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True North Mine

Decisions On Court Ordered Remand
And Application To Expand The Mine

DNR announces two decisions that enable Fairbanks Gold Mining Inc. to expand its mining operations at its True North Gold Mine. The first decision is DNR's court-ordered review of the economic impact of last year's decision on nearby businesses at Cleary Summit. The second decision authorizes FGMI to mine additional ore reserves at True North. (Go directly to Decision Documents)

The Remand Decision.

The department found that the majority of aurora-viewing visitation to Cleary Summit occurs to a location on the north side of the ridge that receives limited impacts because it is mostly shielded from impacts of the mine's haul road. The three businesses on the south side of the ridge may be affected by the traffic on the haul road. They have experienced a significant loss in visitors this year. However, the majority of the decrease is almost certainly due to the events of September 11th. In addition, much of the decrease that is due to the effects of the haul road can be accommodated elsewhere in the region and is not a loss to the State.

Economic Impacts of the Mine. The department found that the True North Gold Mine would have the following impacts over its four-year life.

• Direct Fiscal Impacts to the State. The mine will directly pay the state, Fairbanks North Star Borough and the Mental Health Trust approximately $4.4 million.
• Direct Job, Income, and Purchase Impacts:
  • 120 new direct jobs over the project's life with an average wage of $48,270 per year.
  • $6.5 million in direct annual payroll.
  • $9.5 million in other direct annual purchase impacts.
• Indirect and Other Impacts: The department found the mine would produce large indirect impacts that are detailed in the decision and that it could be very important in protecting the viability and extending the life of the Fort Knox Gold Mine.

Economic Impacts of the Businesses. The department found that the True North Gold Mine could cause losses to the Cleary Summit businesses.

• Direct Fiscal Impact to the State. Over the four-year mine life, the Fairbanks North Star Borough would receive a few thousand dollars less in bed tax.
• Direct Job, Income and Purchase Impacts. There would be no significant overall impact. The loss to the Cleary Summit businesses is not large enough to have an appreciable, region-wide effect on jobs. At a regional level, the loss in income to the owners of the overnight Cleary Summit businesses is offset to some extent by an increase in income to other businesses that gain the "lost" tourists.
• Indirect Impacts. The department did not find a significant indirect impact from losses to the businesses.

Based on these conclusions, the Department reaffirmed the decision to approve the mine and haul road that it made in December 2000.

Expansion Decision.

The proposed expansion would allow FGMI to mine additional reserves identified during its 2001 exploration activities, and would extend the mine life by about one year. The ore would continue to be processed at the Fort Knox mill, and the rate of haulage would remain the same. The proposed amendment would increase total upland disturbance by 393 acres and wetland disturbance by 193 acres.

The primary effect of this mine expansion will be to increase the amount of disturbance within the True North Project area. The mining activities resulting from this expansion are consistent with the state's land management policies for this area, and the Department has determined that the applicants reclamation plan is adequate to return the land to a productive post-mining land use.

State agency staff have carefully evaluated the potential for acid mine drainage and impacts from metals leaching from the waste rock piles and the mine pits at the True North site. That potential was determined to be low. The Department's approval of this expansion is subject to additional protections which will add additional factors of safety to protect the state.

Cultural resource protection was another issue that was evaluated by the Department. Although portions of the historic Davidson Ditch will be impacted by the True North Project expansion, the applicant has proposed mitigation for these impacts that is acceptable to the State Historic Preservation Office.

The Department also evaluated the additional impacts on the nearby residential areas and the local businesses in making its decision. DNR has determined that the mine expansion authorized by this decision will not have any significant changes to the day-to-day ore hauling activities. A significant change resulting from this authorization would be the prolonged mine life, and the resulting prolonged hauling activities on the haul road by 1 to 1.5 years. The Department has determined that the impacts to the residences and the local businesses were adequately addressed in the original project authorization and the resulting mitigation measures.

For more information, please contact:
Tom Crafford
Department of Natural Resources
Division of Mining, Land and Water
550 West 7th Avenue, Suite 900D
Anchorage, AK 99501-3577
Phone: 907-269-8629
Fax: 907-269-8930
e-mail: tom_crafford@dnr.state.ak.us

Jim Vohden
Department of Natural Resources
Division of Mining, Land and Water
3700 Airport Way
Fairbanks, AK 99709-4699
Phone: 907-451-2772
Fax: 907-451-2703
e-mail: jimv@dnr.state.ak.us

DOCUMENTS AVAILABLE FOR DOWNLOADING:

• True North Mine Project Decision on Remand (June 12, 2002)
  • Appendix A: Supporting Economic Information
  • Appendix B: Economic Assessment of True North Haul Road on Winter Tourism in Alaska
  • Appendix C: Comments Received as a result of DNR's Request for Information on Economic Impacts
• Decision Overview and Preface for the True North Project Expansion (June 12, 2002)
• Application to Amend the True North Plan of Operations (December 2001)

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