Huge gold discovery is made north of Fairbanks

International Tower Hill Mines Ltd. updated its reserves estimate on land about 70 miles north of Fairbanks.

The new estimate puts the size of the Livengood deposit at 5 million ounces of gold, but company president Jeffrey Pontius says that additional exploring could push the figure to 10 million ounces.

"We have found a really exceptional concentration of gold that Mother Nature put out there," he said. "That's a tremendous thing."

If the estimates turn out to be accurate, the gold deposit, on both state and federal land, would be larger than at least two operating Alaska mines, Pogo near Delta Junction and the Fort Knox mine near Fairbanks.

But it is dwarfed by several other exploration projects that are further along. The Donlin Creek prospect near Bethel contains nearly 30 million ounces of gold. The Pebble project, also in Southwest Alaska, contains an estimated 90 million ounces of gold. Those two prospects are in roadless areas and potentially much more difficult and costly to develop.

It will take additional exploration to learn how much of the gold at Livengood could be economically recovered and to determine the recovery method, company officials said.

Drilling will begin again in February, the company said. Economic estimates to determine how to mine the gold could be ready by July, Pontius said.

Pontius says the mine could be operating within five to six years.

Pontius also remains bullish on gold as a commodity.

"People are looking at that as a safe haven in these economic times," he said. "That's going to be a big demand in the future."

Jim Dodson, chief executive of the Fairbanks Economic Development Corp., said that having another mine that is akin to Fort Knox in scale is "terribly exciting."

Mining industry jobs are among the highest paying statewide, he said.

Dodson said the city should reap some benefits as a supply and transportation center for the mine near Livengood because it's on the road system.

The Dalton Highway bisects part of the discovery.

Based in Vancouver, British Columbia, International Tower Hill specializes in gold exploration projects in Alaska and Nevada. It is owned by the Cardero Group, another exploration company based in Vancouver.

In 2006, International Tower Hill bought the Livengold deposit and several other Alaska mineral prospects from AngloGold Ashanti -- a South Africa mining company, for nearly $11.5 million. AngloGold is partially owned by Anglo American, the company developing Pebble.

"We're exploration guys; we're not really mining guys," Pontius said. "Our real goal here is to define a compelling project for somebody to partner with us to develop the project."

The Anchorage Daily News contributed to this article.