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Business/Economy

Partnership mines old gold while reclaiming the Fortymile River for fish

The abandoned works of a gold mining operation are seen along the Fortymile River in eastern Alaska. A nonprofit is working with placer miners in the area to reclaim gold for companies such as Apple and Tiffany from old tailings as well as restore vegetation along the river banks. (Bob Wick/Bureau of Land Management)

Tailings from placer mining operations a century ago have left some streams in Interior Alaska less than ideal for fish. Miners caused the damage, and now miners are trying to fix it.

And in the process, they get some gold out of it.

Up on Jack Wade Creek, a tributary of the Fortymile River east of Fairbanks, the Salmon Gold project is entering its second year of operation. Existing placer miners in the area are working with RESOLVE, a Washington, D.C.-based nonprofit, to re-mine old sites on the river and then reclaim the bank with vegetation, restabilization and restored river structure.

The goal is to make the rivers more habitable for fish — not just salmon — and to pull out some of the remaining gold in the process.

The project just delivered its first batch of gold to refiners, on its way to companies like Apple and Tiffany & Co. So far, it’s only produced about 1,000 ounces among three sites, but RESOLVE and the miners hope to scale it up into a self-sustaining operation in the future, said President Stephen D’Esposito.

The project dates back to when he spent time in Canada and saw some of the damage in creeks that had hosted placer mining in the past.

“It was the first time I had seen placer and the historical impacts of placer mining — sediment in streams, that kind of thing,” he said. “And about four years ago, when I was doing some work in Alaska, talking to mining industry people, conservation groups, I hadn’t really known that there was a historical impact of placer mining (in Alaska). My thought was if you could pull the gold back out of the tailings and work hard at reclamation, that could be a really interesting combination.”

RESOLVE is a nonprofit, and operating mining equipment is expensive. D’Esposito said he quickly realized buying equipment and running its own mining operation wouldn’t be economically feasible, so instead began to look around for partners.

The U.S. Bureau of Land Management was already working with placer miners on federal lands on how to allow mining operations while mitigating damage and restoring fish habitat. Dean Race on Jack Wade Creek, Peter Wright on Sulphur Creek in the Yukon Territory and Tod Bauer on Gold Creek near Talkeetna are partnering with the project so far.

Through the BLM, D’Esposito said the organization was able to find three miners to work with on Jack Wade Creek, Sulphur Creek and Gold Creek. Operations began in 2018, and though they weren’t expecting to recover any gold that year, they were able to extract about 50 ounces from the Fortymile River drainage. By comparison, the Fort Knox Gold Mine near Fairbanks produced 255,569 gold-equivalent ounces in 2018, according to the Alaska Department of Natural Resources.

The production volume was never going to be extremely high, D’Esposito said — the main goal is to find ways to reclaim stream habitat for fish, and the gold can help provide marketable support for that.

“In stage one right now, it’s commercial in certain aspects, but it’s mostly philanthropic,” he said. “In the second stage we get to, as we scale up, RESOLVE will keep raising money to figure out how it can work, and we need to find long-term funding sources.”

Tiffany & Co. and Apple also help supply some of the funding at this stage, D’Esposito said. As they go forward, the companies hope to scale up to other streams and other miners, allowing the project to become self-sustaining. But at the same time, the companies and miners recognize that the process and model is still experimental, he said.

It may also be a step forward on another front: compensatory mitigation. Under the Clean Water Act, all mining companies have to perform offsetting mitigation measures to compensate for the loss of or adverse effects on aquatic resources or habitat. In the past, mining companies have taken such actions as buying land and setting a conservation easement on it, which will prevent it from being developed.

But in a case like Salmon Gold, the re-mining of old placer mining sites and the stream reclamation along the way may be able to be counted as a sort of bank for compensatory mitigation purposes, said Steve Cohn, the former state deputy director for resources for the BLM in Alaska.

Under the Clean Water Act, some operators act as “mitigation banks.” Essentially, a party can purchase a damaged site and restore it, and work with the U.S. Environmental Protection Agency to then sell compensatory mitigation credits in connection with that restoration. How many credits the work is worth is up to an interagency review team, but developers who need to account for compensatory mitigation for a project may buy those credits to offset adverse impacts.

“(Miners) are required to reclaim, but there’s a difference between reclaiming a site … and restoring it,” he said. “There’s a delta in there, and that delta could be turned into a profit. It hasn’t really materialized yet, but it’s one of the ideas that’s hopefully still being explored.”

Cohn said there has been a history of tension between miners and the BLM over standards for reclamation, particularly in areas of the Fortymile River, which has more than a century of mining history but was also designed a Wild and Scenic River by Congress in 1980 in a number of places.

Wild and Scenic River designations limit some development activities. In an effort to work with the miners and to restore some of the fish habitat, the BLM began convening meetings with stakeholders through the Resource Advisory Council.

“I feel like the miners are very well-intentioned people and they’re willing to try different things if it makes sense to them and it fits within their business model,” Cohn said. “(The Wild and Scenic designation was) almost set up for conflict. It really set up the BLM and the miners to be in conflict in some ways. Both entities have tried hard to find some middle ground, and that resource advisory council really helped serve as a mediator.”

D’Esposito said as the project moves forward, RESOLVE will be working on bringing additional placer miners interested in reclamation work in, and how to coordinate the differences in sites as it expands to different creeks. The suppliers are interested, placer miners showed support as well.

“There’s an appetite, there’s a hunger out there for this kind of project, which is interesting,” he said. “I’ve really been quite impressed with the placer miners, how interested they are in this working. Even though I think people were skeptical that this would actually produce gold, they’re rooting for us.”

Elizabeth Earl can be reached at elizabethearl@gmail.com.

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