with a decent chance for expanding well beyond the known resource, but that's all going to come out here real soon in terms of hard numbers.”

For people who live in Fairbanks, this is not just a matter of hard numbers, though I can see why it would be to someone who lives in Australia or Anchorage.

Comments on the mental health trust portion of this project are due July 30 at mhtlo@alaska.gov.

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