A state agency is proposing to open up nearly 100,000 acres of land about 30 miles northwest of Haines to mineral exploration, development and production.
The Mental Health Trust Land Office is proposing to lease 95,700 acres of trust land to the highest bidder. The land, almost entirely on the south side of the highway, surrounds Constantine Metal Resources’ Palmer Project.
According to the decision issued in early January by the trust’s land office, which outlines why leasing the land for mineral exploration would be in the best interest of the trust and its beneficiaries, the area has the potential to produce placer gold and other valuable metals and minerals.
Mike Franger, the trust’s senior resource manager, said in an interview Tuesday he hopes Constantine Metal Resources submits a bid on the land.
“We hope they are interested. We hope others are interested, as well. That prospect has been there for a long time, and the thinking is that the area in general is prospective for mineral development and now is as good a time as any to make our property available,” Franger said.
In early November, Constantine released positive results from its most recent mineral exploration, including zinc, copper, lead, gold and silver.
Franger said the trust has been in conversations with Constantine prior to the proposal for the competitive lease offering. “We’ve been talking to them for a long time just because they are in proximity to our property, and they are aware that we are making this (land) available,” he said.
Constantine vice-president Darwin Green said this week there wasn’t a lot he could say.
“We were contacted by the trust and advised they were considering a competitive lease offer. This is the first we’ve seen of the best-interest determination,” Green said.
According to Franger, any lessee of the land would be required to comply with local, state and federal environmental protection laws. The determination also states, “There are no anadromous fish streams catalogued on the lease block.”
The decision also acknowledges that, “historically, significant concern has been expressed about the impact of the leasing activities on public resources, such as fish and wildlife resources.”
In addition to requiring full compliance with environmental laws, the lease “may contain some operating stipulations that exceed the requirements of those laws and regulations,” the document says.
Annual rental of the land begins at $25,000 per year for the first lease term (three years) and $40,000 per year in the second term. There is also a royalty clause for any production that might occur, and the lessee would be required to spend at least $75,000 a year on exploration of the property.
Public comment on the offering will be accepted until Feb. 10. Comments can consist of any concerns, though the trust will be looking specifically for reasons why the lease wouldn’t be in the best interest of the trust, Franger said.
“(The comments) could be anything, but if you read the decision the comments are supposed to pertain to whether or not the action is in the best interest of the trust,” Franger said.
Once comments are taken into account, the trust will open an application period for those interested in leasing the land. “We will hopefully have more than one applicant and we will determine who the successful applicant will be and we will start working into a lease,” Franger said.
The state transferred nearly one million acres of land to the Mental Health Trust Authority in 1994. Revenue collected from use of the land goes toward funding Alaska’s mental health programs.
Written comments on the lease offering must be provided at or before 4:30 p.m., Feb. 10. Comments should be submitted to the Trust Land Office at 2600 Cordova Street, Suite 100, Anchorage, AK 99503, or by fax 907-269-8905 or email [email protected].
To view a map of the proposed lease area and read the best interest decision, go to www.mhtrustland.org and click on “Best Interest Decision and Public Notice for Haines Block Mineral Lease Offering.”