1. Is there a viable mining and exploration industry in Alaska?
A: Absolutely. There are 5 large mines in Alaska that operate year round and support approximately 14,300 direct and indirect jobs with a payroll of $650 million in 2012. Exploration expeditures were an estimated $275 million in 2012 and a total of $2.3 billion has been spent on exploration in Alaska since 1981.
In 2012, it was estimated that $270 million was spent on mine construction and other capital investments and the industry generated $3 billion in gross mineral production value from the operating mines. In addition to larger mines, a total of 85,000 ounces of gold, were produced from the State's plus-300 placer mines.
(Source: Alaska Miners Association, January 2013)
2. Can a major mine be permitted in Alaska?
A: Alaska has a well-established mine permitting system which requires a full understanding of the impacts associated with major projects and provides a well-defined permitting path. Major mining projects like Fort Knox, Pogo, and Red Dog have utilized this system very effectively. The communities of Fairbanks, Juneau and Nome were founded on mining activity and the industry is an important generator of jobs as well as local and state revenue from taxes. Risks that could potentially impact mining projects in general in Alaska revolve around environmental issues such as the proximity to sensitive fish habitats or endangered wildlife, as well as concerns over subsistence lifestyles. The Livengood Gold Project can successfully manage these risks.
3. What are the benefits of the mining industry to the communities and the State of Alaska?
A: The mining industry provides some of Alaska's highest paying jobs with an estimated average annual wage of $100,000, over twice the state average for all sectors of the economy. The types of jobs provided are mostly year-round jobs for residents of more than 120 communities throughout the state, half of which are found in rural Alaska where few other jobs are available.
In 2012, the mining industry in Alaska accounted for over $21million in local government revenue through taxes. The industry also accounted for $137 million in state government revenues through rents, royalties, fees and taxes in 2012 as well as $126 million in payments to Alaska Native Corporations.
Mining exports of $2 Billion accounts for 38% of Alaska's total exports (2011).
(Source: Alaska Miners Association, January 2013)
4. Isn't Alaska really cold and snowy? Can you mine in those conditions?
A: There are 5 large mines in Alaska that operate year round. An example is the Fort Knox open-pit mine, located 45 miles southeast of Livengood and 25 miles north of Fairbanks. Fort Knox has produced more than 6 million ounces of gold in a year round operation since 1996 and is an example of how the Livengood Gold Project can operate in the arctic. The Livengood Gold Project is located in a sub-arid region where annual precipitation totals approximately 16 inches, of which about one half occurs as snowfall.
5. What are the communities closest to the Livengood Gold Project?
A: The Fairbanks area, with approximately 100,000 residents and where many residents are either employed or associated with the mining industry, is 70 miles south of the Livengood project . Minto, with approximately 225 residents, is the nearest community and is located approximately 40 miles to the southwest. The Company values its relationship with these communities and has strived to keep the region up to date on its project and progress.
6. What are the most important factors affecting the development of the Livengood Gold Project?
A: The Livengood Gold Project is a well-defined, large, low-grade deposit in a stable jurisdiction that is highly leveraged to the price of gold, with access by a year round paved highway and only 50 miles from the power grid. The project is in a historic mining district where the State of Alaska has designated mining as the primary surface use. Based upon the 5 years of environmental baseline data collected, all of the potential environmental issues at the Livengood Gold Project can be successfully managed.
7. What is the tax rate for mining companies in Alaska?
A: The Alaska State corporate tax rate is 9.4%. The State has a mining license tax rate on net profits of 7% following a 3.5 year tax holiday once production commences. Companies are also subject to normal US federal corporate tax rates (35%). The State of Alaska allows $20M of exploration expenditures to be carried forward and recovered against future State taxes due.
8. Who owns the land on which the Livengood Gold Project is located?
A: The Livengood Gold Project contains State of Alaska mining claims, leased patented and unpatented State and federal mining claims and a large block of ground leased from the Alaska Mental Health Trust. The company pays annual rental and lease option fees and royalties on the land which range up to 5% and which the feasibility study estimated average 3%.
9. When will you go into production at Livengood?
A: Contingent upon finding a strategic alliance partner and assuming a rebound in the gold price supports a future production decision, production is possible by 2020.
10. How many jobs will be created and sustained from this project?
A: The Livengood Gold Project is currently envisioned to be a high-volume mining operation similar to the Fort Knox mine operating about 45 miles to the southeast, which employees approximately 450 people. Based on the NI 43-101, the Livengood Gold Project is expected to generate approximately 1,020 direct jobs during the construction phase and 425 direct operational jobs for life of mine, approximately 14 years..
11. As the Livengood project is a lower grade deposit, what would be the impact of lower gold prices on the project?
A: As demonstrated in the Sensitivity Analysis in the NI 43-101, the Livengood project is highly leveraged to gold price. At current gold prices, the project is not economic but as gold price increases the economics improve.
12. I am a new investor and do not understand much mining terminology. Where can I find out more information on the industry lingo?
A: For more information on mining terminology, please see the definitions page.