FAQ

1. Is there a large mining and exploration industry in Alaska?

A: Absolutely. The mining industry of Alaska supports approximately 13,500 direct and indirect jobs with a payroll of $620 million in 2011. In terms of exploration, over $300 million was spent on over 60 projects in 2011 and a total of $2.8 billion has been spent on exploration since 1981.

In 2011, $175 million was spent on mine construction on eight existing mines and development projects and the industry generated $3.8 billion in gross mineral production value from operating mines. In addition to larger mines, a total of 70,000 ounces of gold and platinum, were produced from the State's plus-200 placer mines.

(Source: Alaska Miners Association, January 2012)


2. What are the benefits of the mining industry to the communities and 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 2011, the mining industry in Alaska accounted for over $17 million in local government revenue through taxes. The industry also accounted for $148 million in state government revenues through rents, royalties, fees and taxes in 2011. This was an increase of 170% from the previous year.

Mining exports of $1.3 Billion accounts for 31% of Alaska's total exports (2010). After the Oil and Gas sector, mining is the second highest contributor to corporate income tax ($70.1 Million for 2011).

(Source: Alaska Miners Association, January 2012) 


3. Isn't Alaska really cold and snowy? Can you mine in those conditions?

A: While this depends on where in Alaska you are referring to, in general mines in Alaska are operated year-round. An example is the Fort Knox open-pit mine located 40 km northeast of Fairbanks which is in production year round and is an example of how the Livengood can operate. The Livengood project is also located in an area where annual precipitation totals approximately 10 inches.


 4. What are the political risks in mining in Alaska?

A: Alaska has a well-established mine permitting system which requires a full understanding of the impacts associated with major projects and a defined permitting path. Recent major mining projects like Fort Knox, Pogo, Rock Creek and Red Dog have utilized this system very effectively. Communities like 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. Major risks that could potentially stall mining projects in Alaska revolve around environmental issues such as the proximity to sensitive fish habitats or endangered wildlife as well as the support of the local communities.


5. What are the local communities nearby the Livengood Project site?

A: The largest community near the Livengood project is the City of Fairbanks where many residents are either employed or associated with the mining industry. The nearest community to the project site is Minto, located approximately 60 kilometers to the southwest, where several of the residents work in the natural resource sector. The company has strived to keep these and other communities in the region up to date on its project and its progress with a positive response being returned on all fronts to date.


6. What are the most important factors affecting the development of the Livengood project?

A: Livengood is a large but low-grade deposit and as such requires the ability to extract gold at a low per-tonne unit cost to be viable. The existing infrastructure at the Livengood project is a major positive factor that will reduce initial development costs and project timing. The project has been the site of near continuous placer mining for the last 90 years and mining has been a well-established land use in the area.

There is also limited surface water with no migratory fish or endangered wildlife and no communities to relocate that could generate significant negative impacts.

7. What is the tax rate for mining companies in Alaska?

A: The Alaska State corporate tax rate varies from 0-9% and 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% in Alaska). The State of Alaska also allows $20M of exploration expenditure to be recovered against State taxes.

8. Who owns the land on which the Livengood project is located?

A: The Livengood project is a mixture of staked 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 vary from 0-5% and average about 2.5% for the currently defined deposit.

9. When will you go into production at Livengood?

A: The Livengood project is currently in the Feasibility phase of study which is scheduled to be completed in the first half of 2013.  Following the results of this study, the project concept will be developed in consultation with key stakeholders and the permitting process will commence.  Following the guidelines of the Alaska mine permitting regulations, the Company anticipates that an Environmental Impact Assessment would be required, a process that takes approximately three years to complete.  If permits are successfully obtained, the project would subsequently enter a 2-year construction phase with production start-up to follow.  This translates to a production start year of 2018 or early 2019.

10. How many jobs will be created and sustained from this project?

A: The Livengood project is currently envisioned to be a high-volume mining operation similar to the Fort Knox mine operating about 100 kilometers to the southeast, which employees approximately 450 people.  The Livengood project is expected to generate approximately 1,000 direct jobs during the construction phase and over 400 direct operational jobs for life of mine, currently expected to last approximately 23 years.

11. As the Livengood project is a lower grade deposit, what would be the impact of lower gold prices on the project?

A: The Livengood deposit has the characteristics and configuration to allow for high-volume mining and processing, making it possible to develop and operate the deposit at lower gold prices. An updated Preliminary Economic Analysis completed in August of 2011 utilized a gold price of $1,100 per ounce for the pit design. This analysis has considerable margin between these values and the current gold price.

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.


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.

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