Historic Hatcher Pass mine could become ground zero for new Willow gold rush

WILLOW — Residents in this Mat-Su community are greeting plans to restart the historic Lucky Shot Mine high in Hatcher Pass with celebration, caution and skepticism.

Perched above Craigie Creek along Willow-Fishhook Road in the Talkeetna Mountains, about 75 miles north of Anchorage, Lucky Shot last operated at full speed at the start of World War II. Activity at the mine has resumed on and off several times since.

Now, Alaska Gold Torrent LLC hopes to reopen the gold mine by late 2018, this time for the long term.

Plans show 10 trucks a day carrying 200 tons of ore 25 miles from the mine to a mill site along the Parks Highway designed to separate gold from quartz without the use of toxic chemicals like cyanide.

Gold Torrent officials say they hope to hire 85 people at the mill and mine — including some experienced miners they're bringing in — plus 10 managers for at least four to six years.

Historic records from the Lucky Shot and neighboring War Baby mines indicate the gold "has a high-grade nature to it," Alaska Gold Torrent CEO Daniel Kunz said. "We're keying off of that."

Alaska Gold Torrent's joint-venture partners are Boise-based Gold Torrent Inc. — 70 percent owner — and the Miranda Gold Corp., a Canadian firm.

Gold Torrent has scheduled a public meeting for 7 p.m. Thursday at the Willow Community Center. The company held a community meeting in February.

'First the fire…'

Some in Willow, an unincorporated community of about 2,000 once floated as the state capitol but now known as Alaska's unofficial dog mushing capital, say they aren't opposed to a mine "done right," as one resident put it.

But first they want more details from Gold Torrent, given questions about truck traffic on the steep road into Hatcher Pass, noise and dust, and potential threats to groundwater.

The mill would be next to a few homes along a 65-mph section of the Parks Highway just before a northbound passing lane.

Sue Morgan, a geologist who lives north of the mill site, wants Gold Torrent to add a turn lane to avoid potentially dangerous traffic patterns.

"Unfortunately they put it right in a residential area," Morgan said. "I always find that offensive — mixing residential with business. But we have no zoning in the borough, so what can you do?"

Helena Mark and her husband, Lincoln, rebuilt their home — destroyed by the 2015 Sockeye wildfire — within shouting distance of the 30-acre property where Gold Torrent is now clearing charred spruce for the mill.

"First the fire, now the gold mine," Helena Mark said.

She said she's not opposed to the mine — her father was a gold miner — but wants assurances that dust from the truck traffic won't aggravate her asthma and the processing plant's water needs won't disrupt her well.

Asked how Gold Torrent will protect groundwater resources, CEO Kunz said, "There's nothing to protect it from."

Gold Torrent plans to dispose of clay and sand in lined ponds and trap sulfides and other minerals in a glassy block of slag melted in the furnace and disposed onsite or at a landfill, according to company plans.

Others in Willow say they're all for a clean resource industry that brings jobs to a community that currently has few prospects.

"It looks to me like it would be a net positive," said Harry Banks, chair of Willow Area Community Organization.

Along with jobs, Gold Torrent says it will plow Hatcher Pass Road, leading to more winter access on the Willow side, Banks said. He praised the company for working with the community.

Kunz said this week's meeting will provide new information.

"What we want is to give the community the opportunity to drill down a bit more on the permit application," Kunz said, referring to a mining application filed with the state. "There's a lot more detail in there than what I was able to talk about before."

'Mining people's pockets'

There's always the chance that Gold Torrent will follow in the footsteps of companies that searched for the big strike at Lucky Shot — and didn't quite find it.

Lucky Shot produced gold from at least 1918 until 1943, when it shut down amid federal orders to halt all nonessential mining for wartime production.

Government-fixed gold prices held down interest for decades.

An oil company, Enserch Corp., tried production in the 1980s and even built a new mine entry before dissolving its interest.

Scott Eubanks, 57, owns the mine now. He signed an 80-year lease with Gold Torrent and will get a percentage of any profits.

He's not counting his chickens.

Eubanks' company, Alaska Hardrock Inc., bought and worked the property after Enserch until the price of gold tanked to $250 an ounce in the early 2000s.

Full Metal Minerals obtained full interest in Lucky Shot in 2005 and conducted annual drilling programs before abandoning work during the 2008 financial crisis. The mine returned to Eubanks.

Miranda Gold Corp. approached Eubanks in 2013, according to Kunz. The company then approached Gold Torrent to develop the mine.

The price of gold is above $1,250 an ounce now, but Gold Torrent spent three years on financing just to get to this point.

A project like this isn't cheap, Eubanks said.

"They're out there raising stock dollars and mining people's pockets to fund this project," he said. "We'll see what happens. They need to continue to raise money."

Not Knox

Gold Torrent's plans to process ore from Lucky Shot are more like a glorified placer mine than a big hard-rock operation like Fort Knox in Interior Alaska.

Instead of using chemicals, the company plans to separate gold from quartz using a mechanical shaking process that takes a slurry of crushed ore and water and leaves behind a mix of water, clay and quartz sand. A furnace will melt gold particles into "dore," concentrated bars or ingots.

State regulators say the mill will require several permits.

A Department of Environmental Conservation solid waste permit comes with requirements for groundwater monitoring as well as testing the 60,000 metric tons of sand expected to be stored in ponds every year, according to Will Collingwood, a solid-waste engineer with the agency.

The mill will pull approximately 5 gallons of water a minute — roughly the flow of a garden hose — from an on-site well, plans say. A temporary supply of more water will be necessary at startup. The company plans to recycle water from the ponds back through the plant.

Gold Torrent will also need permission for temporary water use and for a temporary closure of a mine haul road, officials say. The company is voluntarily joining a statewide bonding pool available to smaller operations to reclaim mine sites if necessary.

Generally, the ore coming out of Lucky Shot is relatively "clean" and isn't expected to generate acid or leach metals, Collingwood said.

"I would say they're geologically fortunate from an environmental perspective," he said. "Hopefully from a gold grade perspective as well."