Mine firm will lease 100,000 acres


A state agency last week awarded Constantine Metal Resources lease rights to nearly 100,000 acres of land 30 miles northwest of Haines for mineral exploration, development and production.

The lease encompasses an area more than twice the size of the Alaska Chilkat Bald Eagle Preserve, located mostly between the Tsirku and upper Chilkat rivers.

The Mental Health Trust Land Office received only one application for the lease offered in February, said Mike Franger, the trust’s senior resource manager.

“The way the industry is right now, not a lot of companies are acquiring new properties. There’s kind of a downturn it seems like right now,” Franger said. “We were just glad to get an application.”

Franger said the trust and Constantine are working to finalize the lease before the company starts its exploratory work at the Palmer Project site near Haines this summer.

Annual rental of the land begins at $25,000 per year for the first lease term of three years and $40,000 per year in the second term. Constantine is required to spend at least $75,000 a year on exploration of the property, with that amount increasing by $50,000 each year.

There is also a royalty clause for any production that might occur.

The lease block, almost entirely on the south side of the highway, surrounds Constantine Metal Resources’ Palmer Project.

Vice president of exploration Darwin Green said a big reason for leasing the land surrounding the Palmer Project is to secure those lands in the event something valuable is discovered on the peripheral of the existing project. “It’s sort of to protect that interest by acquiring those grounds,” Green said.

Constantine president Garfield MacVeigh said the company doesn’t have a firm plan outlined for the lease block yet, though initial work could include basic prospecting and testing of silt and soil sediments to identify potential areas of interest.

Green referred to this superficial sort of work as “getting your nose on the rocks and getting your boots on the ground” to begin the process of locating potentially lucrative deposits.

Lynn Canal Conservation president Eric Holle said the organization submitted comments regarding the lease warning of the health consequences associated with development of the area for mining.

“Mining there would be directly upstream of Klukwan, and that mineral belt at Constantine is an acid-generating ore body, and that means any tailings would have to be monitored in perpetuity to prevent heavy metals and other toxins leaching into the water and thus the fish and thus the people including small children,” Holle said.

Constantine currently has a $6.2 million budget for this season’s exploration activities, Green said. The company will start in late May operating two drills and will increase to three by the end of the season in mid-September, he said.

“We’re mostly focused on expanding the current resource and doing a little bit of poking around in other areas,” Green said.

Green said the company will likely hire 10 to 15 residents for the four to five month season.

Revenue generated from the lease will go toward funding mental health programs in the state.


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