The Red Dog Mine in Alaska has, for years now, remained underutilized as its Canadian operator awaited a federal permit to access new ore deposits. Earlier this week, the United States Army Corp of Engineers approved the permit for this mine, authorizing its operator to construct infrastructure like roads to reach new zinc prospects.
An agency spokesperson, John Budnik, revealed that Teck Resources Limited first filed a permit application in 2018, before withdrawing it in 2019 as it was missing required data linked to historic preservation. In 2022, the operator submitted the application again.
The operator manages the mine via a landmark agreement with the Northwest Alaska Native Association Regional Corporation, which owns the land the mine sits on.
The permit is a big step toward extending the mine’s life, which is expected to close in 2031, unless these new deposits demonstrate enough profitability to exploit. Teck Resources believes that acquiring the Clean Water Act permit will allow them to accelerate the progress of construction.
The permit covers the disruption of almost twenty acres of wetlands and the construction of infrastructure like culverts and bridges to support the operator’s exploration work. Josie Wilson, the corporation’s spokesperson, termed the permit as a crucial milestone.
The Red Dog mine is a main source of employment and accounts for over 80% of the revenue generated from the Northwest Arctic Borough. This zinc mine has also generated billions of dollars for companies owned by Alaskan natives since its launch over three decades ago. Without new development though, its closure is imminent given that the mine is running low on ore.
With the new permit, Teck plans to build about 12 miles of roads required to access the Anarraaq and Aktigiruq zinc deposits, which could help maintain mining operations for a longer period. Teck also revealed that they had adequate cash on hand to advance the permitted works, noting that construction on the main access road was expected to start in the next 2 weeks.
Before the permit was issued, Teck used helicopters to fly in small rigs to drill test holes at the Anarraq and Aktigiruq deposits. The operator now plans to do more significant exploration, which will include exploring the area via an underground portal.
It expects that it will require roughly 6 years of exploratory drilling to establish whether the deposits can be economically mined. Given that the prospects are on state land though, it is likely that the corporation and the local government will derive less revenue from the deposits if the project advances.
Other companies like Arizona Metals Corp. (TSX: AMC) (OTCQX: AZMCF) are also engaged in exploring for economically-viable deposits of zinc in other locations within North America. If these efforts reach fruition, the region could become a major production hub for this mineral.
NOTE TO INVESTORS: The latest news and updates relating to Arizona Metals Corp. (TSX: AMC) (OTCQX: AZMCF) are available in the company’s newsroom at https://ibn.fm/AZMCF
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