Anchorage Daily News

BETHEL -- For the past three years, a team of geologists has drilled holes into a network of gold-bearing veins near the South Fork of the Kuskokwim River.

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Each hole is a test: The rock core sample pulled from the earth contains a sort of mineral code. Mineralogists read this like text on a page. From what they learn, they sketch maps of the mineral underground over the course of years.

By industry standards, Terra, as it's known, is still a small exploration project. It operates with just a pair of the diesel-powered drilling rigs at a remote camp northeast of Lime Village. A dozen people run the entire camp.

Even so, International Tower Hill Mines Ltd. spent $2.3 million exploring these mining claims in 2007. The company's president says the spending paid off.

"We've intersected some high-grade gold over some narrow widths," president Jeff Pontius said. "That's what we're looking for. We're encouraged and we're going to continue exploration out on the project."

SOARING PRICES

The Terra is not alone in Southwest Alaska, where most of the state's mineral exploration dollars are spent. The reason is in the geology -- and the climbing metals prices spurred by surging Asian markets.

At about $800 an ounce, gold has risen to a new all-time high.

In 1999, platinum fetched less than $400 an ounce. Recently, prices topped $1,400. Prices for other minerals found in the region -- molybdenum, copper and silver -- are up, too.

"That will help us in the long run," said geologist Dave Szumigala of the state's Division of Geological and Geophysical Surveys, who noted strong minerals markets typically favor one more than others.

The most well-funded exploration projects -- Pebble and Donlin Creek -- are household names in Alaska. But the region bustles with younger projects, too. Some say they foreshadow the big buildup of Southwest Alaska.

"They're not just kicking rocks around in the hills. They're developing future plans of developing the mines depending on what they find," said Mike Williams of Akiak, a critic of mining in the Delta.

In Southwest Alaska, four exploration projects each spent more than $1 million in 2006, the most recent year for which statistics are available, according to the state's geological survey. Another 10 smaller projects also are under way.

"Exploration is just going off the charts right now. We know mining is a cyclical business, but people don't see any end in the demand," Szumigala said.

In three years, the Terra exploration project drilled about 8,000 meters of core samples in a block of mining claims stretching across more than 28,000 acres in a remote region of the Alaska Range.

Exploration at the Terra site began with Anglo American Ashanti in 2005. A year later, International Tower Hill Mines Ltd. took over the project.

It drilled about 22 holes in 2007. This marks an escalated pace, as it drilled just 16 sample holes in the previous two years.

It's emblematic of the pace of mineral exploration in the rest of Alaska and the world. If it's not a rush worldwide, it's close.

THE SMALLER SITES

In Southwest, the Pebble and Donlin Creek exploration projects comprise the most ambitious and well-funded campaigns.

But the story of what's to come in Southwest might lie not only with the sites such as Pebble and Donlin Creek, but in the dozen or so of their smaller cousins.

• Shotgun. In 2006, TNR Gold Corp. completed 11 holes with two drill rigs.

• Goodnews Bay Platinum Project. In a project with Calista Corp., Pacific North West Capital Corp. and Stillwater Mining Co. are exploring in an 82-square-mile area of interest. The region has a long history of mining -- earlier placer operations in the Salmon River, which drains the exploration area, produced about 650,000 troy ounces of platinum.

• Big Chunk. Liberty Star Uranium and Metals Corp. owns 707 mining claims in an area covering 177 square miles of copper. The lode is located northwest of Iliamna and contains molybdenum, lead, silver and zinc.

• Bonanza Hills. Liberty Star Uranium and Metals Corp. owns about 13.5 square miles in state mineral leases in a region 60 miles northeast of Iliamna. The gold and silver project lies about 40 miles northeast of the company's Big Chunk project.

• Nyac district. Gold exploration by Tonogold Resources Inc. is under way on 57,600 acres of the Nyac district leased from Calista Corp. In August, the company reported collecting more than 7,400 soil samples. These samples contained as much as 4.2 grams of gold per ton. The company's exploration effort has core drilled 11 holes. Placer mining in the district produced more than 600,000 ounces of gold. The region lies on the Tuluksak River 60 miles west of Bethel. Exploration drilling began at Nyac in 2005.

• Sleitat Mountain. In a saddle on Sleitat Mountain, Brett Resources Inc. explores a deposit of tin, tungsten and silver. The 3,520-acre mining claim is located 85 miles northeast of Dillingham.

• Kisa. After the first summer of exploration at Kisaralik Lake, Gold Crest Mines has started planning its 2008 campaign. The company completed a six-hole, 3,100-foot drilling campaign in 2007. The project drew criticism earlier last year after some Kuskokwim residents learned of it.

• GL. This Gold Crest Mines Inc. exploration project is near Nyac.

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