EXPLOSIVES! | ARCTIC OIL | MINING REGIONAL OVERVIEW November 2018
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CONTENTS NOVEMBER 2018 | VOLUME 34 | NUMBER 11 | AKBIZMAG.COM
FE AT UR E S
8 TELECOM & TECH Savings, Security, and Risk Mitigation
Why outsourced IT services are indispensable By Tracy Barbour
14 TRANSPORTATION The Business of Big Rigs
Staying on the road and on budget By O’Hara Shipe
106 HEALTHCARE Wellness in the Workplace Isn’t a Luxury
Mental health programs aren’t just nice, they’re smart By Isaac Stone Simonelli
Expanding Airlines Outside markets and operations bolster Alaska By Tasha Anderson
4 | November 2018
Northern Aviation Services
112 ALASKA NATIVE Showing Off the Last Frontier Sharing Alaska’s lands and cultures By Vanessa Orr
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CONTENTS NOVEMBER 2018 | VOLUME 34 | NUMBER 11 | AKBIZMAG.COM
MINING SPECIAL SECTION 24 DONLIN GOLD
22 TRILOGY METALS
Interior project hits major milestone
But hasn’t forgotten zinc, lead, gold, or silver
Trilogy Invests in Copper, Cobalt
By O’Hara Shipe
© Greg Martin Photography | Fairbanks Gold Mining Co.
Donlin Gold’s Record ROD
By Kathryn Mackenzie
34 OVERVIEW Alaska 2018— Mining in Review By Curtis J. Freeman
54 DIRECTORY The 2018 Alaska Business Mining Directory
60 DEMOLITION Explosives!
A specialized mining tool Donlin Gold
By Tasha Anderson Contributing Research by Rebecca Bergman
48 FORT KNOX
Gilmore Expansion at Fort Knox ‘We’re not standing still’ By Julie Stricker
RESOURCE DEVELOPMENT SPECIAL SECTION 90 OIL & GAS
Challenges facing Alaska’s seafood industry
‘The difficult we can do at once, the impossible takes a little longer.’
Facing the Blob
By Isaac Stone Simonelli
The First Oil Wells in the Alaska Arctic By Ross Nixon
Staying Safe on the North Slope
Facing Arctic weather, heavy equipment, and wandering bears By Julie Stricker
ON THE COVER
CORRECTIONS On page 86 of the October issue the incorrect photo for Credit Union 1’s president and CEO was used. The correct image of President/CEO James Wileman is above.
On page 96 of the October issue The 5 Year Rank & Revenue chart totals should read as follows: 2017: $15,504,784,506 2016: $14,395,144,176 2015: $14,833,534,571 2014: $15,047,597,497 2013: $16,155,000,000
On page 66 in the September edition of Alaska Business, Ana Swanson of Bering Straits Native Corporation’s name was spelled incorrectly.
Trilogy Metals President and CEO Rick Van Nieuwenhuyse presented an update on the Upper Kobuk Mineral Project, which includes its Arctic and Bornite developments, at an October Resource Development Council breakfast. Trilogy is one of many mining companies moving forward to responsibly develop the state’s natural resources. Cover Photo: © Matt Waliszek
DEPARTMENTS 7 FROM THE EDITOR 118 EAT, SHOP, PLAY, STAY 6 | November 2018
120 EVENTS CALENDAR
122 INSIDE ALASKA BUSINESS
121 BUSINESS EVENTS
124 RIGHT MOVES
126 OFF THE CUFF 128 ALASKA TRENDS
VOLUME 34, #11 Published by Alaska Business Publishing Co. Anchorage, Alaska
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irst and foremost the Alaska Business team sends out a big thank you to our readers. Your positive feedback on the new design and Premium Digital Edition have made all the hard work more than worth it—so, thank you! Thank you for reading, for taking the time to comment, and for continuing to support our efforts to highlight the individuals, organizations, and companies that shape the Alaska economy. Now, on to business. It’s mining month at Alaska Business—a month in which we place a spotlight on one of the state’s cornerstone industries. Even with just six major producing mines in the state (at the moment), the mining industry is a major economic driver in Alaska. In 2017 estimated total mining industry employment in Alaska averaged about 4,500 jobs and $404 million in annual wages, according to an early 2018 report prepared for Alaska Miners Association by McDowell Group. Along with jobs, safe and responsible mining brings in revenue. A lot of revenue. In 2016 the industry generated an estimated $2.5 billion in total gross revenue and paid the state $109 million in Fiscal Year 2017 (SFY2017). But the industry’s contributions don’t end at taxes; also in SFY2017 the Alaska Railroad Corporation received about $21 million from miningrelated activities; the Permanent Fund received more than $5 million; the Alaska Industrial Development Export Authority was paid $25 million for the use of the DeLong Mountain Transportation System and the Skagway Ore Terminal; and mining activities paid the Alaska Mental Health Trust close to $3 million during that time period, according to the report. And all Alaska Native Corporations benefit from mining activity through shareholder hiring programs, 7(i) ($250 million in 2017) and 7(j) royalty sharing payments, and through partnerships, such as those between Red Dog Operations and NANA Regional Corporation; Trilogy Metals and NANA; and Donlin Gold, Calista Corporation, and The Kuskokwim Corporation, to name a few. With the help of Curt Freeman, president of Avalon Development Corporation, this issue provides an overview of all major mining activities in Alaska including detailed production and throughput results. In addition, we discuss Donlin Gold’s permit progression and offer up a look at mining and… explosives! On our cover this month is Trilogy Metals President and CEO Rick Van Nieuwenhuyse, who graciously agreed to a photo shoot at the Dena’ina Center in between speaking engagements and a flight to Fairbanks… thank you Rick, you never broke a sweat. Inside, we delve into Trilogy Metals’ progress at its Upper Kobuk Mineral Projects located near the Red Dog Mine in the Ambler Mining District. And don’t forget to check out our latest feature, Off the Cuff, in which we get to know Visit Anchorage’s President and CEO Julie Saupe and her buddy Trinity a little better. We’re excited to present another a great issue this blustery November. So curl up next to a crackling fireplace with your favorite drink and enjoy! Alaska Business
Kathryn Mackenzie Managing Editor, Alaska Business
Even with just six major producing mines in the state (at the moment), the mining industry is a major economic driver in Alaska.
November 2018 | 7
TELECOM & TECH
Alaska Communications’ Business Technology Center. Alaska Communications
Savings, Security, and Risk Mitigation Why outsourced IT services are indispensable By Tracy Barbour
o business ever wants to have its telephone system stop working—especially at the beginning of a workday. But that’s what happened to Business Insurance Associates a few months ago. Thankfully, James Parks of James Parks Consulting was able to quickly resolve the situation. Business Insurance Associates doesn’t have any internal IT professionals, so it relies on Parks to manage its routers, servers, and other technology-related hardware. “He keeps us online and takes care of
8 | November 2018
everything, so we don’t have to spend the time and resources to figure it out,” says President Christopher Pobieglo. Business Insurance Associates, with a total of eight employees in Alaska and Idaho, is an independent commercial insurance broker that depends heavily on outsourced IT services. The Anchorage company uses The Agency Manager (TAM) Online from Applied Systems for various tasks, including client billing, maintaining policy records, and issuing certificates and auto insurance cards. The cloud-based system, which the company has used for about eight years, gives employees the flexibility to log in anywhere and work remotely. “It manages the entire operation,” Pobieglo says. “It’s super critical to what we do… They provide things on a level that we couldn’t [provide] internally.”
Varied Solutions Available IT providers offer a wide range of services to help businesses maintain the hardware and software they need to keep their operations running smoothly. The complexities of modern IT are driving many businesses to enlist the aid of managed services specialists, according to Cindy Christopher, Alaska Communications’ senior portfolio manager of managed IT services. Alaska Communications offers a range of managed IT options, including fullservice desk support, around-the-clock network monitoring, technology budgeting and planning, proactive equipment maintenance, and vendor management. “Along with general IT support, cyber security is a critical focus for businesses,” Christopher says. “Businesses need a provider that can provide layers of security, protecting from external threats. Alaska Communications’ engineers follow current cyber trends and employ industry best practices to protect against attacks.” However, IT is not a one-size-fits-all endeavor. It’s important to select a provider that understands the business and can provide appropriate solutions, Christopher says. She adds: “Alaska Communications works with customers to create unique
solutions to meet their needs. We take care of our clients’ IT so they can focus on running their business.” DenaliTEK offers fully managed services to cover a variety of IT processes and functions. In fact, the firm only offers fully managed IT services; it does not conduct hourly billing. “This allows us to focus on doing business one way and doing it well, as opposed to trying to be everything to everybody,” President Todd Clark explains. DenaliTEK’s fully managed service includes long-range planning to provide clients with a comprehensive solution at a fixed cost. The company creates a technology management plan with recommendations, performance statistics, and a budget that is updated quarterly. “We have a vision that when people look over the previous year, their IT expenditures will be pretty close to the budget that we establish with them,” Clark says. “Our managed contracts are always a 100 percent fixedfee; the only thing that isn’t included are the projects we’ve budgeted for in our technology management plan.” As part of its fully managed plan, DenaliTEK maintains the client’s entire infrastructure, including all backups, email, security compliance, and cloud infrastructure. DenaliTEK takes an all-inclusive approach by providing all the IT components that clients need. For instance, it furnishes all the technology for the backups, the antivirus solution, and the cloud infrastructure solution—which means clients can avoid purchasing and constantly upgrading their technology. By supplying the technology, DenaliTEK can ensure clients have best-in-class solutions while keeping their costs down. “I don’t want to see clients get hit with any costs that we haven’t predicted in their technology management plan,” Clark says. So what are some of the most common IT services that businesses outsource? Clark’s quick answer: service desk (responding to trouble tickets) and patches and updates. In terms of which industries outsource IT services the most, it’s not a cut-and-dry answer. It’s not a particular industry but a matter of size, Clark says. The companies he typically sees outsourcing IT are those with fewer than one hundred employees. “There’s a lot of wisdom in outsourcing if you have more than one hundred employees, but we see most of them when they’re smaller,” he says. Christopher has similar thoughts about the size of outsourcing companies. She www.akbizmag.com
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Why Outsource? Outsourcing IT services can provide companies with a variety of benefits. Managed IT allows businesses to keep their IT systems running and updated without hiring, training, and retaining fulltime IT staff, according to Christopher. It also allows the company to focus on its business goals, rather than worrying about day-to-day IT functions. Take a small doctor’s office, for example. Rather than hiring a full-time IT employee, paying salary and benefits, providing professional development and training, and having a plan for what to do when that person is sick or on vacation, managed IT providers can address those problems. “For a flat monthly fee, Alaska Communications’ managed IT services can help businesses ensure smooth operations, reduce risk, and eliminate budget uncertainty,” she says. Clark says the key advantages of outsourcing IT boil down to depth in expertise and coverage. With outsourcing, 10 | November 2018
“It’s something we couldn’t afford to hire someone for on a full-time basis being a company our size… To have an onsite IT administrator, it would cost $65,000 to $105,000 annually, plus 40 percent of that base in benefits.” —Paula Bradison, Owner, Alaska Executive Search
a business can instantly have a team managing and following best practices because a managed service provider is an expert in managing IT staff members and in knowing best practices. This level of expertise is often too extensive or impossible to have with a single, full-time employee. Also, having managed services gives the company round-the-clock access to a staff of IT experts. “With fully managed services, you have a team, so you’re not worried about coverage during after hours, vacations, and other times,” Clark says. DenaliTEK has fifteen employees available to assist businesses with a broad range of needs. Sometimes that means stepping in to manage a system after an employee has been let go. Other times, it entails supplementing the efforts of internal IT staff. DenaliTEK also offers a complimentary onsite consultation for businesses that are contemplating managed IT services. During the consultation, Clark starts by asking probing questions, and sometimes that’s enough to determine the feasibility of using a managed IT provider. If it’s not, he can also schedule a free network assessment. “Even if they don’t go with our services, it’s an eye-opener in all the things they should be paying attention to,” he says. For Bradison, cost, security, and risk mitigation are the main motivators for outsourcing. She has an extensive amount of employee and client data to maintain and protect and cannot afford for her computer system to be down— not even for a few hours. “Outsourcing is a necessity for me,” Bradison says. Bradison outsources IT administration for Alaska Executive Search, which has eight employees, and her consulting firm,
Bradison Management Group, which has four employees. The external administrator not only maintains their network but also monitors it twenty-four hours a day and issues alerts if there is any unusual traffic. Bradison says, “It’s something we couldn’t afford to hire someone for on a full-time basis being a company our size… To have an onsite IT administrator, it would cost $65,000 to $105,000 annually, plus 40 percent of that base in benefits.” Also, there are IT network administration duties that are simply beyond Bradison’s level of technical expertise. Most of her software applications are web-based—plus there are certain regulatory requirements for businesses that accept credit cards and store private health information that make outsourcing IT a necessity for Bradison. Cost and risk are also primary reasons for outsourcing IT at Business Insurance Associates. Specifically, Pobieglo uses outsourcing to reduce and control the company’s IT costs. “It brings down the cost compared to if we tried to do it ourselves. It also gives us a defined cost, so we can budget and account for that. It keeps the company focused on the revenue-generating activities,” he says. The company pays about $50 to $100 per hour to use the expertise of James Park Consulting, and it’s money well-spent, Pobieglo says. “To be able to have him on call when we do is worth the expense,” he explains. “He knows our system... We’re comfortable with him.” Using an IT provider also helps the company reduce its risk. It gives Business Insurance Associates the ability to maintain accurate information, which is critical for its industry. Not keeping accurate information can result in errors and omissions claims,
Alaska Executive Search
says: “While Alaska Communications’ managed IT can be scaled to fit any size business, typically small- to mid-size companies are the best candidates for this service. We see the highest need for managed IT in the retail and professional services industries.” Paula Bradison, owner of Alaska Executive Search, has a unique vantage point when it comes to IT outsourcing. Her fullservice staffing agency helps companies fill IT positions on a short-term basis. The positions encompass everything from help desk and network administration to chief information officer. Network administration positions are a prime example. When there is a systemwide modification, companies often hire temporary employees for three to six months during the implementation. This allows them to minimize the stress that tends to go hand-in-hand with significant software changes. It also permits the company to acquire a temporary employee with particular expertise and/or to augment a permanent staff member. Bradison says she has noticed an uptick in demand for certified security analysts or IT security specialists. That makes sense given the increase in security attacks that are threatening companies’ proprietary data. And some businesses are taking a proactive stance by outsourcing IT services to evaluate the potential security risks within their computer system.
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At Alaska Communications’ Business Technology Center clients learn about managed IT services. Alaska Communications
which are made against professionals for inadequate work or negligent actions. “Errors and omissions are a big concern for insurance brokers,” Pobieglo says. “To be able to keep the accurate data really reduces our E&O risks.” Outsourcing with TAM Online also provides a major benefit for Business Insurance Associates. It costs the company about $5,000 a month to use the software, which is a significant—but justifiable—expense, according to Pobieglo. With the agent software system, the company has access to broader resources. “They have products and services to offer that we could never do in our office with our size and in Alaska,” he says. Granted, there are more cost-effective solutions available, but they don’t offer the same capabilities, level of service, and other benefits as TAM Online, according to Pobieglo. “It was important for us to have a system our employees could understand and use,” he says. “Plus, Applied Systems provides extensive support... They can take over our system remotely and address technical problems.” Pobieglo says he is comfortable with outsourcing the agent software system through Applied Systems, which is located outside Alaska. But it’s a different story when it comes to his intraoffice IT and hardware needs. “I would be pretty 12 | November 2018
reluctant to outsource outside Alaska,” he says. “There are some things that just have to be done in person when it comes to maintaining the hardware.” Bradison agrees. She outsources IT services to two companies in Alaska: HiTech Alaska and Applied Microsystems. Alaska is a unique and relationship-based state, and using a local provider makes a difference, she says. She adds: “It’s awfully nice to know that somebody is in our time zone. We do have unique concerns, such as earthquakes, and computer accessibility can make the world small.” Bradison and Pobieglo share the views of many business owners in Alaska. Most Alaska-based companies work with in-state providers, according to Christopher. “While most managed IT can be performed remotely, businesses like the feeling of having their provider close by,” she says.
Not for Everyone Despite the advantages of outsourcing IT for some, not all businesses choose to go this route. For certain companies, it’s simply not feasible. For instance, companies that are highly regulated or have complex lines of business application requirements typically have their own IT departments. Corporations or large businesses usually have the scale that allows for internal IT departments. However, Christopher says,
“Managed IT is not all or nothing. Some businesses have internal IT departments and contract out for one service, like help desk support.” On the other hand, Clark says, some companies opt not to outsource IT services because of their perception of the cost. They make a skewed apples-to-oranges comparison of outsourcing with maintaining a full-time IT employee. But a managed service provider can deliver a tremendous amount of expertise and benefits, including implementation of best practices, data backup, cloud storage, licensing, anti-virus software, support, and 24/7 remote monitoring and management. Over the years, managed IT services have evolved from a flat-rate scenario to clients investing in comprehensive services that result in fewer service calls. This translates into value and convenience for clients. “With managed services, it appears that we’re doing less work, but we’re increasing the productivity and reducing the frustration for our client,” Clark says. The importance of outsourcing IT for some companies is indisputable, Pobieglo says. “It’s become such a big piece for business owners to be able to effectively run their business,” he says. “Outsourcing is here, and it’s not going away.”
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T R A N S P O R TAT I O N
The Business of Big Rigs Staying on the road and on budget By O’Hara Shipe
n many ways, the Alaska economy runs on the trucking industry’s ability to keep up with supply demands. Whether trucks are hauling lumber and building materials along the Dalton Highway or are traversing the Glenn Highway on a routine grocery delivery, Alaskans depend on the trucking industry to be efficient and reliable. In turn, the transportation companies rely on retailers, repair shops, and truck manufacturers to keep them on the road and on budget. Since 1969, TrailerCraft has been one of the leading truck parts and sales facilities in Alaska. In 1994, the company became the state’s only full-service Freightliner dealer; it has since continued to supply equipment to entities statewide,
14 | November 2018
“Our parts and service departments are made up of industry professionals who really know their stuff… they play a big role in supporting the trucking industry up here.” —Mike Lash General Manager of Alaska Operations, RWC Group
Driver Will Young wipes grease from his hands after performing maintenance on his rigâ€™s front axles. Oâ€™Hara Shipe
November 2018 | 15
including State of Alaska Department of Transportation (DOT) plows and sanding trucks, Blue Bird school and transport buses, and truck flatbeds. In addition to selling Freightliner trucks, TrailerCraft also sells Western Star industrial trucks. RWC Group is a leading truck supplier with two locations in Alaska in Fairbanks and Anchorage in addition to locations in Arizona (including the company’s headquarters), California, and Washington State. The full-service center stocks a variety of brands such as International, Isuzu, and Hino. Recognizing the financial investment required to purchase a new truck, RWC has a number of used trucks for sale as well as leasing options. It also offers in-house financing options.
But according to RWC Group’s General Manager of Alaska Operations Mike Lash, the company’s group of dedicated fulltime mechanics is one of the most vital aspects of the business. “Our parts and service departments are made up of industry professionals who really know their stuff. I think they play a big role in supporting the trucking industry up here,” says Lash.
Unique Trucks and Routes Buying a new truck is a huge investment, and sole proprietors or companies operating a fleet of vehicles need to be sure they select the right rig for the job and for the road—and of course there are state and federal restrictions that need to be a
part of the decision-making process. Operating under Alaska DOT, the Measurement Standards and Commercial Vehicle Enforcement (MSCVE) is responsible for the annual inspection of weigh stations, commercial motor vehicle safety, size and weight enforcement, and issuing permits. In 2016 MSCVE weighed 59,432 vehicles for compliance at weigh stations throughout Alaska, discovering 937 permit violations. Although the number of weight violations may seem reasonably low, each violation represents additional stress on fragile Alaska roads and bridges. Where this becomes particularly important is in the number of axles on the truck. The US DOT Federal Highway Administration states that the weight of a single
“It all comes down to cost per mile. Once the cost per mile of a used truck exceeds that of a brand-new truck, you replace it—and that includes things like depreciation and fuel consumption.” —Mike Lash General Manager of Alaska Operations, RWC Group
16 | November 2018
An Alaska West Express truck drives along the Glenn Highway toward Wasilla. O’Hara Shipe
axle commercial vehicle cannot exceed 20,000 pounds while operating on federal highways. That weight includes the vehicle’s freight, equipment, and driver. As additional axles are added, the allowable weight of the rig increases if the weight on a single tire does not exceed 600 pounds per linear inch of tire width based upon the tire manufacturer’s rating of nominal tire width. But, as a truck increases its number of axles, the amount of damage done to a road also increases. To illustrate, adding two additional axles to a rig will increase road damage by roughly sixteen times. And damage goes both ways; Alaska’s weather and some of its roads put industrial trucks at risk of accelerated wear and tear. Alaska’s world-famous Dalton Highway is just such a road. “In my mind, the Dalton Highway is the only special application road in Alaska… It’s 400 miles of rugged, hilly, desolate Arctic environment. It has some of the steepest grades in the trucking industry, and some of it isn’t even paved. It’s really rough on the trucks and it’s not uncommon for even the best fleets to bring their rigs in for a full inspection after each run on that route,” says Lash. The harrowed road is particularly harsh
on radiators and front-end components. As Lash puts it, the Dalton Highway requires a special kind of truck. Generally, these trucks require a long 300-inch wheelbase as measured from the front axle to the back tandem axle. That is roughly 100 inches longer than most standard rigs. The reason for the elongated wheelbase is that it enables trucks to carry a heavier load by distributing the weight over a larger surface, thereby reducing the number of trucks needed to haul supplies. Trucks are also restricted by the Federal Bridge Law, which dictates the number of required axles to haul a specific weight load. While Alaska relies on recommended Federal Bridge Law calculations, it does not allow the usage of supplemental axles without a special permit, including additional weight allowances for lift axles. “If you’re in the Lower 48, you’ll see lift axles quite often. Those are the axles that either can run in front of or behind the rear tandems that can be raised or dropped to provide immediate additional payload. Typically, these axles allow for an additional gross vehicle allowance, but at this point Alaska does not give any additional weight allowances, and I think that anomaly makes us a little different,” explains Lash.
November 2018 | 17
Longevity and Maintenance Much like non-commercial vehicles, it is hard to put a life expectancy on a new truck. Factors such as weather, routes traveled, and general maintenance frequency all play a role in the life of a truck. Although there is no set standard dictating when a truck should be replaced, typically major fleets replace their rigs every four or five years. But the recession and cutbacks to the number of operating trucks may be shifting that number as fleets are opting to invest more in repairs. RWC Group reports that while the maintenance and repairs side of their business has remained relatively steady over the past three years, they are noticing that 18 | November 2018
the trucks they service are coming in for more repairs than usual. “We are still doing a lot of regular preventative maintenance and general repairs, but it seems like we are seeing more electrical issues now. We are also seeing issues with emissions and water treatment systems, but I think that may be due to the climate changes we are seeing,” says Lash, who uses a general formula to determine when a truck needs to be replaced. “Well, it all comes down to cost per mile. Once the cost per mile of a used truck exceeds that of a brand new truck, you replace it—and that includes things like depreciation and fuel consumption. Probably the number one benefit of new trucks
is that they’re much more fuel efficient than they were even five years ago.” Since purchasing a new rig is costly —typically $75,000 or more—there are checks in place to ensure the safety and longevity of a truck. The Alaska Trucking Association says that anyone driving a commercial vehicle must conduct a visual pre-trip inspection and fill out a written post-trip inspection for every day the vehicle is operated. Additionally, drivers are required to have their rigs inspected annually by a certified inspector who maintains a record of the inspection and provides the driver with an annual decal to be displayed on the passenger side window. Drivers must
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also retain a detailed maintenance record for the previous year. If these regulations are not followed or DOT spots a safety hazard, the truck can be removed from the road. In 2016, DOT reported that a total of 788 unsafe commercial vehicles were removed from the road and a total of 7,761 inspections were conducted by Commercial Vehicle Enforcement officers.
Approaching Fuel Efficiency While there a number of tricks to improving fuel economy—reducing speed, not riding the brakes, and avoiding quick accelerations—the only guaranteed way of making certain a truck is getting the best www.akbizmag.com
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www.altrogco.com November 2018 | 19
RWC Alaska’s Anchorage storefront. ©Max Slama | Optic Nerve Photography & Design
gas mileage is to drive a fuel-efficient rig. Next to labor costs, fuel is a trucking company’s largest expense, which is why many of the major brands are working to develop new fuel-efficient models. If less fuel is used to transport goods, it’s a better profit margin for drivers and trucking companies. “We’re seeing 10 percent fuel economy gains in newer truck models. When you think about how many miles are put on an entire fleet—say around 100,000 miles—10 percent becomes a pretty substantial number. If you’re saving $80,000 in fuel costs that can go back into maintaining the fleet,” Lash says. For example, Peterbilt recently came out with its 579 model that uses aerodynamic innovation to cut down on wind resistance. The same model also has an option to use compressed natural gas as a fuel alternative. International boasts a ProStar model that claims 11 percent greater fuel economy than its competitors. Hino has a new diesel-electric hybrid called the Hino 195h. There are already 10,000 195h diesel-electric hybrids on the road and it is the only commercial hybrid on the market that is both economical and environmentally friendly, according to the company. 20 | November 2018
“We’re seeing 10 percent fuel economy gains in newer truck models. When you think about how many miles are put on an entire fleet—say around 100,000 miles—10 percent becomes a pretty substantial number.” —Mike Lash General Manager of Alaska Operations, RWC Group
But a reduction in operating costs is not the only reason truck manufacturers and trucking companies are working toward fuel economy. Companies like Lynden are turning their attention to environmental conscientiousness. More than 80 percent of Lynden trucks are less than five years old and 100 percent are equipped to meet new emission standards. These newer, more efficient tractors and ultra-efficient diesel engines have dramatically improved fuel economy and reduced air emissions, earning Lynden a spot in the top seventy-five Green Supply Chain Partners.
Lynden Transport took significant action in terms of green initiatives in 2008, when it became the first Alaskabased company to join SmartWay, a collaboration between the EPA and transportation companies to voluntarily increase fuel efficiency and reduce air pollution. In 2009, Lynden earned the Green Star Award for environmental stewardship, another milestone as it was the first trucking company to qualify for the green program as well as the first business in Juneau to do so.
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MINING SPECIAL SECTION | TRILOGY METALS
Trilogy Invests in Copper Cobalt But hasn’t forgotten zinc, lead, gold, or silver
Nieuwenhuyse at an October Resource Development Council breakfast. “Bornite is still in early-stage exploration, but it’s a much bigger scale project and certainly has a lot more potential to grow both in copper and cobalt, which is a strategic, critical metal. If you want clean, green energy in a clean, electric car that doesn’t burn fossil fuels, you have to have metals to do all that.”
By Kathryn Mackenzie
here are a lot of moving pieces to the Upper Kobuk Mineral Project (UKMP), but when all is said and done, the project in the Ambler mining district in Northwest Alaska is expected to produce copper, zinc, lead, gold, silver, and cobalt. Before that can happen, there are a number of steps that Trilogy Metals and its three partners must complete, including the receipt of critical permitting and the permission to build a private access road. Trilogy Metals, which has spent $122 million to-date on UKMP, holds interests in two primary projects in the Ambler district: the Arctic project and the Bornite project. “Arctic’s a little further advanced [than Bornite]. We completed a pre-feasibility study that demonstrates that it’s a very viable project. It’s not a marginal project by any chance and we don’t need higher metal prices for this to work. We just need a road,” said Trilogy Metals President and CEO Rick Van
22 | November 2018
Rick Van Nieuwenhuyse, President and CEO, Trilogy Metals © Matt Waliszek
Trilogy Metals partnered with NANA, the Alaska Industrial Development and Export Authority (AIDEA), and South32 to advance UKMP. The business arrangement with NANA involves giving Trilogy Metals access to about 350,000 acres of NANA land. In return, NANA receives net smelter royalties of 1 percent to 2.5 percent and the option to become an equity partner (16 percent to 25 percent) or receive a net proceeds royalty (15 percent NPI). For its part, Trilogy Metals is committed to promoting employment for NANA shareholders, as well as providing scholarships and ensuring the area’s subsistence lifestyle is not interrupted by project operations. According to 2017 numbers, nearly 65 percent of UKMP’s direct hires are NANA shareholders. Nearly 50 percent are from the Upper Kobuk region.
The Projects With its three partners in place, Trilogy is set to advance UKMP. But what does that involve? The Arctic Project sits underneath the top of one of the first set of mountains in the Brooks Range. Trilogy estimates the project has probable mineral reserves of 43 million tonnes. “It’s basically 5 percent copper equivalent, 2 percent copper, 2 percent zinc, 0.6 percent lead, half a gram of gold, and over an ounce of silver. That’s about ten times the average grade being mined in open pit copper mines today. So this is not a lowgrade deposit,” says Van Nieuwenhuyse. Trilogy expects Arctic to have a mine life of twelve years and mill capacity of 10,000 tons per day. The company is focusing on three separate “high-value” concentrates: copper (90 percent recovery), zinc (91.7 percent recovery), and lead (80 percent recovery). It intends to put the mill “right across the valley very conveniently located and close to the pits, and then our waste and tailings facilities at the head of the valley.” The mill will be built as a “typical crushgrind-flotation” mill circuit with onsite power generation fueled by liquid natural gas (LNG). The LNG could come from a few different locations. A plant is already located in the area but would have to be expanded to accommodate the new mines’ fuel needs. In addition, Siemens is looking at building a plant in cooperation with Knik Village Corporation, “so there’re some alternatives to look at and some business opportunities that we’ll be investigating starting this year. But the idea would be to either truck it or rail it up to Fairbanks.” The second project at UKMP is Bornite. Located about twenty miles from the Arctic Project, the company’s primary focus at the Bornite Project is copper and cobalt. “The cobalt is located in the pyrite mineral, which is rejected in our copper sorting. So the higher-grade copper concentrate we make, the more we put the cobalt in the tails, and then we can separate the cobalt from pyrite in the tail… we get good cobalt out of that. And we’re working on that right now,” he says. As of early fall, the company had drilled twenty-two exploration holes at a depth of 1,200 meters each. It anticipates being able to extract 6 billion pounds of copper from the proposed Alaska Business
pit and 77 million pounds of cobalt. “We have spent about $20.8 million dollars since this resource was put out a few years ago, and this is the South32 money. We drilled twenty-two holes up to 1,200 meters in depth on the North and East plane of the deposit. So we’ll be updating the resource early next year when we get all the results from this year’s drilling program finished and wrapped up.”
What’s Next? Before Trilogy, NANA, AIDEA, and South32 see tangible results from UKMP, there are a number of hurdles that must be cleared. First, the foursome must receive various federal and state permits and borough approval. The 404 Wetlands Permit is the only federal permit needed; all other significant permits will come from the state, including mine operation; air quality; dam operating; and water discharge. Finally, they will need Northwest Arctic Borough Authorization. And, of course, AIDEA and Trilogy have to get the access road built. The road is through scoping and the draft EIS, which is set to be released to the public for comment during the first quarter of 2019. The current schedule has the EIS completed by the end of the year with a record of decision published “shortly after that.” One point that Van Nieuwenhuyse says is particularly important to note is that “this road is intended to be industrial access only, not open to the public. It has been quite controversial because although the application was for a private road, that wasn’t made clear by the documentation that BLM [the Bureau of Land Management] put out to the public during the scoping process. So I think that it has now been made very clear that it’ll be maintained as a permanent private road and it will be maintained with a guard station to ensure that it remains a private road,” he says. Trilogy estimates it will employ about 450 people at the mine on a rotational basis, with additional jobs related to maintaining and making the road. “We’re doing all the pre-application work now hoping to get the notice of intent and the EIS/NEPA notice that we can kick off. If the Trump Administration executive orders the hold firm, it should be a one to two year process,” says Van Nieuwenhuyse. November 2018 | 23
MINING SPECIAL SECTION | TRILOGY METALS
“The real guts and the working part of the arrangement is the oversight committee and the subcommittees that work underneath that specifically address subsistence related issues, workforce development, and just making sure that we’re aware of any community concerns. We’ve been working with NANA since 2011 and it’s a great working relationship,” says Van Nieuwenhuyse. The company’s second partnership is to help it advance its infrastructure needs. Specifically, AIDEA and Trilogy are working to obtain the proper permitting to build a 211-mile private access road connecting the Ambler mining district to four ice-free ports in Point MacKenzie, Anchorage, Seward, and Whittier, according to Van Nieuwenhuyse. “The road that’s been proposed would connect to the Dalton Highway which then connects down to Fairbanks and the rail and down to the ports in Southcentral Alaska,” he says. AIDEA has begun the permitting process for the road and a draft environmental impact study (EIS) is anticipated by March 2019, with the final EIS expected by the end of 2019. “Our last partnership is a financial one with a company called South32. You’ll notice the Australians have shown up in numbers here in Alaska in the last year or two. South32 were spun out of the largest mining company in the world in 2015 and they produce a whole host of metals,” says Van Nieuwenhuyse. Trilogy and South32 signed an agreement in which South32 has the option to form a 50/50 joint venture to hold Trilogy’s Alaska assets, an option it can exercise by January 2020 by contributing approximately $150 million. The agreement also calls for South32 to receive option payments of $10 million a year for up to three years. “They are the largest manganese producer the world; they also produce nickel, silver, lead, zinc, and both thermal and energy coal, but they don’t produce copper and that is the core of the relationship that they’ve developed with Trilogy Metals,” says Van Nieuwenhuyse. He goes on to note that the companies have just finished the second year of the three-year option, “so at the end of next year they’ll have to be making a big decision about forming a 50/50 partnership by investing $150 million, which is plenty of money to get both projects well through permitting and feasibility and start thinking about building things.”
MINING SPECIAL SECTION | DONLIN GOLD
24 | November 2018
Interior project hits major milestone
By Oâ€™Hara Shipe
n August, a joint Bureau of Land Management (BLM) and US Army Corps of Engineers Federal Record of Decision (ROD) was handed down to Barrick Gold Corporation and NOVAGOLD Resources, who jointly own Donlin Gold. Located ten miles from Crooked Creek, the proposed Donlin Gold Mine sits on what is predicted to be one of the largest and highest-grade undeveloped open pit gold endowments in the world. If the estimates are correct, the proposed mine could produce an average of 1.3 million ounces of gold annually during the mineâ€™s projected twenty-seven-year lifespan. Even with the ROD, it will likely be years before the mine is developed and even longer before it begins producing.
Aerial view of the proposed Donlin Gold Mine site, situated near the Kuskokwim River. Donlin Gold
November 2018 | 25
MINING SPECIAL SECTION | DONLIN GOLD
MINING SPECIAL SECTION | DONLIN GOLD
“This has been a thorough process, with more than twenty years of planning and development, but I think it clearly demonstrates that the project has a track record of engineering excellence and a strong culture of safety, environmental stewardship, and community engagement.” —Andy Cole General Manager Donlin Gold
Aerial view of the proposed Donlin Gold Mine site. Donlin Gold
26 | November 2018
In December 2012 Donlin Gold and its partners assembled a team of field scientists to conduct feasibility studies to include in the initial Section 404 permit applications and Environmental Impact Statement (EIS). Enforced by the US Army Corps of Engineers and overseen by the Environmental Protection Agency (EPA), Section 404 of the Clean Water Act regulates the discharge of dredged or fill material into waters of the United States, including wetlands. The program largely affects water resource projects like constructing dams and levees as well as certain infrastructure developments and mining projects. The EPA suggests that, for most material discharge that will only have minimal adverse effects, a general Section 404 permit is sufficient, allowing eligible projects to proceed with little delay. In Donlin Gold’s case, acquiring the required 404 permit was more difficult than anyone initially anticipated. “I think originally when we first applied for our Section 404 permit we may have thought the process would have gone a lot quicker. But ultimately, I think it wasn’t that bad in terms of an extended review time considering the complexity of the project. It was a very thorough environmental review, and that’s what matters most,” says Donlin Gold External Affairs Manager Kurt Parkan. The Donlin Gold proposed project includes several items that require review under Section 404, including “cut-and-fill for construction of roads, airstrips, port facilities, laydowns and work areas, mine site facilities, material sites, and installation of culverts and bridges at stream crossings, power poles, and the natural gas pipeline,” according to the ROD, as well as a port at Jungjuk Creek, two barge landings on the Kuskokwim River, and a natural gas pipeline crossing, also at the Kuskokwim River. “Impacts to navigable waters include up to three acres and 2,472 linear feet of [waters of the United States],” the report states. For the Section 404 process, it was incumbent on Donlin Gold to prove that steps had been taken to avoid impacts to wetlands, streams, and other aquatic resources during construction and throughout the mine’s planned operation. With such an extensive affected www.akbizmag.com
MINING SPECIAL SECTION | DONLIN GOLD
An Extensive Permitting Process
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MINING SPECIAL SECTION | DONLIN GOLD
Colonel Michael Brooks (left), commander of the US Army Corps of Engineers–Alaska District, and Joe Balash (right), US Department of the Interior’s Assistant Secretary of Land and Minerals Management, sign the first joint record of decision between the Corps and Bureau of Land Management, August 13, 2018. Donlin Gold
“[The] Joint ROD furthers the administration’s goal of being good stewards of public funds by eliminating duplicative processes.” —Lesli Ellis-Wouters, Communications Director, BLM Alaska State Office
landmass, the US Army Corps of Engineers has taken on a special role within the permitting process. “Whenever wetlands are impacted the Corps is involved, but in the past the Corps hasn’t really taken on these projects as the lead agency in the EIS process. Sometimes the EPA will step in 28 | November 2018
if water is the primary issue, but because we’ve got such a large project involving a lot of wetlands, the Corps has taken the lead,” says Parkan. Donlin Gold initially proposed a plan to barge supplies and fuel up the Kuskokwim River during the shipping season between June and October, but
when the company held community outreach meetings it ascertained that some residents were uncomfortable with the amount of diesel that would be traveling up the river. In response, Donlin Gold went back to the drawing board to retool its strategy. The result was a proposed natural gas pipeline that would supply the power plant while cutting down on the number of barges. Overall, the alternative allowed Donlin Gold to reduce the amount of barged diesel by two-thirds. However, the proposed pipeline requires the involvement of BLM. Donlin Gold’s suggested buried natural gas pipeline would measure 14 inches and span 312 miles from the Cook Inlet region to the mine site. This means that
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Where Engineering Meets the Environment. the pipeline would cross 97 miles of federal lands that are affected by the Alaska Native Claims Settlement Act, requiring both an Offer to Lease for the right-of-way portions of the pipeline that cross those lands from BLM and cooperation from two Alaska Native corporations: Calista Corporation and The Kuskokwim Corporation (TKC). Calista owns the mineral rights and TKC owns the surface rights, which means Donlin Gold is now operating the project under a mining lease with Calista and a surface use agreement with TKC. The agreements between all parties have granted Donlin Gold a thirty-year right-of-way grant for the construction, operations, maintenance, and termination of the natural gas pipeline. It also ensures www.akbizmag.com
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MINING SPECIAL SECTION | DONLIN GOLD
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MINING SPECIAL SECTION | DONLIN GOLD
that the mine will provide direct and indirect economic benefits (contracting and hiring preferences) to Calista and TKC, as well as stringent environmentalstewardship obligations. The complex permitting and agreement process has a historic aspect to it. According to Lesli Ellis-Wouters, communications director for the BLM Alaska State Office, this is the first Joint ROD between the US Army Corps of Engineers and BLM in the nation. “This Joint ROD was in keeping with Executive Order 13807… signed August 15, 2017, specifically under the order’s ‘One
“It was a very thorough environmental review, and that’s what matters most.” —Kurt Parkan External Affairs Manager, Donlin Gold
Federal Decision’ initiative. This Joint ROD furthers the administration’s goal of being good stewards of public funds by eliminating duplicative processes,” says Ellis-Wouters.
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Remaining Opposition to the Project As with all complex projects, there are some who do not share the company’s excitement. A group calling itself the Yukon-Kuskokwim River Alliance has said that they are “outraged” by the ROD. Lead by cofounders Alissa Nadine Rogers and Danielle Craven in Bethel, the group claims that the social and environmental impacts of the mine would be detrimental to the subsistence region and traditional Yup’ik culture. The Alliance’s claims stand in contrast to what Donlin Gold says was a thorough process that included numerous community-centric conversations. “I think the project has become a better project as a result of the extensive amount of conversations, dialogue, and feedback that we’ve received over many years of interaction with stakeholders in the region. I think we’ve counted over 400 meetings between village meetings, mine tours, and agency hearings. We’ve also been active with newsletters and social media because it’s really important for us to share with the people of the region what plans we, TKC, and Calista have,” says Parkan.
Looking to the Future Even with a ROD in hand, Donlin Gold has some hurdles to overcome before the project breaks ground. First, the company must secure a right-of-way from the State of Alaska for the portions of the pipeline that go through state managed lands. Alaska Statute 38.35.050 requires that anyone who wants to own a pipeline located in whole or in part on state land must apply for a noncompetitive right-of-way lease of the state land. Donlin Gold is hopeful that it will receive the right-of-way later this year. Second, the State of Alaska has to approve and then issue Donlin Gold’s financial insurance and integrated waste management permits. “Securing the majority of our major permits to construct and operate is sort
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MINING SPECIAL SECTION | DONLIN GOLD
of what we’re focused on right now. We are also looking at ways to optimize the project, and so those studies will continue to look at ways to reduce the initial capital expenses and operating expenses,” says Parkan. Donlin Gold will also further their outreach efforts with Calista and TKC, including job training and establishing preferential hiring processes for shareholders. In 2017 Donlin Gold and TKC
formed the Donlin Gold Kuskokwim Education Foundation (DGKEF), which focuses on scholarships for individual students and one-time certification and training programs for shareholders. The program hopes that these efforts and its recent partnership with EXCEL Alaska
will prepare Kuskokwim region shareholders for jobs associated with large development projects in their community. This semester six students are receiving scholarships that can be applied to their university and college degrees, as well as technical certificates. “DGKEF makes a substantial contribution to the EXCEL Alaska program, an 8th through 12th grade program that
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amount of conversations, dialogue, and feedback that we’ve received over many years of interaction with stakeholders in the region. I think we’ve counted over 400 meetings between village meetings, mine tours, and agency hearings… It’s really important for us to share with the people of the region what plans we, TKC, and Calista have.” —Kurt Parkan External Affairs Manager Donlin Gold
focuses on personal, social, and career development; service training; urban familiarization; leadership; character; and life skills development for more than 4,000 students in rural Alaska. DGKEF has also contributed to the heavy equipment training for fifteen TKC shareholders and driller assistant training for twenty-three TKC shareholders,” says TKC’s Vice President and Chief of Staff Andrea Gusty.
Donlin Gold General Manager Andy Cole believes that the company’s focus on providing primary and secondary benefits to the Yukon-Kuskokwim region makes the project a model worth replicating. “This has been a thorough process, with more than twenty years of planning and development, but I think it clearly demonstrates that the project has a track record of engineering excellence and a strong culture of safety, environmental
stewardship, and community engagement, all values that will remain constant,” says Cole in a press release. “We believe Donlin Gold can be a model of responsible mine development with the potential to generate meaningful benefits for our Native corporation partners and communities throughout Alaska for many decades to come.”
More than twenty years ago, Fort Knox gold mine began production just outside Fairbanks. With hard work and a dedicated staff, Fort Knox has become one of Alaska’s most successful mines. Fort Knox’s support for Friends of Creamer’s Field and the waterfowl refuge is a testament to the mine’s commitment to environmental stewardship. Creamer’s attracts visitors from around the world during the spring bird migration, local residents enjoy its quiet walking trails, and both children and adults benefit from Friends of Creamer’s Field’s many education programs that raise awareness of our natural environment. Learn more at friendsofcreamersfield.org. www.akbizmag.com
Committed to Alaska
November 2018 | 33
MINING SPECIAL SECTION | DONLIN GOLD
“The project has become a better project as a result of the extensive
MINING SPECIAL SECTION | OVERVIEW
Alaska 2018— Mining in Review By Curtis J. Freeman Curtis Freeman is the owner and president of Fairbanks-based Avalon Development Corporation. He may be contacted via email at avalon@ avalonalaska.com or for more information visit avalonalaska.com.
lthough the Alaska mineral industry is in better health in 2018 than it has been in the last five years, the spirited recovery that was in progress in the first quarter of the year turned into a dead-cat bounce, a minor unsustained recovery after a long down trend extending back to 2012. Hindsight says the cause was threat of a global tariff war that introduced uncertainty and angst into the natural resource sector. Metal prices soon reacted as demand softened, and by the end of the second quarter virtually all of the precious, base, and strategic metals had declined in price significantly or were showing signs of doing so in the near future. Alaska’s producing mines 34 | November 2018
are feeling the pinch of declining metals prices, and—not surprisingly—the mineral exploration sector had budgets slashed in response. With exploration funds shrinking for many explorers, their previously approved work programs had to be downsized or eliminated completely. To be sure, companies are spending 10% to 15% more on exploration than they did in 2017, but the prognosis for the mining industry in 2019 remains murky.
Western Alaska n Teck Resources and partner NANA Regional Corporation announced yearend 2017 and first-half 2018 results from Red Dog mine. For 2017 the mine produced 541,900 tonnes of zinc in concentrate at a mine grade of 15.5% with mill recoveries steady at 82.1%. The mine also produced 111,300 tonnes of lead in concentrate for 2017 at an average grade of 5% with mill recoveries of 52.3%. Year on year, zinc production was 13% higher in 2017 while lead production was 29% lower.
Gross operating profit for the year was $874 million, compared with $668 million in 2016. Mill throughput for 2017 was up slightly at 4,270,000 tonnes. During 2017 the mine paid royalties of $412 million versus royalties of $282 million in the year-previous period. In the latter part of 2017 the company began a $110 million mill upgrade designed to increase average mill throughput by about 15% over the remaining mine life, helping to offset lower grades and harder ore in the Aqqaluk pit. For the first half of 2018 the mine produced 275,100 tonnes of zinc in concentrate at an average grade of 16.2% with mill recoveries at 83.9%. The mine also produced 45,400 tonnes of lead in concentrate at a grade of 4.6% with mill recoveries of 48.9%. The mine posted a $342 million operating profit for the first half of 2018, up significantly from the $245 million profit in the year previous period. Royalty costs for the first half of 2018 quarter were $96 million versus $70 million in 2017. The expected 2018 production of contained
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MINING SPECIAL SECTION | OVERVIEW
metal is now estimated at 525,000 to 545,000 tonnes of zinc contained in concentrate and 95,000 to 100,000 tonnes of lead contained in concentrate. n Solitario Zinc Corporation announced that a wholly owned subsidiary of Teck Resources commenced a field program on the Lik zinc project with both companies sharing the exploration costs. The work program will consist of geologic mapping, relogging of existing core, and conducting a gravity geophysical survey over a substantial portion of the 6,075-acre property. The project has an
indicated resource of 17.3 million tonnes grading approximately 12% zinc equivalent and an additional 2.9 million tonnes of inferred resource at approximately 11% zinc-equivalent. n Graphite One Resources commenced a field program at its Graphite Creek graphite project. The planned work consists of continued community engagement, 2,000 meters of core drilling to tighten drill spacing within the identified mineral resource, collection of core samples to be used for additional metallurgical test work, assessment of various alternative project
access routes, and reconnaissance level fish and wildlife surveys. n The big news was the announcement that 50/50 partners NovaGold Resources and Barrick Gold received major permits from two federal agencies on the Donlin gold project. The project is on land owned by mineral estate owner Calista Corporation and surface estate owner The Kuskokwim Corporation. The US Army Corps of Engineers and Bureau of Land Management issued a joint Record of Decision for the project four months after the publication of the Final Environmental Impact Statement, marking the completion of the multi-year federal environmental review process through the National Environmental Policy Act. The Corps of Engineers issued a combined Clean Water Act Section 404 and Rivers and Harbors Act Section 10 permit while the US Bureau of Land Management issued the Offer to Lease for the right-of-way for those portions of the natural gas pipeline that would cross federal lands. The Alaska Pollutant Discharge Elimination System Wastewater Discharge permit was issued earlier in 2018. Other key state and federal permits and approvals are scheduled to be finalized in the near future, while the partners continue optimization work aimed at improving capital efficiencies. This new information will be needed to update the 2011 feasibility study. Total budgeted project costs for 2018 are $28 million. n Earlier in 2018 Northern Dynasty Minerals announced a sweeping series of new development considerations for its Pebble copper-molybdenum-gold project near Iliamna. The company also filed a technical report on the deposit with a revised resource estimate. At a 0.3% copper equivalent cut-off, the deposit contains 6.456 billion tonnes in the combined measured and indicated categories at a grade of 0.4% copper, 0.34 gpt gold, 240 ppm molybdenum, and 1.7 gpt silver, containing 57 billion pounds of copper, 71 million ounces of gold, 3.4 billion pounds of molybdenum, and 345 million ounces of silver. In addition, the deposit contains 4.454 billion tonnes in the inferred category at a grade of 0.25% copper, 0.25 gpt gold, 226 ppm molybdenum, and 1.2 gpt silver, containing 25 billion pounds of copper, 36 million ounces of gold, 2.2 billion pounds of molybdenum, and 170 million ounces of silver. Shortly after that, the com-
36 | November 2018
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Cook Inlet, a permanent, year-round port facility near the mouth of Amakdedori Creek on Cook Inlet, and a 188-mile natural gas pipeline from the Kenai Peninsula to the project site. The project will directly employ about 2,000 workers during its four-year construction phase and approximately 850 full-time workers during its twenty-year operations phase. n Riversgold announced an update on its 2018 exploration at its Luna/Quicksilver and Gemuk projects. The field efforts include geochemical sampling and induced polarization survey over the Luna and Luna East drill targets and drilling. At Luna, outcropping stockwork in sediments returned rock chip samples up to 64.7 gpt gold with associated arsenic, silver, antimony, and bismuth. At Luna East outcropping mineralization from rock chips returned up to 3.7 gpt gold, 90 gpt silver, and 1.2% copper. At Quicksilver a 1 kilometer long zone of outcropping veins within the North Fork Pluton returned rock chip values up to 37.6 gpt gold with associated arsenic, silver, antimony, and bismuth. At Kisa (Golden Dyke) a 4 kilometer swarm of felsic dykes within sediments returned rock chips grading 0.5 to 8.0 gpt gold with associated arsenic,
silver, antimony, and bismuth. At Gemuk historic sampling returned gold values ranging from 91 to 100 gpt gold associated with anomalous silver and arsenic and revealed high-grade antimony in quartz-stibnite veins at the contact between a biotite diorite and hornfelsed quartzite and shale. n CopperBank Resources Corporation announced updates on its Pyramid and San Diego Bay projects, both on lands leased from underlying land owner Aleut Corporation. Earlier in the year the company announced an updated resource at the Pyramid project. Utilizing 10,600 meters of drilling (including the 3,660 meters drilled during 2017) and using a 0.2% copper cutoff grade, the deposit now has inferred resources of 153.4 million tonnes grading 0.37% copper, 0.02% molybdenum, and 0.09 gpt gold. More recently the company released a technical report on its San Diego Bay copper project that recommends trenching, mapping, and geochemical sampling over areas marked by widespread hydrothermal activity. A magnetic survey over the entire property is also being considered. The project hosts a 17 squarekilometer area of strong hydrothermal alteration and intrusive rocks, consistent
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MINING SPECIAL SECTION | OVERVIEW
pany announced that the US Army Corps of Engineers accepted the project’s permit application, commencing the permitting process under the National Environmental Policy Act. The permit application entails a significantly smaller mine plan and numerous environmental safeguards including the consolidation of most major site infrastructure in a single drainage, the North Fork Koktuli, the absence of any primary mine operations in the Upper Talarik drainage, a fully lined tailings storage facility, no permanent waste rock piles, and no cyanide use. The mine plan calls for four years of construction activity followed by a twenty-year mine life. The mining rate will average 90 million tons per year, with milling of 58 million tons per year (160,000 tons per day). Life of mine stripping ratio is an extremely low 0.1 to 1. Mineralized material will be processed via conventional froth flotation. On average, the mine would produce 287 million pounds of copper, 321,000 ounces of gold, 1.6 million ounces of silver, and 13 million pounds of molybdenum per year. Mine infrastructure includes a 230 megawatt power plant located on-site, an 83-mile transportation corridor from the mine site to a port site on the west side of
MINING SPECIAL SECTION | OVERVIEW
with an alteration halo over a porphyry system. All porphyry alteration facies have been described, including zones of potassic, advanced argillic, and phyllic zones. Satellite images have identified widespread zones of high-temperature clay alteration. Strongly anomalous precious and base metal values were collected by previous operators in several areas of the prospect. n Ending months of speculation via the Tundra Telegraph, Constantine Metal Resources signed a Letter Agreement with Cook Inlet Region, Inc. on the 20,942 acre Johnson Tract property located on the west side of Cook Inlet. The Johnson Tract drill discovery made by Anaconda in 1982 reported 102.6 meters grading 10.94 gpt gold, 8.01% zinc, 0.75% copper, 2.13% lead, and 8.5 gpt silver, including 50 meters grading 20 gpt gold, 9.4% zinc, 1% copper, 2.8% lead, and 12.7 gpt silver. The Johnson Tract deposit is a syngenetic gold and base metal-rich quartz vein stockwork hosted in Jurassic-aged volcaniclastic rocks. Past drilling includes 26,840 meters in 88 drill holes. The property was returned to CIRI in the 1990s and has seen no new work in over twenty years. There are at least nine other prospect areas over about a
38 | November 2018
12-kilometer strike southeast and north of the Johnson Tract deposit, most of which have seen little or no drilling.
Interior Alaska n Kinross Gold announced year-end 2017 and first-half 2018 results from its Fort Knox mine. During 2017 the mine produced 381,115 ounces of gold at a cost of $628 per ounce versus 409,844 ounces of gold at a cost of $741 per ounce in 2016. Average mill grade for the year ranged from 0.75 to 0.96 gpt gold. Mill recoveries ranged from 81% to 85%. Average heap leach grades for 2017 ranged from 0.23 to 0.26 gpt gold. In late January 2018 the mine reported production from the heap leach had passed 1 million ounces since the facility came online in 2009, averaging about 125,000 ounces of gold per year. During first quarter 2018 the mine produced 79,928 ounces of gold at a cash cost of $530 per ounce versus 93,038 ounces at a cash cost of $617 per ounce in the year-previous period. The mineâ€™s production decrease was due to lower mill grades over the year-previous period and the seasonally slower heap leach recovery experienced during colder winter months. The mill treated 3,110,000
tonnes of ore grading 0.7 gpt gold with a mill recovery of 82%. The heap leach saw additions of 5,839,000 tonnes of ore grading 0.2 gpt gold. During the second quarter of 2018 the mine produced 71,463 ounces of gold at a cost of $969 per ounce in the second quarter versus 91,848 ounces of gold at a cost of $635 per ounce in the year-previous period. Production decreased compared to the second quarter of 2017 largely due to a decrease in ore grades. The mill treated 3,106,000 tonnes of ore grading 0.44 gpt gold with a mill recovery of 80%. The heap leach saw additions of 4,279,000 tonnes of ore grading 0.18 gpt gold. n Kinross Gold also announced that it will proceed with a multi-phase layback of the Fort Knox pit and the construction of a new heap leach pad to access resources in the Gilmore land package it recently acquired on the west end of its existing open pit. The expansion is expected to extend mining at Fort Knox by six years to 2027 and leaching to 2030, at an initial capital cost of approximately $100 million, increasing life-of-mine production by 1.5 million gold-equivalent ounces. Estimate internal rate of return (IRR) is 17%
n In late August Australia-based Alaska newcomer Northern Star Resources announced that it acquired the Pogo mine from Sumitomo Metal Mining Co. (85% interest and the mine operator) and Sumitomo Corporation (15% interest)
for $260 million. This purchase equates to approximately $63 per ounces of resource. The mineâ€™s 8 million oz gold endowment had contributed 3.8 million ounces of gold since 2006 at an average mine grade of 13.6 gpt. In 2017 the mine produced 271,273 ounces of gold at allin sustaining cost of $882 per ounce at a head grade average of 10.8 gpt. At yearend 2017, Pogo had resources of 3.34 million ounces at 12.3 gpt and reserves of 760,000 ounces at 11.9 gpt. Northern Star indicated that it intends to invest in targeted intensive drilling programs to extend mine life through resource growth and reserve conversion. Sumitomo previously announced a 2018 exploration budget of $21 million. This would include exploration at newly discovered mineralization at the Fun zone and the Goodpaster zone, just northwest of current underground mining operations. The high-angle Fun zone has returned intercepts up to 10 opt gold, while drilling in the Goodpaster zone returned 22.8 feet grading 0.103 opt gold and 17.5 feet grading 1.739 opt gold, the latter in an orthogneiss host rock with mineralogy and gold:bismuth ratios identical to the paragneiss-hosted Liese veins to the southeast. CSAMT geophysical re-
sults suggest the Goodpaster zone may be up to 5,000 meters long and may be the fault offset of the Liese zone. Welcome to Alaska, Northern Star Resources. n Endurance Gold Corporation commenced a 2018 summer exploration program on its Elephant Mountain project. For 2018 the company plans trenching, geological mapping, and additional rock and soil sampling on several targets located on the Trout and Wolverine prospects. Within a 1 kilometer long, +100 part per billion gold in soil anomaly at Trout, soil sampling has defined a continuous area of oxidized intrusive-hosted shear zone in which gold in soil values exceed 200 ppb gold over 175 meters of strike and 25 to 50 meters width. In addition, work will be completed in 2018 at Wolverine to expand and define the extent of visible gold bearing quartz vein stockwork. Follow-up rock samples on South Fork prospect returned gold values including 10.35 ppm gold with up to 1.28% lead. n International Tower Hill Mines reported first quarter results from its Livengood gold project. The company announced a 2018 budget of $5.1 million. The work
November 2018 | 39
MINING SPECIAL SECTION | OVERVIEW
with a net present value (NPV) of $130 million based on a $1,200/oz gold price and an IRR of 26% and NPV of $239 million based on a $1,300/oz gold price. Life of mine stripping ratio is 1.2:1 and average grade of the new resources is 0.35 gpt gold. All-in sustaining cost of production is estimated at $950 per ounce. Construction of a new heap leach site and dewatering will commence in the third quarter of 2018 with stripping starting in 2019 and initial production starting in 2020. Current plans call for conversion of operations to heap leaching only with milling expected to end in 2020. With the Gilmore block resources added to existing resources, the mine carries 3,374,000 ounces of proven and probable gold reserves at a grade of 0.37 gpt gold, 1,795,000 ounces of measured and indicated gold resources at a grade of 0.38 gpt gold, and 1,093,000 ounces of inferred gold resources at a grade of 0.32 gpt gold.
MINING SPECIAL SECTION | OVERVIEW
program incorporated in this budget will continue metallurgical studies undertaken in 2017 to define and refine the project flowsheet. Using the improved mineralization and alteration models now available for the deposit, 4,000 kilograms of metallurgical composites have been selected and a portion will be processed in 2018 to determine whether different recovery or cost parameters should be applied to different portions of the orebody. n Freegold Ventures began a 2018 drilling program at its Shorty Creek porphyry
copper-gold project. Significant 2017 drill results at Hill 1835 prospect include 360 meters grading 0.24% copper in hole 1701, 339 meters grading 0.3% copper in hole 17-02, 105.2 meters grading 0.27% copper in hole 17-03, and 165 meters grading 0.29% copper in hole 17-05A. Porphyry style mineralization is associated with potassic and pervasive sericite alteration within hornfelsed sedimentary rocks that are cut by porphyritic dykes and sills. The copper mineralization is primarily chalcopyrite with subordinate bornite which also contains anomalous gold, silver, cobalt, and tungsten.
n Contango ORE announced that Peak Gold, the companyâ€™s joint venture with Royal Alaska, a wholly-owned subsidiary of Royal Gold, approved a Phase 1 budget of approximately $9.1 million for the Peak gold-silver-copper project. The budget includes a Preliminary Economic Assessment, exploration for a third skarn orebody in close proximity to the Main Peak and North Peak orebodies, and acquisition of data to evaluate the potential for porphyry and/or epithermal mineralization elsewhere on the project. Included in the budget is 6,900 meters of exploration drilling and 74 line kilometers of induced polarization and Titan geophysical surveys. The exploration for new skarn mineralization will be conducted on four separate nearresource targets. Exploration for porphyry type deposits will be conducted in three prospect areas that have not been explored to date. The company also announced that a stream sediment sampling program was completed in late 2017 on its Noah block, west of the main resource area. The sampling identified three areas with anomalous gold or gold/copper mineralization where follow-up work is warranted.
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n Usibelli Coal Mine held a 75th anniversary open house at its coal mining operations near Healy. The mine shipped its first 10,000 tons of coal to the US Army in Fairbanks in 1943 and since then has shipped coal to numerous power plants in Alaska and internationally. In 1971, six years before it was required by federal law, the mine pioneered a successful reclamation program including the now-standard process of recontouring and reseeding disturbed areas with a mixture of grasses and plants indigenous to the northern regions. Since 1971, more than 5,500 acres of land have been reclaimed. Last year, the mine reclamation team planted more than 25,000 trees and seeded 138 acres for final reclamation. The mine recently completed a haul road to access a new mining area known as the Jumbo Dome Mine. This new road provides access to 83 million tons of permitted coal with a 100-plus year mine life at current production levels. n White Rock Minerals announced drill results from its Red Mountain volcanogenic massive sulfide deposit in the eastern Bonnifield District. Significant results include 3.5 meters grading 15.1% zinc, 6.7% lead, 518 gpt silver, 2.1 gpt gold and
n PolarX announced late 2017 and 2018 drilling results at the Zackly prospect on its Alaska Range project. Late 2017 drilling results included 18.44 meters grading 1.3% copper and 1.2 gpt gold from 169.5 m in ZM-17010, 5.85 meters grading 1.2% copper and 2.2 gpt gold from 88.8 m in ZM-17015, 33.43 meters grading 1.2% copper and 1.3 gpt gold from 98.27 m in ZM-17002, and 20.43 meters grading 2.1% copper and 1.7 gpt gold from 28.96 m in ZM-17007. The 2018 drilling program has included expansion drilling along strike and down dip below the current resource. Results include hole ZX-18020, some 850 meters east of the current resource base, which intersected 54.6 meters grading 0.6% copper, and 2.8 gpt gold starting at 2.5 meters depth and 9.3 m grading 3.3% copper, 2.3 gpt gold, and 19.7 gpt silver in hole ZX-18023. Mineralization is hosted in garnet skarn above a fault which brings the mineralized skarn into contact with intrusive diorite. The company also has undertaken a 50-meter line-spacing airborne magnetics program over the entire northern part of the property, completed www.akbizmag.com
a detailed soil sampling and geological mapping on a 200 by 150 meter grid over the Mars target, and conducted mapping and rock-chip sampling at the Moonwalk Tintina-style gold prospect. The inferred resource for the Zackly deposit is 3.4 million tonnes grading 1.2% copper, 2.0 gpt gold, and 14 gpt silver (41,200 tonnes of copper, 213,000 ounces of gold, and 1.5 million ounces of silver). n Alaska newcomer New Age Metals announced a lease-purchase option with a private Alaska corporation Anglo Alaska Gold to acquire the Genesis platinum
group metal prospect north of Valdez. The drill ready reef style target has not been drilled, but surface samples returned 2.4 grams of palladium per tonne, 2.4 grams of platinum per tonne, 0.96% nickel, and 0.58% copper. The mineralized reef has been identified in outcrop for 850 meters along strike over a 40-meter true thickness and remains open to the east, west, north, and at depth. A separate style of chromite-bearing mineralization on the project contains up to 2.5 grams of palladium per tonne and 2.8 grams of platinum per tonne. Known platinum group metal mineralization covers a distance of 9
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MINING SPECIAL SECTION | OVERVIEW
0.2% copper in West Tundra hole WT1828, approximately 75 meters from the nearest drilling. At the Dry Creek prospect significant intercepts included 8.9 meters grading 6.5% zinc, 2.7% lead, 124 gpt silver, 0.7 gpt gold, and 0.2% copper in hole DC18-76; 4.7 meters grading 19.5% zinc, 7.8% lead, 466 gpt silver, 6.9 gpt gold, and 1.5% copper in hole DC18-79 in the Discovery lens; and 4.3 meters grading 4.8% zinc, 2.3% lead, 1,435 gpt silver, 2.2 gpt gold, and 0.5% copper in hole DC1877 in the Fosters lens. The combined resource at the Dry Creek and West Tundra Flats deposits includes 16.7 million tonnes grading 4.1% zinc, 1.7% lead, 0.2% copper, 99 gpt silver, and 0.7 gpt gold including a high-grade component of 9.1 million tonnes at 5.8% zinc, 2.6% lead, 0.1% copper, 157 gpt silver, and 0.9 gpt gold. The company also noted that seven new prospects, including Hunter, Dry Creek South, Dry Creek East, West Tundra, Ram, Megan’s Draw, and South Platypus, were identified by ground and airborne geophysics, mapping, and geochemical sampling. Initial drilling results from Hunter include 1.4 meters grading 17.4% zinc, 3.9% lead, 90 gpt silver, and 1.6% coper in hole HR18-01 and 1.8 meters grading 13.8% zinc, 3.1% lead, 56 gpt silver, and 0.9% copper in hole HR18-02.
MINING SPECIAL SECTION | OVERVIEW
kilometers across the prospect. Welcome to Alaska, New Age Metals. n Nova Minerals (formerly Quantum Resources) commenced an 8,000meter drilling program at its Estelle gold project. The reverse circulation drill program planned at the Oxide prospect will focus on the strong geophysical anomaly vectoring off drill hole SE12-04, which returned 41.5 meters grading 1.1 gpt gold. Drilling in this hole was approaching a strong geophysical anomaly further southeast which will be tested as the potential center of the intrusion-related gold mineralized system.
Northern Alaska n Trilogy Metals and funding partner South32 announced year-end 2017 drilling results and 2018 year-to-date results at the Bornite deposit at its Upper Kobuk Mineral project, a business relationship owned and controlled by Trilogy and NANA. The 2017 exploration program included a total of nine drill holes comprising 8,437 meters. This effort doubled the size of the mineralized footprint which now measures 1,500 meters by 2,500 meters over a 50-meter thick zone averaging at least 1% copper.
Results suggest northeast and northwest-oriented controls on higher grade copper mineralization. Initial drilling from 2018 exploration includes 16.4 meters grading 5.34% copper and 0.21% cobalt in hole RC18-0247 in the South Reef trend. The company also announced that metallurgical work from late 2017 demonstrates that a high quality, 30% copper concentrate containing no deleterious metals can be produced. In addition, as part of its $10 million 2018 budget, the company tabled its resource estimate for cobalt. At a base case 0.50% copper cut-off grade, the deposit is estimated to contain in-pit inferred resources of 124.6 million tonnes grading 0.017% cobalt for 45 million pounds of contained cobalt. Below the resource pit shell, at a base case cut-off grade of 1.5% copper, the deposit is estimated to contain additional inferred resources of 57.8 million tonnes grading 0.025% cobalt for 32 million pounds of contained cobalt. This brings total inferred resources to 182.4 million tonnes grading 0.019% cobalt for 77 million pounds of contained cobalt. Results from metallurgical studies indicate that cobalt occurs predominantly as cobaltiferous pyrite which preferentially reports to the copper tailings.
n Trilogy Metals announced final 2017 results and year-to-date 2018 results for its Arctic copper-zinc-lead-silver-gold project on the Upper Kobuk Mineral project, a business relationship owned and controlled by Trilogy and NANA. Under an Option Agreement between Trilogy Metals and affiliates of South32, South32 has the right to form a 50/50 Joint Venture with respect to Trilogyâ€™s Alaska assets including the Arctic deposit. The 2017 field program included 785.2 meters of diamond drilling to collect representative sample material to conduct bulk ore sorting studies for the Arctic deposit. An additional 273.8 meters of sonic drilling was completed to collect geotechnical, hydrological, geothermal, and hydrogeological information for the tailings management facilities and waste rock dump for the project in support of the pre-feasibility study (PFS) released in early 2018. Proven plus probable mineral reserves used in the PFS are 43,038,000 tonnes grading 2.32% copper, 3.24% zinc, 0.57% lead, 0.49 gpt gold, and 36 gpt silver. Highlights of the PFS include a pre-tax NPV, calculated at 8% discount rate, of $1,935.2 million calculated at the beginning of the three-year construction period and an IRR of 38% for the base case.
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years estimated in the PEA. Other cost improvements include use of liquid natural gas versus diesel to generate the average 12.6 megawatts of power needed, reducing power generation costs and saving approximately $2/tonne in operating costs on processing, improved metallurgical recoveries, and an almost 20% increase in resource tonnes, along with an improvement in grade resulting from in-fill drilling programs conducted over the past few years. The company later approved a $6.7 million 2018 budget to advance the project towards feasibility and permitting. n Alaska newcomer Valhalla Metals announced the completion of a Canadian National Instrument 43-101 compliant mineral resource estimate for its 100%-owned Sun polymetallic volcanogenic massive sulfide deposit in the Ambler Mining District. Using a $75 per tonne cutoff value, indicated resource are 1.71 million tonnes grading 4.32% zinc, 1.48% copper, 1.11% lead, 60.0 gpt silver, and 0.21 gpt gold, and inferred resources are 9.02 million tonnes grading 4.18% zinc, 1.21% copper, 1.46% lead, 81.7 gpt silver, and 0.25 gpt gold for a combined total of 10.73 million tonnes of 10.97% zinc-equivalent. The company
owns a 100% interest in the claims and all historical technical on the deposit and adjacent lands. Significant mineralization has been intersected on the property over a strike length of almost 3.5 kilometers, from the southernmost drill hole at the SW deposit northeast to the Picnic Creek prospect. The Main and SW deposits are comprised of multiple individual lenses that are spatially related. Three primary horizons of massive-sulfide mineralization have been identified at the Main deposit and two at the SW deposit. Mineralization is comprised primarily of sphalerite, tetrahedrite-tennantite, galena, chalcopyrite, bornite, pyrite, pyrrhotite, and arsenopyrite. Welcome to Alaska, Valhalla Metals. n Goldrich Mining Company announced 2017 and interim 2018 production figures from its Chandalar placer gold mine in the Brooks Range. The Chandalar mine is owned by Goldrich NyacAU Placer (GNP), a 50/50 joint venture between Goldrich and NyacAU. The mine production for 2017 was 14,670 ounces of raw placer gold, which is approximately equivalent to 12,000 ounces of fine gold. The 2017 production season ran from approximately June 4 through September 27. In addition,
November 2018 | 43
MINING SPECIAL SECTION | OVERVIEW
The after-tax NPV was $1,412.7 million and after-tax IRR was 33.4% for the base case. At $2 per pound copper price, after-tax payback is three years. The PFS estimates approximately 400 year round jobs during mine operations. Initial capital costs were estimated at $779.6 million and sustaining capital of $65.9 million for total estimated capital expenditures of $845.5 million over the estimated twelve-year mine life. In addition, closure and reclamation costs are estimated at $65.3 million. A minimum mine life of twelve years supports a maximum 10,000 tonne-per-day conventional grinding mill and flotation circuit to produce copper, zinc, and lead concentrates containing significant gold and silver by-products with a life-of-mine strip ratio of 6.9 to 1. Total â€œall-inâ€? cash costs (initial/ sustaining capital, operating, transportation, treatment and refining charges, road toll, and by-product metal credits) are estimated at $0.63 per pound of payable copper. Improvements in the NPV and IRR of the project over the 2013 preliminary economic analysis (PEA) include an improved mine plan that moves approximately $100 million in the pre-stripping costs forward which allows for a more aggressive mine ramp up over two years rather than four
MINING SPECIAL SECTION | OVERVIEW
stripping of overburden and stockpiling of pay gravel was completed in mid-October. The partners also completed 231 sonic drill holes totaling 14,271 feet in 2017. A total of 15,000 feet of previously conducted reverse circulation drilling delineated approximately 10.5 million cubic yards of mineralized material at an average grade of 0.025 ounces (0.78 grams) gold per cubic yard containing an estimated 250,000 ounces of gold. For 2018 the total mine production from season restart on May 31 through the end of July was 10,557 ounces of raw placer gold, equivalent to approximately 8,657 ounces of fine gold. The company indicated that normal operating season is June through midSeptember. The company indicated that anticipated production figures for 2018 will not allow GNP to meet year-end gold deliveries to Goldrich, at which point GNP will be dissolved and mining operations by GNP will cease. The parties have entered arbitration in an attempt to resolve differences.
Southeast Alaska n Hecla Mining Company announced year-end 2017 production and resources and first-half 2018 production and exploration results at its Greens Creek mine.
The total cash cost per ounce of silver produced for 2017 was $0.71 per ounce versus $3.84 per ounce in 2016. The average grade of ore mined during the year was 12.88 opt silver, down from the average grade of 14.55 opt in the year previous. For the year the mine produced 8,351,882 ounces of silver, 50,854 ounces of gold, 17,996 tons of lead, and 52,547 tons of zinc. The mill operated at an average of 2,300 tons per day in 2017. Year-end reserves and resources included proven and probable reserves of 7,550,000 tons grading 11.9 opt silver, 0.10 opt gold, 3% lead, and 8.1% zinc. In addition the mine contains measured and indicated resources of 2,805,000 tons of indicated resources grading 11.2 opt silver, 0.09 opt gold, 2.9% lead, and 7.7% zinc. The mine also reported inferred resources of 2,708,000 tons grading 12.1 opt silver, 0.08 opt gold, 2.7% lead, and 6.9% zinc. For the first half of 2018 the mine produced 3,913,023 ounces of silver and 26,873 ounces of gold, both slight increases over 2017 first-half production levels. The mine also produced 10,326 tons of lead and 28,978 tons of zinc. Average grades mined include 12.08 opt silver, 0.097 opt gold, 3.06% lead, and 7.95% zinc. The mill operated at an average of 2,307
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tons per day in the first half of 2018. Cash cost of production was negative $4.22 per ounce of silver compared to $1.26 per ounce in the year previous period. n Coeur Mining reported year-end 2017 production and resources and first-half 2018 production and exploration results at its Kensington mine. For 2017, production was 115,094 ounces of gold, a significant decrease over the 124,331 ounces of gold produced in the year previous period. The mine processed 668,727 tons of ore grading 0.18 opt gold. Average recovery was 93.5%. Average cash costs for the year were $920 per ounce. Year-end 2017 reserves and resources include proven and probable reserves of 620,700 ounces contained in 2,961,000 tons grading 0.21 opt gold; measured and indicated resources of 712,600 ounces contained in 2,743,800 tons grading 0.26 opt gold; and inferred resources of 304,800 ounces contained in 1,387,800 tons grading 0.22 opt gold. During first-quarter 2018 the mill processed 168,751 tons of ore, a slight increase over the 158,706 tons of ore produced in the year previous period. During the first quarter of 2018 the mine
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produced 26,064 ounces of gold grading 0.17 opt gold with an average recovery of 94%. During the second quarter of 2018 the mine produced 25,570 ounces of gold grading 0.16 opt gold with an average recovery of 92.6%. Average production costs were $1,010 per ounce in quarter one and $1,195 per ounce in quarter two. These lower production figures were anticipated due to mine sequencing. The company also indicated that development work and dewatering of the high-grade Jualin deposit is progressing with production increases expected in the second half of 2018. Jualin resources stood at 74,100 ounces of gold contained in 157,600 tons grading 0.47 opt gold (16.1 gpt gold). The company indicated that it expects fullyear 2018 production from the mine at 115,000 to 120,000 ounces of gold. n Constantine Metal Resources and joint venture partner Dowa Metals & Mining Company announced additional drill results and initial results from metallurgical work at its Palmer volcanogenic massive sulfide deposit. Significant drilling results from the South Wall zone include 15.5 meters grading 1.6% copper, 4.8% zinc,
25 g/t silver, and 0.1 g/t gold in a 50meter step-out. This interval includes 4.1 meters at 15.9% zinc and 6.1 meters at 3.6% copper. The results expand the zone to the west and confirm continuity of grade and width to the west and down-plunge toward the deeper South Wall EM zone. At the AG zone significant intercepts include 4.8 meters grading 436 gpt silver, 1.3 gpt gold, 3.6% zinc, and 1.6% lead and an additional 12.5 meters grading 217 gpt silver, 1.8 gpt gold, 5.2% zinc, 0.7% lead in hole CMR18-109; 43.3 meters grading 143 gpt silver, 0.5 gpt gold, 6.5% zinc, and 2.5% lead including 28.8 meters grading 141 gpt silver, 0.5 gpt gold, 9.0% zinc, and 3.5% lead in hole CMR18-110; and 21.1 meters grading 0.5 g/t gold, 92 g/t silver, 1% zinc, 0.4% lead, and 55% barium sulfate in a 90-meter step-out to the southeast, doubling the known strike of the AG zone to 450 meters. Mineralization remains open to expansion. Inferred mineral resources at the project currently stand at 8.1 million tonnes grading 1.41% copper, 5.25% zinc, 0.32 gpt gold, and 31.7 gpt silver. On the metallurgical front, initial tests confirmed that a high-quality barite concentrate can be produced as a co-product of copperzinc-gold-silver recovery. Results indicate
barite recovery of 91.1% to a clean, highgrade barite concentrate with a high specific gravity of 4.44. In August the partners commissioned a preliminary economic assessment (the first such study for the project) upon completion of the updated mineral resource estimate. n Following encouraging drilling results from late 2017, Grande Portage Resources announced an updated resource estimate for its Herbert gold project near Juneau. The resource estimate is based on 143 drill hole totaling 22,090 meters of drilling. The new resource contains indicated resources of 1,107,000 tonnes containing 257,950 ounces of gold at 7.25 gpt gold and an inferred resource of 423,200 tonnes containing 82,200 ounces of gold at 6.04 gpt gold, both at a 2.5 gpt gold cut-off. The system is open to length and depth and is host to at least six main composite vein-fault structures that contain ribbon structure quartz sulfide veins. Plans for 2018 include drilling of 18 to 20 holes to test up to four separate major veins, with emphasis on expansion of the Goat and Deep Trench veins.
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MINING SPECIAL SECTION | FORT KNOX
Gilmore Expansion at Fort Knox ‘We’re not standing still’ By Julie Stricker
ne of the highlights of a visit to the Fort Knox gold mine is posing at the end of the tour with a gold bar produced at the mine. The value of the bar, which weighs 257.1 troy ounces, has fluctuated over the years with the price of gold: $98,000 in September 2003; $484,170 in September 2011; $307,372 in September 2018. Holding an object in your hand that’s worth more than your house leaves an indelible impression. But a couple of years ago it was looking like the gold bar, the mine, and the millions of dollars it brings to the Fairbanks economy were coming to an end. Fort Knox was running out of gold. But even while the mine’s operators were publicly planning to shut down mill operations in 2017 and ready the heapleach facility to accept its final loads of ore in 2020, they continued to look at additional prospects in the area, including drilling 205 holes at Gilmore, adjacent to the western edge of the existing pit. Those efforts, which started in 2014, paid off. In June, Kinross President and CEO J. Paul Rollinson announced plans for a $100 million Gilmore expansion that would keep the mine open until 2030. “We are pleased to proceed with the initial Fort Knox Gilmore project, a lowrisk, low-cost brownfield expansion that is expected to extend mine life to 2030 at one of our top performing operations and contribute 1.5 million gold equivalent ounces to strengthen our long-term US 48 | November 2018
Kinross CEO J. Paul Rollinson, left, Kinross Chief Operating Officer Lauren Roberts, and Alaska Governor Bill Walker talk before the groundbreaking ceremony for the Gilmore expansion at Fort Knox. Fairbanks Gold Mining Inc.
production profile,” Rollinson states. The mine, located twenty-five miles northeast of Fairbanks, began commercial operations in 1996 amid reports the site held 4 million ounces of proven and probable reserves over an expected mine life of eight to ten years. A combination of highefficiency mining methods, new technology, and new ore discoveries added years and millions of ounces of gold to the original estimates. By the time Fort Knox (owned by Toronto-based Kinross Gold Corporation) celebrated its twentieth anniversary in 2016, it had more than doubled its original estimated lifespan and produced more than 6 million ounces of gold. The Gilmore expansion comprises 709 acres on the existing mine’s western border. But while Kinross had the mineral rights to the land, it couldn’t act on them until the land was transferred from federal to state ownership. That process, which required cooperation between Kinross, the Alaska Department of Natural Resources, the US National Oceanic and Atmospheric Administration, the US Department of Interior, the Bureau of Land Management, and Alaska’s congressional delegation, was completed late in 2017. “Plain and simple, this is a great day for Fairbanks,” Alaska Governor Bill Walker said in a statement about the expansion. “Because of this new investment by Kinross Gold, Interior Alaska will enjoy another decade of high-paying jobs at the mine and an influx of revenue that supports schools, roads, and public safety.” Fort Knox is the largest taxpayer in the
Fairbanks North Star Borough. It employs 630 workers, plus another couple hundred contractors, depending on the season.
The Groundbreaking The official groundbreaking ceremony was held on a chilly, overcast August morning, with fog so thick the mine’s 1,860-foot-deep pit and fleet of oversized vehicles couldn’t be seen from the mine’s edge. A heated tent was set up for the ceremony, which was attended by dignitaries including Rollinson, Walker, Congressman Don Young, and other state and federal officials. A row of ceremonial gold shovels was lined up next to a long box of dirt in front of the standing-room-only crowd. Part of Fort Knox’s success is due to its exceptional safety record, says David Zatezalo, assistant secretary of labor for the Mine Safety and Health Administration. Zatezalo notes there have been “zero reportable injuries this year” at Fort Knox and the mine has gone years at a time without worker injuries during the past twenty years. “Safety and profitability go hand-inhand,” Zatezalo says, noting the mining industry in Alaska is one of the safest in his jurisdiction. The mine’s safety motto is “See it. Own it. Solve It.” A motto that empowers workers to act on and resolve safety issues before they become a problem. Fort Knox’s safety training program serves as a model for other mines, Zatezalo says. “This mine and this state have a good record of compliance.”
MINING SPECIAL SECTION | FORT KNOX
A general outline of the facilities at Fort Knox. Fairbanks Gold Mining Inc.
“Because of this new investment by Kinross Gold, Interior Alaska will enjoy another decade of high-paying jobs at the mine and an influx of revenue that supports schools, roads, and public safety.” —Governor Bill Walker
Safety is stressed from the moment a person steps foot on the mine. All visitors and workers must wear safety gear, and a safety briefing is the first order of business. The giant trucks, loaders, and shovels are closely monitored and move between the pit, the mill, and the heap leach in a complex industrial choreography. Walker says he first toured the mine a couple of years ago and was amazed at the scale of operations. “I come from a construction background,” he says. “I saw some equipment I could only dream about as far as size. It’s so big that all of the equipment I’ve ever run could probably fit in the bucket of that shovel.” Fort Knox is an important economic engine for the Fairbanks North Star Borough, Walker says. All of its approximately 630 workers live in the area, Walker says. He said he has a habit of asking workers at facilities around the state where they live. “Here at Fort Knox, I always ask the same question,” he says. “Where are you from? Here, I got the most interesting answers. They would sometimes point at lights over from here and say, ‘See that light over there, that’s my house.’ “I have a passion for local hire,” he continues. “When we develop our resources for the maximum benefit of Alaska, it means jobs. It means careers. It means family.” When Walker first toured the mine, he also got to hold the bar of gold. “It was something that was very special to me. It was something that was made here in Alaska.” The governor says one of the questions he asked when he first toured Fort Knox was: “What is your determination of how long you will be running?” The answer? The cost of energy. 50 | November 2018
It was long thought that a heap-leach to recover gold would not work in Interior Alaskaâ€™s
Committed tobutCommunity subarctic winters, Fort Knox changed that. The places where we work are also where we live. Thatâ€™s why Teck employees are focused on making the right choices for the environment, for communities and for future generations. Learn more about our commitment at www.teck.com/responsibility
MINING SPECIAL SECTION | FORT KNOX
Walker says his ongoing efforts to get a natural gas line built from the North Slope to Southcentral Alaska would benefit the mine greatly by cutting its energy costs in half. The mine uses between 32 and 35 megawatts of power, supplied by Golden Valley Electric Association. In 2016, Fort Knox’s electric bill was $41.7 million, according to a report prepared for the Alaska Mining Association, so cutting costs and improving efficiency has been a hallmark of Fort Knox operations. While Fort Knox contains millions of ounces of gold reserves, much of the gold is microscopic. Mine managers’ attention
to the smallest details—such as improving the life of equipment and tires, efficiency in the pit and processing schedules, and upgrades in technology—have given Fort Knox a reputation for quality and efficiency.
Fort Knox History Mining in the area dates back to the original discovery of gold in a nearby then-unnamed creek by prospector Felix Pedro in 1902. Although the area around today’s Fort Knox has been mined extensively—decades-old drift mines were still extant nearby when the mine opened— claims on the mine site itself were Joe Usibelli Jr. and his daughter Lexi with Emil’s original TD-40 bulldozer, 2010.
and his son
TENACITY Emil Usibelli, the founder of Usibelli
Much has changed over the
Coal Mine, arrived in Alaska penniless
decades, but the pioneering spirit of
during the throes of the Great
Emil Usibelli still guides the company
Depression. Yet in less than a decade
today. We look forward to producing
he had started a mine that was
affordable energy, while protecting
destined to become one of Alaska’s
the quality of environment, for many
oldest and most successful businesses.
decades to come.
WWW.USIBELLI.COM 52 | November 2018
dormant and visible gold wasn’t discovered at Fort Knox until the mid-1980s. AMAX mining acquired Fort Knox in 1992 and formed Fairbanks Gold Mining Incorporated to manage the project. Kinross acquired AMAX in 1998 and became the sole owner. The first gold pour was December 13, 1996, and commercial production began the next year. Production reached 1 million ounces in 1999 and the second million in 2002. In 2000, then-general manager Tom Irwin said: “At current gold prices, Fort Knox is supposed to be in operation another eight to ten years, although that could change if further discoveries are made or the market shifts.” Also in 2000, the price of gold was about $272 an ounce. In 2018, it’s hovering in the range of $1,270 an ounce. The expansion will add an estimated 1.5 million ounces to Fort Knox reserves. Overall production costs mine-wide are about $1,000 per ounce. Technology was another primary factor in extending the mine’s life. It was long thought that a heap-leach to recover gold would not work in Interior Alaska’s subarctic winters, but Fort Knox changed that. Engineers developed a process in which the stacked ore is sprayed with cyanide to dissolve the gold, which trickles into catchment areas. The gold is then separated from the leachate and the cyanide reused in a closed system. The Walter Creek heap leach facility went online in 2009, making it possible to recover grades of ore that weren’t economic to mill and extending the life of the mine further. Today, Fort Knox processes approximately 800 to 900 ounces of gold per day, says Anna Atchison, external affairs manager. About one-third of that comes from the heap leach.
The Expansion The Gilmore expansion includes another heap leach, Barnes Creek, on which most of the Gilmore ore will be processed. Early construction on the heap leach was planned for 2018, with initial production at Gilmore scheduled for 2020. Mill operations are currently scheduled to end in 2020. Joe Balash, assistant secretary for Land and Minerals Management at the Department of the Interior, says he has watched the mine grow up. “The roots here are deep and the community benefits are tremendous,”
MINING SPECIAL SECTION | FORT KNOX
he says, noting the extensive process that was required to transfer the Gilmore property. “Mining is an opportunity for us to get things right in our community and make it stronger.” Alaska’s sole congressman, Don Young, says the Gilmore expansion is “a great day for Alaska; a great day for an industry which made Alaska.” Making the most of Alaska’s abundant natural resources is good for Alaska and the nation, he says. Young says his goal is to develop Alaska’s energy resources in a way that adds value to its mineral resources. Young says he remembers the first blast in the mine pit, which now measures 1.2 miles across from east to west, 0.9 miles from north to south, and is 1,860 feet deep, with 30-foot terraces stepped from the bottom to top. The scale of the mine makes the massive 240-ton Caterpillar 793 ore trucks look like Tonka trucks moving steadily up and down the pit. What’s amazing, Young says, is what you don’t hear about Fort Knox. “You know how many people aren’t aware of this mine—and that’s a positive,” he says. “It means you’re doing things right. “But the people need to become aware of how much you contribute,” the twentythree-term congressman says. “It’s good for the state and it’s good for the nation. It’s good for a balanced economy.” Rollinson says the company is planning to invest $570 million in Fort Knox over the next several years. Kinross plans to fund the initial capital costs from the mine’s cash flow. “We can keep responsibly operating and doing what we’re doing,” Rollinson says. Over its lifespan, Fort Knox has been a consistent over-producer for Kinross, and former Fort Knox employees can be found around the world at Kinross’ other properties, he says. In 2017, Fort Knox paid more than $80 million in wages and benefits and spent $188 million for goods and services. It also has won numerous environmental awards, working closely with Alaska agencies to restore fish stocks in areas of historic mining. Fort Knox supports dozens of local agencies, as well as internship and training programs through the University of Alaska Fairbanks. Rollinson says Kinross is already looking beyond the first two phases of the Gilmore expansion. “We’re not standing still,” he says. “We’re going to keep looking. I believe this is the first phase of many expansions.”
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November 2018 | 53
MINING SPECIAL SECTION | DIRECTORY
The 2018 Alaska Business Mining Directory COMPANY TOP EXECUTIVE
YEAR FOUNDED / ESTABLISHED IN ALASKA
WORLDWIDE / ALASKA EMPLOYEES
MINING DISTRICT | COMMODITY | RECENT PROJECTS
Kirk Zerkel, Pres.
ak-gravel.com | Kirk.Zerkel@aicllc.com Recent Projects: Kensington Mine Stage 3 Dam Raise, Ft Knox WCHL BCHL MSA, Ft Greely Missile Field 4 Site Clearing/Grubbing, Mekoryuk Erosion Protection rip rap, Buckhorn Mine Reclamation. Mining District: Statewide Commodity: Pit run gravel type II–2” minus; crushed aggregate D-1 base; 2” minus gravel/sewer filter rock; concrete aggregate (3/4 minus); concrete sand; and Redi-mix concrete.
Curt Freeman, Owner/Pres.
avalonalaska.com | email@example.com Recent Projects: Peak, Golden Summit, Tibbs. Mining District: Multiple Commodity: Precious metals, base metals, platinum group metals, strategic metals.
Bering Shai Rock & Gravel PO Box 196 Unalaska, AK 99685 Phone: 907-581-1409
Diane Shaishnikoff, Owner/Mgr.
firstname.lastname@example.org Recent Projects: Products: Armor, rip-rap, gravel, several gradations, sold locally in Unalaska/Dutch Harbor. Barge ramp at quarry. Provide rock products for Turnagain Marine UMC Project. Clearing, civil, roads. Mining District: Aleutian Chain Commodity: Spec rock, rip rap, armor stone, gravel.
Clark Wiltz Mining PO Box 586 Talkeetna, AK 99676 Phone: 907-841-3213
Douglas Clark, Pres.
Recent Projects: Mining. Mining District: Mt. McKinley Recording Commodity: Gold.
Coeur Alaska 3031 Clinton Dr., Suite 202 Juneau, AK 99801 Phone: 907-523-3300
Mark Kiessling, GM
Donlin Gold 4720 Business Park Blvd., Suite G-25 Anchorage, AK 99503 Phone: 907-273-0200
Andy Cole, GM
Alaska Aggregate Products 809 S. Chugach St., #2 Palmer, AK 99645 Phone: 907-746-4505 Avalon Development Corp. PO Box 80268 Fairbanks, AK 99708 Phone: 907-457-5159
Recent Projects: The Kensington underground gold mine and associated milling facilities are located on the east side of the Lynn Canal about forty-five miles north-northwest of 2,000 Juneau. 389 Mining District: Juneau Commodity: Gold. 11 11
Recent Projects: Receipt of federal and state permits. Mining District: Aniak Commodity: Gold.
HEROES AT P O G O M I N E On the job and at home, Pogo Mine’s underground heroes make Alaska a better place. Trained to protect the environment and each other, they use their skills to serve as volunteer firefighters, community supporters and good Samaritans in our communities.
54 | November 2018
When it comes to Donlin Gold, we agree with our neighbors in the Yukon-Kuskokwim region. That the project should be developed not only safely and responsibly, but also in a way that provides tangible benefits to everyone â€“ both now and well into the future. And weâ€™re working together to do just that.
1.866.669.6227 | novagold.com
MININGSPECIAL SECTION | DIRECTORY
COMPANY TOP EXECUTIVE
YEAR FOUNDED / ESTABLISHED IN ALASKA
WORLDWIDE / ALASKA EMPLOYEES
MINING DISTRICT | COMMODITY | RECENT PROJECTS
Grant Lake Corporation 5223 E. 24th Ave., #14 Anchorage, AK 99508 Phone: 907-521-6480
Paul Torgerson, CEO/Pres.
grantlakecorporation.com | email@example.com Recent Projects: Case Lode Mine, Fire Brick Lode Mine, Kahiltna Placer Mines. Mining District: Yentna Mining District Commodity: Gold.
Graphite One Resources 600-777 Hornby St. Vancouver, BC V6Z 1S4 Phone: 604-697-2862
Anthony Huston, Pres./CEO
Recent Projects: Graphite Creek. Mining District: Cape Nome Commodity: Graphite.
Heatherdale Resources Ltd. 1040 West Georgia St. Vancouver, BC V6E 4H1 Phone: 604-684-6365
David Copeland, Exec. Chairman/CEO
Recent Projects: Niblack Project. Mining District: Alaska Commodity: Copper, gold, zinc, silver.
Hecla Greens Creek Mining Co. PO Box 32199 Juneau, AK 99803 Phone: 907-789-8100
Keith Malone, VP/GM
Hope Mining Co. PO Box 101827 Anchorage, AK 99510 Phone: 907-274-1906
Al Johnson, Pres.
Kinross Fort Knox PO Box 73726 Fairbanks, AK 99707 Phone: 907-490-2218
Jeremy Brans, VP/GM
NOVAGOLD 789 W. Pender St., Suite 720 Vancouver, BC V6C 1H2 Phone: 604-669-6227
Gregory Lang, Pres./CEO
novagold.com | firstname.lastname@example.org | @NovaGold | Recent Projects: Donlin Gold. Mining District: Kuskokwim Gold Belt Commodity: Gold, placer gold, precious and base metals.
Nyac Mining Co./Nyac Gold/NyacAu 1634 W. 13th Ave. Anchorage, AK 99501 Phone: 907-279-6094
Mike James, Pres.
Recent Projects: 1-placer mine at NYAC, AK; 2-placer mine at Little Squaw Creek. Mining District: Southwestern Alaska and Northern AK Commodity: Gold.
Recent Projects: Underground drilling for the remainder of 2018 is planned to focus on the East Ore, Upper Plate, Deep 200 South, and Gallagher zones. Mining District: Admiralty Mining District Commodity: Silver, zinc, lead, gold. Hopemlnlng.com | Hopeminingco.com Recent Projects: Leasing mining ground. Mining District: Seward Commodity: Placer gold, silver.
Recent Projects: Fort Knox has been safely producing gold since 1996. 9,500 Mining District: Fairbanks 630 Commodity: Gold. @NOVAGOLD
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MININGSPECIAL SECTION | DIRECTORY
COMPANY TOP EXECUTIVE
YEAR FOUNDED / ESTABLISHED IN ALASKA
WORLDWIDE / ALASKA EMPLOYEES
MINING DISTRICT | COMMODITY | RECENT PROJECTS
Gene Pool, CFO
oxfordmetals.com Recent Projects: Oxford Assaying & Refining is proud to be the only local assayer, refiner, silver and gold bullion dealer, and gold buyer of Alaska. We have maintained two locations in Alaska for more than thirty years. Mining District: Alaska Commodity: Gold, silver.
Tom Collier, CEO
pebblepartnership.com Recent Projects: Initiated federal NEPA permitting; summer environmental and exploration work. Mining District: Southwest Alaska - Iliamna Commodity: Copper, molybdenum, gold, silver.
Chris Kennedy, GM
pogominealaska.com Recent Projects: Pogo Mine has invested $21 million in exploration and definition drilling in an effort to extend the life of mine. Results of the exploration efforts are expected near the end of the 4th quarter. Mining District: Goodpaster Commodity: Gold.
Les Yesnik, GM
teck.com | facebook.com/TeckResourcesLtd | linkedin.com/company/teck-resources-limited Recent Projects: State Lands Exploration Project. Mining District: Noatak Commodity: Base metals, lead, zinc.
Tower Hill Mines 506 Gaffney Rd., Suite 200 Fairbanks, AK 99701 Phone: 907-328-2800
Karl Hanneman, CEO
Recent Projects: Improved Project in 2017 Pre-Feasibility Study (April 10, 2017 NI 43-101) from 2013 Feasibility Study. Current $5.1 million budget continues focus on project flowsheet and improving overall economics. Mining District: Livengood, Fairbanks Commodity: Gold.
Trilogy Metals US c/o Trilogy Metals Inc., Suite 1150-609 Granville St. Vancouver, BC V7Y 1G5 Phone: 604-638-8088
Rick Van Nieuwenhuyse, Pres./CEO
trilogymetals.com | email@example.com Recent Projects: Bornite Project, Arctic Project. Mining District: Ambler Commodity: Copper, zinc, lead, silver, and gold.
Usibelli Coal Mine 100 Cushman St., Suite 210 Fairbanks, AK 99701 Phone: 907-452-2625
Joseph E. Usibelli Jr., Pres./CEO
usibelli.com | firstname.lastname@example.org | facebook.com/UsibelliCoalMine twitter.com/Usibelli Recent Projects: Usibelli Coal Mine celebrated its 75th anniversary on August 4. More than 2,700 people attended the open house event that featured a free BBQ lunch, mine tours, door prizes, and activities for kids. Mining District: Healy Commodity: Coal.
White Rock Minerals 9360 Glacier Highway, Suite 202 Juneau, AK 99801 Phone: +61 437 315 901
Matt Gill, MD/CEO
whiterockminerals.com.au | email@example.com Recent Projects: Exploration at the zinc VMS Project at Red Mountain. Mining District: Bonnifield Commodity: Zinc, silver, lead, gold.
Oxford Assaying & Refining Corp. 3406 Arctic Blvd. Anchorage, AK 99503 Phone: 907-561-5237 Pebble Limited Partnership 3201 C St., Suite 505 Anchorage, AK 99503 Phone: 907-339-2600 Pogo Mine PO Box 145 Delta Junction, AK 99737 Phone: 907-895-2841 Teck Alaska Incorporated - Red Dog Mine 3105 Lakeshore Dr., Bldg. A, Suite 101 Anchorage, AK 99517 Phone: 907-754-6170
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907.274.3584 Alaska Businesswww.akbizmag.com
MININGSPECIAL SECTION | DEMOLITION
Explosives! A specialized mining tool By Tasha Anderson
Contributing Research by Rebecca Bergman
tâ€™s not surprising that the federal government has a few regulations regarding the use of explosives in mining: 30 CFR, Part 15 (approval of explosives and sheathed explosive units); 30 CFR Part 56, Subpart E (safety and health standards: surface metal and nonmetal mines: explosives); 30 CFR Part 57, Subpart E (safety and health standards: underground metal and nonmetal mines: explosives); 30 CFR Part 75, Subpart N (mandatory safety standards: underground coal
60 | November 2018
MININGSPECIAL SECTION | DEMOLITION
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“UCM uses explosives by drilling holes into the sandstone or coal, loading those holes with explosives, and then initiating the blast from a safe location.”
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—Lorali Simon Vice President of External Affairs Usibelli Coal Mine
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mines: explosives and blasting); and 30 CFR Part 77, Subpart N (mandatory safety standards: surface coal mines and surface work areas of underground coal mines: explosives and blasting) cover the bulk of it. National entities such as the Mine Safety and Health Administration, the Environmental Protection Agency, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Office of Surface Mining Reclamation and Enforcement all have a part in ensuring that explosives used above or below ground in the pursuit of any commodity are handled in a way that is safe for workers and the environment.
Regulating Risk And then on the state level, the Alaska Department of Labor and Workforce Development also has input as to who blows up what (and when and how). One significant requirement at the state level is that “all employees doing excavation, tunnel, quarry, earth removal, or construction work, and who are emplacing explosives for detonation, installing primers, fuses, wires, or other means of detonation, or detonating explosives, are required to obtain a certificate of fitness for explosive handlers.” This certificate is granted only to an individual (not a company or organization) who is over the age of eighteen and “is found competent by reason of training, experience, criminal history and background check, and physical fitness.” That individual
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November 2018 | 63
MININGSPECIAL SECTION | DEMOLITION
then needs to have the certificate on his or her person whenever handling explosives. A certificate of fitness is valid for three years, but may be cancelled at any time “for cause” by the Department. Turns out, explosions can be high risk. Those risks differ from site to site. According to the US Centers for Disease Control and Prevention, “Detonating explosives release toxic gases, primarily oxides of nitrogen and carbon monoxide. Nitric oxide (NO) and nitrogen dioxide (NO2) are produced by large surface blasts in which the explosive does not detonate properly. NO released by the detonation oxidizes to NO2 as the fumes mix with the atmosphere… NO2 is extremely toxic. “Carbon monoxide (CO) is also released by the detonation of explosives. CO is not a problem after large surface blasts because it quickly dissipates in the atmosphere to safe levels. CO dangers are more of a problem for construction, trench, and underground blasting. If a mine worker walks onto a blast site too soon after a blast, the CO emanating from the muck pile poses a serious risk to the work-
MININGSPECIAL SECTION | DEMOLITION
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er.” In the United States, between 1994 and 2005, eight miners were injured by exposure to blasting fumes. During that same time period, sixtyeight miners were injured because they were within the “blast area” (the area in which rocks are expected to fly) during an explosion and thirty-two miners were injured by “fly rock” (rock or debris flung outside a blast range), according to Centers for Disease Control and Prevention data. Optimally accidents such as these never take place, but considering the breadth mining activity in the United States, those numbers are low. According to the National Mining Association, in 2017 there were 311,888 mine workers in the United States and 523,034 direct jobs created by the mining industry. In 2017, of those 523,034 jobs, 4,500 were in Alaska, and the Mine Safety and Health Administration reports only one fatality related to blasting in Alaska between 2008 and 2018. Alaska’s operating mines implement stringent health and safety guidelines to ensure every employee gets home safe every day. Day in and day out, local mines successfully navigate a range of potential risks, of which handling and deploying explosives is just one. And explosives are a valuable tool. According to Paul Worsey, in an interview by Chris Lo for Mining Technology, “Explosives are very important because it’s the only really economic way to break up hard rock… Not only have you got to break it up so you can load it into trucks, it also has to be of a size that you can process easily. “That said, probably the majority of explosives in the US is used for overburden removal in surface coal mining. We mine more than one billion tons of coal every year, and the vast majority of that is from surface operations. If you’ve got coal in a surface, you’ve usually got shales and siltstones on top of it, and you have to blast to get at it.”
Explosives in Alaska Usibelli Coal Mine (UCM), the only coal mine currently operating in Alaska, “uses explosives when overburden or coal needs to be broken in order to excavate or mine it,” according to Lorali Simon, UCM vice president of external affairs. Primarily UCM uses ammonium nitrate/ fuel oil (ANFO), a widely-used bulk indus-
MININGSPECIAL SECTION | DEMOLITION
“There is large effort in planning, control of materials, and staying current on safety and regulatory requirements. Explosives can
WE ARE HECLA
generate ground vibration or noise (air blast)—so there are special controls
r e s p o n s i b l e • s a f e • i n n ov a t i ve We are proud to be one of many safe, responsible mines powering Alaska’s economy. Though we’re located in Southeast, Hecla Greens Creek supports an estimated 975 jobs across the state and spends $125 million every year with Alaska businesses.
required to avoid problems with mine neighbors.”
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trial explosive, combined with boosters and non-electric or electric detonators. “UCM uses explosives by drilling holes into the sandstone or coal, loading those holes with explosives, and then initiating the blast from a safe location,” Simon says. On average UCM blasts overburden (the layer of earth material on top of a coal seam) or coal once or twice a month. Simon explains there are pros and cons to using explosives as part of the mining process. They increase efficiency by increasing the digging rate and save wear and tear on mining equipment by reducing the hardness of the material; however, there is an added cost to acquire the explosives, and “it requires special training for all involved employees and added record keeping and permitting requirements.”
—Wendie MacNaughton External Affairs Manager Sumitomo Metal Mining Pogo
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MININGSPECIAL SECTION | DEMOLITION
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Wendie MacNaughton, the external affairs manager for Sumitomo Metal Mining Pogo, also says explosives add to efficiency. But she adds, “There is large effort in planning, control of materials, and staying current on safety and regulatory requirements. Explosives can generate ground vibration or noise (air blast)—so there are special controls and communication required to avoid problems with mine neighbors.” Pogo is an underground gold mine, and the explosives are used to break up solid rock that can’t be efficiently excavated by heavy equipment. MacNaughton explains that “explosives can be bulk slurry material (pumped from truck hauled tanks) or solid cartridges (from fifty-pound boxes) that are handled individually—two pounds per ‘stick.’ Bulk explosives require high energy caps to initiate them.” Caps, also referred to as detonators, are handled separately and then combined with bulk explosive in individual drill holes, she says. At Red Dog, one of the world’s largest zinc mines, explosives are used on a daily basis to fracture rock so it can be excavated and hauled out, according to Laura Orenga de Gaffory, community relations coordinator for Teck Alaska. “Explosives are loaded into 6.5-inch holes that are approximately 30 feet deep, arranged in a geometrical pattern designed to optimize the rock breakage. Since the rock at Red Dog is largely considered hard, nearly all of the material mined required blasting in order to excavate. The rock must be blasted to a small enough size to A) be excavated by front end loaders into haul trucks and B) be small enough for the Gyratory crusher if it is mineralized ore,” she explains. The crusher reduces larger rocks to less than five inches in size, the size required for milling. De Gaffory continues: “Red Dog employs modernized electronic initiation and delay systems from Orica to control the detonation timing and orientation of blast hole patterns. In so doing, aspects such as fly rock, air blast, and vibration are controlled in order to avoid unwanted collateral damage to infrastructure or the final walls of the pit(s). The system works well enough that technical staff are able to separate material in different directions by initiating a blast in a particular fashion.” De Gaffory says explosives are “wholly necessary in the mining process at Red Dog,” though buying and transporting them does add cost, as does the need for
systems from Orica to control the detonation timing and orientation of blast hole patterns… The system works well enough that technical staff are able to separate material in different directions by initiating a blast in a particular fashion.” —Laura Orenga de Gaffory, Community Relations Coordinator, Teck Alaska
specialized equipment and permitting.
Suppliers Red Dog uses Orica systems but sources explosives from Maxam, founded in 1979 and headquartered in Salt Lake City, Utah. Maxam is a worldwide manufacturer and distributor of commercial explosives, as well as technical services. The company states, “In 1981, Maxam North America introduced an advanced explosives system to the mining industry based on HEF-High Energy Fuel, which when blended with ammonium nitrate prills forms Heavy
ANFO. Heavy ANFO has significant water resistance, higher density, and greater energy than ANFO.” UCM sources its explosives from Orica, an international provider of commercial explosives and blasting systems. The company was founded in 1874 and has 11,500 employees across the globe. It says: “Our strategy is to be the trusted partner of choice for our customers by creating, developing, and delivering mining and civil blasting and ground control solutions that help them be more productive and manage their
critical risks.” The company’s range of products includes electronic blasting systems, initiating systems, packaged explosives, and blasting services. Locally, Advanced Blasting Services is a “comprehensive drilling and blasting contractor/subcontractor,” headquartered in Anchorage. Advanced Blasting Services has completed jobs in “every climate and condition encountered in Alaska,” and maintains “a perfect safety record after years of blasting in residential areas and close to existing buildings and utilities,” it says.
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MININGSPECIAL SECTION | DEMOLITION
“Red Dog [mine] employs modernized electronic initiation and delay
A V I AT I O N
Expanding Airlines Outside markets and operations bolster Alaska
By Tasha Anderson
he landscape of Alaska’s homegrown airlines has changed significantly in just the last few years. One of the state’s major aviation success stories, Alaska Airlines, acquired Virgin America and, in January, received its single operating certificate from the FAA. Alaska Airlines continues to move forward, leveraging its new assets to provide a more comprehensive route map balanced with ever improving customer service. In 2015, Ravn Alaska CEO Bob Hajdukovich secured financing to buy out his partners and recapitalize the 68 | November 2018
airline. A majority share of Ravn was acquired by J.F. Lehman and Co., and the remaining shares were consolidated in the Hajdukovich family. President and CEO Dave Pflieger now helms a leadership team (completed in July) that combines Alaska know-how and Outside expertise and is building on the company’s long history of success. On October 5 the court overseeing PenAir’s bankruptcy proceedings approved J.F. Lehman and Co.’s bid for the airline’s assets—PenAir will now operate with a separate FAA certificate as a subsidiary of Ravn Air Group, creating further connectivity among Alaska’s air carriers. And Northern Air Cargo (NAC), North America’s longest continuously operating, all-cargo airline, is taking significant steps to leverage its extensive history of providing aviation services in Alaska.
NAC SOC According to Northern Aviation Services (of which NAC is a subsidiary) President and CEO David Karp, NAC has been providing cargo services to Alaskans since 1956. “Our roots are in Alaska and in rural Alaska in particular,” Karp says. “We have people that have been here working in this company for more than thirty-five years, and they’re really mission driven, making sure we do a good job of getting the products out to the Bush that our customers need.” In May NAC announced that it had “acquired and been granted operating authority for its first 767-300 wide-body aircraft. NAC flight crews and maintenance technicians will be operating and maintaining a total of three newlyconverted 767-300 freighters by the end of Q1 2019,” in addition to the company’s current fleet of eight 737s.
A Northern Air Cargo flight crew in a B767-300 taxiing for take-off at Miami International Airport. Northern Aviation Services
A new Northern Air Cargo wide-body B767-300 arrives at the Miami International Airport. Northern Aviation Services
This is just the newest development in NAC’s steady progress to diversify its markets and operations. In 2008, Northern Aviation Services (NAS) acquired the cargo division of Hawaii-based Aloha Airlines when it went bankrupt, creating Aloha Air Cargo. In 2016, the company purchased a Florida cargo handling company “that was buying lift from another airline” called Strat Air. Karp explains that this eye on diversity has been driven by “the primary purpose of stabilizing our core business here in Alaska.” Today NAC is headquartered in Anchorage with bases in Honolulu and Miami. The airline is currently in the process of transitioning to operate all three locations under a single operating certificate, a phase transition it anticipates will conclude in April 2019. Karp describes it as a “managed transition very closely coordinated with the FAA.” It’s a lengthy, complicated process, but the benefits are substantial. “It’s really about efficiency and about allowing us to have more flexibility with our assets, hopefully providing ultimately better service to our customers,” Karp says. With www.akbizmag.com
Northern Air Maintenance Services ramp crew marshalling in an arriving Shared Services aircraft at the Ted Stevens Anchorage International Airport. Northern Aviation Services
November 2018 | 69
Strat Air warehouse crew loads and unloads a variety of cargo moving to and from Miami, the Caribbean, and South America. Northern Aviation Services
NAC and Aloha operating as separate airlines, there’s little flexibility in how the aircraft can be deployed. “[But] when you have a single airline, you have a lot more flexibility in terms of cycle utilization. In Hawaii we’re in a very high-cycle environment, we’re taking off and landing a lot more frequently; here in Alaska it’s longer, so we don’t burn quite as many cycles. But part of what you’re trying to do with airplanes is manage the cycles, and so if we can do it across a broader platform, we get overall better utilization.” NAC Vice President of Administration 70 | November 2018
and Contracting Ann Campbell adds, “Another part of the motivation, too, is diversification to strengthen the airline core so that, when we have down cycles in Alaska, we have other business other places so that the jobs are still here… It’s part of the long-term strategy.”
Outside Alaska While he’s not a pilot himself (“I like to think I know my limitations; I fly a desk,” he laughs.), Karp grew up in Nome and has been around planes his entire life. Karp actually started his career in
aviation working for a company called Hawaiian Vacations, which chartered passenger flights between Anchorage and Honolulu, and moved to the air cargo side of aviation in 2006. His connection to Hawaii mimics that of many businesses, including NAC, which find Hawaii to be a natural place for expansion, often because of the many similarities the two states share. In Hawaii, through Aloha Air Cargo, the company primarily runs “inter-island” flights from Honolulu to its four main markets: Maui, Kona, Hilo, and Kauai. In addition to moving cargo for FedEx, UPS, and USPS, these flights often carry agriculture-related cargo on a quick, next-day delivery schedule. “Hawaii has a year-round maritime surface transportation, so everything we move in Hawaii is pretty much timesensitive,” Karp explains. Aloha Air Cargo also operates a flight from Honolulu to Los Angeles six days a week with a wide-body 767 “to feed our network in Hawaii.” There are approximately 450 employees working in Hawaii, which is roughly equivalent to the company’s Alaska workforce. In Florida, the company’s newest market, there are a little more than 200 employees. The majority of cargo out of Miami is flown on the wide-body 767-300. For example, through Strat Air, NAC operates three or four flights a week to Lima, Peru, primarily carrying consumer goods on the flights to Peru and agricultural products back to Florida. Five or six days a week, flights run from Miami to San Juan, Puerto Rico. The bulk of NAC flights that utilize the wide-body plane are in and out of Florida because “the demand for space is there because the population centers are so much bigger,” Karp says. “There really isn’t any demand for wide-body aircraft operating within the state of Alaska. We could [in theory] fill up a 767 for a place like Barrow or Nome once every ten days, but that doesn’t work: you have to have higher frequency [of flights] and most of the runways here wouldn’t accommodate the aircraft anyway.”
New Planes, New Pilots While NAC provides other aviation-related services in both Hawaii and Alaska, Miami is strictly a cargo operation. However, South Florida is where NAC often conducts non-classroom training for pilots because the flight simulators necessary for training aren’t available in Alaska.
And the company is doing a lot of training. “We’ve hired at least thirty new pilots, and we’ll probably be hiring significantly more than that as we spool up,” Karp says. NAC is training two different pools of pilots: those who are new to the company and those who plan to transition from flying the narrow-body aircraft to flying wide-body. Regardless of their career history in aviation, newly-hired NAC pilots are required to receive standard, FAA-regulated training, which can take up to four months and includes ground school, flight simulation, and operating experience on the actual plane. This training is plane-type-specific, which is why current NAC pilots are also scheduled for training if they plan to transition to fly the wide-body planes. “Once they move from the narrow-body to the wide-body, they can’t go back and forth. You’re in one or the other,” Karp says. Pilots are offered positions and opportunities in order of seniority, so current NAC pilots who are interested in flying a 767, which is about four times the size of a 737, will get that opportunity before
Northern Air Maintenance Services ground crew loading oilfield workers’ checked baggage. Northern Aviation Services
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November 2018 | 71
Photo courtesy Fountainhead Hotels
Fountainhead Development, Inc. Real estate development, management, and operation
ountainhead Development Inc., (FDI) has more than 600 rooms spread across three distinctive Fairbanks properties: Sophie Station Suites, Wedgewood Resort, and the Bear Lodge. Sophie Station, for example, is ideal for business travelers, with its proximity to the airport and spacious, apartment-style accommodations. Offering 148 fully-appointed suites, it provides many of the comforts of home, including a full kitchen, living room, and separate bedroom. Sophie Station also features beautiful landscaping and one of the best restaurants in town: Zach’s, which is known for its innovative cuisine. It also has a ﬁrst-class bar—the Express Room Lounge—a relaxing space with ﬂoor-to-ceiling bookshelves and overstuffed leather chairs. “We’re truly local and independent,” says Bobby Hanson, Operations Manager of Fountainhead Development. “This enables us to personalize service to our guests in a way that they don’t get at other hotels.” MULTIPLE BUSINESSES Fountainhead Development’s hotels are part of a complex operation of businesses encompassing multiple states. Established in 1985, the company is headquartered in Fairbanks and primarily engages in real estate development, management, and operation in Alaska. Washington-based Fountainhead Northwest, provides Class A ofﬁce space to tenants such as Blue Origin, Alaska Airlines and Lockheed Martin. In addition, Fountainhead manufactures equipment through another related entity: Equipment Source Inc. (ESI), which has locations in Fairbanks and Anchorage; Tukwila, Washington; and Williston, North Dakota. The company excels at building equipment for extreme environments. “We’re Alaska-born and -raised and built Arctic-tough,” says Tim Cerny, President of FDI and ESI. “If you want a generator that will operate at 60 below zero, you should come talk to us.”
ONGOING COMMITMENT Fountainhead Development, which conducts substantial design-build work, can handle all aspects of its business inhouse, from design to construction, back-ofﬁce accounting to housekeeping, and concept to production. This independence allows the company to have greater control over projects and work more efﬁciently. “We pride ourselves for bringing projects in on time and under budget,” Cerny says. “In the last twelve months, we have worked our way through 220,000 square feet of multi-tenant ofﬁce and retail leases in Washington and Fairbanks.” However, Fountainhead doesn’t just build businesses to sell them. Cerny explains: “We continue to operate them, and they become part of our portfolio. We’re committed to staying for the long haul and helping build viable communities.” As such, Fountainhead supports various community initiatives, including Tanana Chiefs Conference Housing First, educational tours at the Fountainhead Antique Auto Museum, a wildlife sanctuary at Wedgewood Resort, and the Cripple Creek Restoration Project. Fountainhead Development is also strongly committed to its employees and customers. The company—which has 170 to 350 employees, depending on the season—is focused on training the next generation to ensure it continues to be an important part of Alaska’s business community. It’s also concentrating on always being available for customers. “We’re locally-owned and -operated,” Cerny says. “Our customers can connect with us seven days a week.”
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new hires. But “you have to hire [and train] the replacement pilots for the 737 long before you can get your candidates for the wide,” Karp explains. Not all of NAC’s pilots are opting to take the opportunity to fly the larger aircraft. “[Some pilots] that have been with the company for a long period of time [in Alaska and Hawaii] know the market, they’re committed to the market, and they’re far enough along in their careers that this is what they do and they have no interest in relocating… which is great because they’re familiar with the markets, the people, and the routes.” Karp says that the majority of recruiting will take place in 2018, and decisions that follow in terms of building crews will then be market driven. “We tend to be a little bit more conservative, not making a lot of highly speculative moves, but rather going out and trying to build lanes and then putting our own metal on them. That’s part of what lends to the stability of the organization overall.”
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More Than Cargo The company also finds stability through diversification, and expanding into new markets and new equipment is just a part of NAC’s diversification picture. “We’re diversifying geographically, we’re diversifying aircraft type so that we can accomplish different missions based on the need, and then we’re also diversifying by discipline, which basically means we’re not just flying cargo now,” Karp says. NAS has two Part 145 repair stations, which perform aircraft maintenance. In Alaska, NAC’s subsidiary Northern Air Maintenance Services has about one hundred employees who work for Conoco Phillips Shared Services Aviation, performing maintenance for the Shared Services fleet, which flies back and forth to the North Slope. “It’s a completely separate piece of business for us: we don’t pilot the airplanes, we don’t do anything with flight attendants. But we do all the maintenance, the baggage handling, catering, and security screening in Anchorage, Fairbanks, and the North Slope,” he says. In Hawaii NAS operates Aloha Tech Ops, which performs all the “non-routine and periodic pre-departure check maintenance for Alaska Airlines, America Airlines, West Jet, and a lot of the domestic carriers that come from the West Coast.” www.akbizmag.com
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Aloha Air Cargo loading time-sensitive cargo for a flight from Honolulu to one of the outer islands. Northern Aviation Services
Bringing It Back to Alaska All of these parts and pieces have contributed to NAC’s balanced and steady growth. “Stability of the company is much greater now that we have some uniquely different operating environments,” Karp explains. That stability has
been vital, as many companies that rely on a robust economy in Alaska have felt the squeeze for three or four years running. The bottom line is that NAC has strengthened its ability to operate reliably in Alaska, providing much needed services and jobs, through expanding
into other markets. “It gives us the ability to weather the storm a little bit when it comes to downturns in the economy and provides more stability in terms of how we’re perceived as an employer, in that if the Alaska economy were the only thing that we were focused on, we
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Northern Air Cargo warehouse team staging and loading supplies destined for rural Alaska. Northern Aviation Services
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probably would have laid off people in the last couple of years,” Karp explains. “Instead, we grew our employee base here because of the activities we had going on in other places.” Since both NAS and NAC are headquartered in Alaska, many of the company’s office staff members are located in Anchorage, working to support nationwide activities. In fact, NAC is creating a new facility in Alaska to support its operations: “We’re just getting ready to open up our new systems operational control center [SOCC]. Our old dispatch function involved three to four people sitting in an office dispatching our small fleet of airplanes. The new SOCC is a fifteenseat, dispatch-oriented systems operation control room where maintenance control, flight operations, and crew scheduling all come together to oversee the successful and safe execution of all of the flights within our system. Those jobs are in this community,” he says. According to Karp, as NAC has expanded, one of the company’s concerns is that its Alaska clients and communities may think the company’s focus is shifting outside of the Last Frontier. “In fact, it’s the contrary,” he says. “We’re fortifying our stability to make sure that we can continue to provide critical service to our core… there’s job growth here not just in the dispatch function, but we have more people in the accounting department, we have more people in the safety department, we have more people in the maintenance department, and IT has really exploded. Aircraft records are a really big deal, and that’s being managed from here.” Karp continues, “The main emphasis for us, what drives us, is that stabilization and the ability to maintain the focus on Alaska. We do a lot of things in the local market: we like to get out to every one of the communities we serve and participate in the high school graduation with scholarships, but we also bring fresh flower leis from Hawaii now, so every senior graduating from high school in the markets that we serve every year gets a fresh flower lei from Hawaii. We try to be active participants in these communities… We have a lot of people who work here in Anchorage who grew up in the Bush, so they understand the significance of the services that we provide, and we really feel a strong sense of obligation to keep that going.”
RESOURCE DEVELOPMENT SPECIAL SECTION | FISHERIES
Facing the Blob Challenges facing Alaska’s seafood industry By Isaac Stone Simonelli
hallenging statewide salmon har vests have dominated head lines, with record-high sockeye production in Bristol Bay being the state’s primary saving grace. However, salmon are not the only fish in the sea keeping the state’s fisheries afloat, with many fishermen relying on groundfish, herring, and miscellaneous shellfish to make ends meet. Some fishermen use alternative fisheries as a way to balance their portfolios, while others focus entirely on a single target species ranging from Dungeness crab to sablefish. “In a typical year, Alaska’s most valuable fisheries [measured by value of harvest] include salmon, pollock, Pacific cod,
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RESOURCE DEVELOPMENT SPECIAL SECTION | FISHERIES A commercial seine boat in Amalga Harbor, near Juneau, fishes for chum salmon, which in Lynn Canal is primarly produced by the Douglas Island Pink and Chum hatchery. Dave Harris ADF&G
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RESOURCE DEVELOPMENT SPECIAL SECTION | FISHERIES
crab, halibut, and black cod,” says Garrett Evridge, an economist with McDowell Group, an Alaska-based research firm. In 2017, salmon was the most valuable fish group. Harvest of all five salmon species totaled more than $781 million in ex-vessel value, the amount paid to fishermen for their catch. However, Evridge notes that 2018 has been a disappointing year for many salmon fisheries, a statewide concern. “Salmon across the state have come in weaker than forecast, particularly in the North Gulf of Alaska,” says Bert Lewis, the Central Region supervisor of the Division of Commercial Fisheries for the Alaska Department of Fish and Game (ADFG). “In the region I work, we saw some of the lowest returns of sockeye salmon in recent history with the exception of Bristol Bay, where we had the biggest run on record.” The sockeye salmon harvest is estimated to be 37 percent of the recent ten-year average, making it the smallest since 1975—all other smaller harvests date back to the 1800s. The “blob”—a warm water anomaly that washed into the Gulf of Alaska in 2015—is thought to be the culprit. With most sockeye salmon spending three years in the ocean, those returning this year initially swam out into warmer waters, which researchers speculate disrupted the food webs that support the salmon, decreasing their survivorship and resulting in poor returns this year. “That concept is supported by the record return we saw in Bristol Bay, with close to 65 million sockeye returning that, in 2015, came out into the Bering Sea, which did not have this warm-water anomaly,” Lewis says. However, poor harvests weren’t limited to sockeye: Chinook, chum, and pink numbers all came in low. “In the Southeast, total salmon harvest will be about 30 percent of the recent ten-year average, due primarily to poor pink salmon run, since pink salmon usually make up most of the harvest,” says Steve Heinl, a regional research biologist for ADFG in Southeast. “Pink salmon harvest is 19 percent of the recent ten-year average and the smallest since 1976,” Heinl says. “Pink harvest will be less than half of the harvest in 2016 [18.4 million fish], which spurred a formal declaration of disaster.” 80 | November 2018
Levels are well below ADFG’s forecast of 23 million pink salmon, though only slightly below the National Oceanic and Atmospheric Administration forecast of 10 million to 23 million. As of late August, chum salmon harvest to date was 69 percent of the recent tenyear average; Chinook harvest was at 30 percent of recent ten-year average; and coho harvest was on track to be lowest in thirty years, says Heinl. Though state numbers are low, harvest success varied dramatically among systems. In Southeast, there were excellent Sockeye runs at Chilkoot Lake and Redoubt Lake, which stood in stark contrast to poor runs in places such as Situk River, where the fishery was closed for most of the season. In the Arctic-Yukon-Kuskokwim (AYK) region, the fall chum and coho salmon directed commercial fisheries were still harvesting into the second week of September. “The most notable change to AYK Region commercial fisheries is the decline in Chinook salmon harvest in recent years. Similar to other areas of the state, AYK Region Chinook salmon production and annual run sizes have declined over the past decade,” explains John Linderman, the regional supervisor for ADFG in AYK. “We have seen modest increases to Chinook run abundance in more recent years, but it remains below historical levels. This has resulted in restrictions and closures to commercial Chinook salmon fisheries and restrictions to subsistence Chinook fisheries throughout the region.” Commercial fishing numbers for AYK do not include any from the Kuskokwim area, as there have been no commercial fisheries in the region for the past several years due to a lack of active buyers and processors. There are only one or two local catcher-sellers on the Kuskokwim River, and they are focused on small harvests of coho. “AYK Region commercial buyers and processors have responded to declines in Chinook harvest by being adaptive and shifting focus and operations onto more abundant species, for example, summer and fall chum salmon on the Yukon River,” Linderman says. “Additionally, the largest Yukon River buyer has been instrumental in pursuing new and innovative selective harvest methods that allow for Chinook conservation via
live release while retaining target species such as chum. Examples include dip nets and ‘fish friendly’ fish wheels with regulatory requirements for all Chinook salmon to be released alive and unharmed when warranted.” The good news coming out of AYK is a record commercial chum harvest in the Kotzebue area and a record commercial coho harvest in the Norton Sound area this year. Despite the poor returns in fisheries, Lewis says he remains optimistic. “Salmon populations are cyclic and they always have ups and downs,” he says, noting there are plenty of reasons to predict that the populations will rebound. However, researchers are seeing some stages of dynamic flux where the patterns that had made salmon returns somewhat predictable have fallen apart. Nonetheless, Lewis says that they would need to see data way outside the numbers they’re currently getting to make any changes to the system of managing salmon fisheries in the state. “The bottom line is our management has been very successful at getting enough fish back into rivers to spawn and sustain the population,” Lewis says. “That is the foundation of Alaska fisheries management for salmon, which sets the golden standard globally for sustainable management. And your in-season escapement goal-based management has proven resilient to changing salmon production levels. “When you look at the whole, the department manages to put enough fish into the river while you have stakeholders, subsistence, personal use, sport, and commercial harvesters with resource demands that remain the same or grow as the salmon population cycles up and down—that’s where we see the social impact of less fish. “But as long as we continue to get the number of fish needed into spawning populations, the population remains sustainable and will cycle out of these phases of reduced productivity.” One broad trend over the last ten to fifteen years throughout the state is record low sizes of returning salmon. “In the past fifteen years, there is a consistent trend across Alaskan salmon species for fish to come back smaller and younger,” Lewis says. Not only does this have implications for the market value for the fish, especially
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RESOURCE DEVELOPMENT SPECIAL SECTION | FISHERIES
“The seafood industry supports economic activity, employment, and tax revenue throughout Alaska. For many communities, this industry is the largest or among the largest source of economic activity. Cordova, Petersburg, Wrangell, Sitka, Kodiak, Sand Point, King Cove, Akutan, Unalaska, and other communities all have high economic dependence on the seafood industry.” —Garrett Evridge, Economist, McDowell Group
82 | November 2018
RESOURCE DEVELOPMENT SPECIAL SECTION | FISHERIES Sitka Sound herring sac-roe fishers, conducted with purse seines. Here the catcher boat, left, has tied up to a tender to pump the catch out of its net and into the tenderâ€™s hold. Dave Harris ADF&G
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RESOURCE DEVELOPMENT SPECIAL SECTION | FISHERIES
sockeye, for which larger fillets are in demand, but it also impacts the processing side. “In today’s age of automated processing lines, there are lots of challenges when trying to process fish of various sizing,” says Martin Weiser, the chief development officer for Copper River Seafoods. “We end up spending a great deal of labor sorting fish so that the machines can be adjusted to the various sizes. As far as the market goes, it is difficult to get some buyers to want the smaller fillets, as well as get the maximum value for the resource.” A fish processing plant can only manage a certain number of fish per day. So, if the average weight of fish caught is one pound less and the plant processes 50,000 fish per day, that’s 50,000 fewer pounds of fish being sent to market. However, low returns and diminutive fish are not what Weiser identifies as the biggest issue facing Alaska’s seafood industry
Red Flag for Alaska Seafood “One of the biggest concerns for the salmon industry in coming years is our relationship with China,” Weiser says.
84 | November 2018
“Copper River Seafoods is not a big pink salmon company, so we do not see this affecting us directly, but others who put a lot more effort into pinks than we do will be challenged by this. “Also, the political challenges and low returns in Cook Inlet are somewhat unsettling to us, as in years past the salmon produced in this fishery are beautiful, high-quality fish that demand high prices in the marketplace.” China’s recently announced 25 percent tariff on American seafood imports is already causing issues, says Alaska Seafood Marketing Institute (ASMI) Communications Director Jeremy Woodrow. “The Chinese tariffs will likely increase the cost of Alaska seafood products to Chinese consumers. Depending on the species, the Alaska seafood products may not be cost-competitive with the additional tariff,” Woodrow says. “Implementation of this tariff has already caused hiccups, delays, and order cancellations.” Nonetheless, the Chinese domestic market is still a desirable market for Alaska seafood and the Alaska seafood industry has been building the brand in
the market for more than two decades, Woodrow says. “ASMI is currently not altering its brand strategy in China and will continue efforts to raise consumer awareness and preference for Alaska seafood products. ASMI will also continue to evaluate the market and may alter marketing efforts in the future if necessary,” Woodrow says. The tariff on seafood was addressed by Senator Lisa Murkowski during a late-July Commerce, Justice, and Science Subcommittee hearing. “It has clearly rattled my state. Our seafood industry is the number one private industry in terms of the jobs and the economic opportunity it brings. Last year with our salmon exports, about 40 percent of our salmon went to China over the last five years; it’s been about a half of our salmon [that] has been exported to China. And it’s not just the salmon. With cod, 54 percent of our cod [exports] last year went to China. So this is very, very significant to us,” Murkowski told Ambassador Robert E. Lighthizer, US Trade Representative. “We’re still trying to figure out what exactly this means—not only to our fishermen but to the processors, the logistics
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RESOURCE DEVELOPMENT SPECIAL SECTION | FISHERIES
industry—all aspects of the seafood supply chain. And then the 10 percent retaliatory tariffs that were announced just last month put even more pressure on our seafood processors because many of our fish and shellfish that are harvested in the state are then processed in China before reimporting back to the US for domestic distribution. So, in many ways, we’re looking at this and it is in effect, imposing a 10 percent tax on our own seafood. Which is just a tough one to reconcile.”
Grabbing Groundfish The 2018 season for groundfish targeted by the commercial fishing industry, including halibut, sablefish, Pacific cod, walleye pollock, and several species of rockfish, has yet to end. Measured by volume, pollock is Alaska’s largest fishery. In 2017 more than 3.4 billion pounds of pollock was harvested in the Bering Sea and Gulf of Alaska. “Fisheries are ongoing. Comparing the last full year’s data  to previous years shows similar harvest levels for lingcod, sablefish, and rockfish. Commercial landings of Pacific cod were down in 2017 and continue to
remain low in 2018,” says Karla Bush, ADFG shellfish-groundfish program leader for the Southeast Region. Though there are signs of an increased biomass of sablefish, leading to catch quotes being bumped up in some areas, Pacific cod catch rates and harvests have been low. These lower numbers suggest that Southeast may be experiencing a period of reduced biomass, similar to other areas of the Gulf of Alaska—a prominent theory for this is tied to the same blob that is thought to have impacted salmon returns this year. “Prevailing evidence suggests that warm water associated with the blob event resulted in poor survival of smaller sized cod and failed recruitment likely due to low food availability,” Nicholas Sagalkin, ADFG Westward Regional supervisor, says. “As a result, 2018 gulf-wide Pacific cod catch is down over 80 percent compared to previous years. Pacific cod catch in the Bering Sea and the Aleutian Islands were similar to previous years [where there is no apparent blob effect]. Catch for the small state managed pollock and rockfish fisheries were also similar to previous years.”
Though groundfish make up a small part of ex-vessel value for Southeast fisheries—about 5 percent—their value to communities and the state as a whole should not be underestimated. “The groundfish fisheries are very important for the permit holders, depending on what other fisheries they have access to or are involved in,” Bush says. Overall, groundfish typically represents around 80-plus percent of total fisheries volume in the state and around 50 percent of the total value, Sagalkin says. “Kodiak, Sand Point, King Cove, Akutan, and Dutch Harbor all have year-round, shore-based fish processors. These processors rely heavily on groundfish to maintain operations. Unlike salmon, most groundfish fisheries occur during fall and winter months,” Sagalkin says.
Herring Herding In recent decades the commercial herring fishery catch has been dominated by the sac-roe and the spawn-on-kelp fisheries, with the product primarily being exported to Japanese markets, explains Kyle Hebert, the herring and
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in areas other than Sitka and Craig because other stock levels were below the thresholds of abundance required to allow fisheries,” Hebert says. The herring fisheries of Cook Inlet and Prince William Sound declined twentyto twenty-five years ago and have yet to recover, leaving Kodiak and Togiak as the largest herring fisheries in the state with biomass orders of magnitude larger than anywhere else in Alaska.
Scooping up Shellfish Results from the Bering Sea crab survey revealed a substantial loss of biomass
and abundance in mature red king crab and blue king crab. However, the picture is not the same for all crab species in all regions. “Southeast Tanner crab harvests were at the five-year average [1.2 million pounds] for the 2018 season,” Bush says about harvest levels in Southeast. “Dungeness harvests were lower in 2017, and the season was reduced in length due to not meeting the regulatory threshold for a full season. In 2018, the threshold was met and so there will be a full season of fishing. Dungeness crab is more cyclical in the Westward Region
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RESOURCE DEVELOPMENT SPECIAL SECTION | FISHERIES
dive research program leader for ADFG in Southeast Alaska. “Compared to other fisheries in the state, herring fisheries contribute a relatively small amount to the overall ex-vessel value. In recent years, herring ex-vessel value has been approximately 1 percent of the total value of commercial fisheries in Alaska,” Hebert says. “During 2013 to 2015, statewide herring ex-vessel value averaged $12 million compared to the total value of state-managed fisheries of $923 million [salmon, herring, invertebrates, and groundfish]. In Southeast Alaska, herring fisheries have contributed about 7 percent to the ex-vessel value of commercial fisheries in the region, averaged over the past twenty years.” Though herring make up a small portion of the total value of Alaska’s fisheries, they are still important, notes Sagalkin. “Herring in the Westward Region has become a smaller fishery, but small fisheries are often a very important part of a fishermen’s portfolio to protect against downturns in other fisheries,” Sagalkin says. For the 2017-2018 season, two commercial herring fisheries were opened in the Southeast: Sitka, which is arguably the most-well known herring fishery in the state, and Craig. In Sitka, a spawning population largely comprised of young, small herring did not meet the minimum size or roe quality requirements for the market, which meant that the fishermen were unable to meet the guideline harvest level of 11,128 tons or the catch in the sac-roe fishery total of 2,926 tons, Hebert says. Though the bait fishery in Craig fell short of the guideline harvest level, the estimated harvest for the Craig spawnon-kelp fishery was 205 tons, which was the largest harvest since the inception of the fishery in 1992. “The total commercial herring catch of 4,626 tons during the 2017-18 season in Southeast Alaska was substantially lower than the previous season, and generally lower than recent years,” Hebert says. The average total catch over the previous ten years is 18,265 tons. “The much lower catch during the 2017-18 season was in large part due to the low catch in Sitka Sound, which is by far the largest herring stock in the region. Additionally, regional harvest was low because no fisheries were opened
RESOURCE DEVELOPMENT SPECIAL SECTION | FISHERIES
because they are at the edge of their range; however, harvest of Dungeness crab in the Westward Region was higher than recent years, and will likely exceed a million pounds.” Unlike Southeast, which saw average harvest numbers, Tanner crab east of the Bering Sea saw a 43 percent decline of mature males and a 70 percent decline of mature females. “That has been in a precipitous decline in the last three years,” Foy says. “There is a small amount of juvenile crab that might suggest there’s a little bit of recruitment coming.”
The most positive results from the survey revealed a year-over-year 60 percent increase in the number of mature male snow crabs and a 56 percent increase in mature females.
Shellfish Diving Miscellaneous shellfish fisheries, or “dive fisheries,” continue to be valuable in Southeast, despite pressure from a growing sea otter population, says Hebert. “Overall, regional abundance continues to decline; however strong ex-vessel prices and recent action by the Alaskan Board of Fisheries to increase harvest rates have
compensated to maintain value.” The 2018-2019 commercial fishing season has already kicked off for sea cucumbers, geoducks, and red sea urchins. “Last season, the guideline harvest level for sea cucumbers was about 1.2 million pounds and the preliminary guideline harvest level for the 2018-2019 season is 1.8 million pounds. Fishery guideline harvest levels for geoducks or sea urchins are still being completed for the 2018-19 season,” Hebert says. In the Westward Region, the dive fishery for sea cucumbers opened in Chignik on September 15, and dive fisheries for both sea cucumber and urchins opened October 1 in Kodiak, with guideline harvest levels the same as the recent ten years.
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Preliminary data indicate the 2017 harvest of Alaska seafood was a record high; it is unlikely 2018 will surpass this figure, as the total value of salmon and Pacific cod—and other key species—are lower, Evridge says. The Alaska seafood industry is the state’s largest private sector employer, with about 57,000 people directly employed in Alaska across the commercial fishing, processing, and fisheries management sectors, among others, according to the McDowell Group. “The seafood industry supports economic activity, employment, and tax revenue throughout Alaska. For many communities, this industry is the largest or among the largest source of economic activity,” Evridge says. “Cordova, Petersburg, Wrangell, Sitka, Kodiak, Sand Point, King Cove, Akutan, Unalaska, and other communities all have high economic dependence on the seafood industry.” From the blob to tariffs, Alaska’s seafood industry—and the communities that are economically dependent on it—faced numerous challenges in 2018. However, strong management policies put in place to avoid the long-term, detrimental impacts of overfishing and variations within fisheries have left many in the industry optimistic. “The volume and value of seafood harvested in Alaska fisheries often fluctuates year-to-year. The current state of Alaska fisheries is generally in line with previous years,” Evridge says. Editor’s Note: On September 28, Pacific salmon fillets were removed from the list of products from China on which tariffs will be applied.
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RESOURCE DEVELOPMENT SPECIAL SECTION | OIL & GAS
The First Oil Wells in the Alaska Arctic ‘The difficult we can do at once, the impossible takes a little longer.’
By Ross Nixon
he path to Alaska’s modern day oil prosperity began with a top priority and long forgotten WWII expedition. This mission was a true epic, worthy of remembrance. Alaskan people always knew some sort of oil supply lay beneath the Arctic. For generations, Alaska Natives collected tarry lumps of sand and burned them for warmth. Early explorers mentioned finding oil sands. Rumors floated around of tar-filled lakes north of the Brooks Range. The “King of the Arctic,” Charles Brower, reported
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RESOURCE DEVELOPMENT SPECIAL SECTION | OIL & GAS
oil seeps along the Arctic Coast to the chief geologist of Standard Oil Company in the 1920s. A Wainwright teacher even filed oil claims for seepages he found at Cape Simpson, also in the ‘20s. President Harding designated an Indiana-sized chunk of Alaska as Naval Petroleum Reserve 4 (NPR 4) in 1923. The times saw the US Navy converting from coal-fired ships to oil burners. Securing land for an emergency wartime fuel source made sense. At that time, the states of Texas and Oklahoma rolled in oil money from their booming oil fields, keeping the isolated Alaska North Slope
off the oil man’s radar. Through the 1920s there’d been geologic and topographical surveys north of the Arctic Circle, but of the oil potential there, little was known. Under the pressure of a mechanized war run on limited oil resources, the US Navy sent an exploratory group to check NPR 4 for oil in 1944. Lieutenant William T. Foran USNR led the party. As a member of one of the 1920s geological survey teams, Foran believed the North Slope held large amounts of oil. Flown from Fairbanks by the famous Bush pilot Sig Wien and led by Simon Paneak
President Harding designated an Indiana-sized chunk of Alaska as Naval Petroleum Reserve 4 in 1923. The times saw the US Navy converting from coal-fired ships to oil burners. Securing land for an emergency wartime fuel source made sense.
of Chandalar Lake, the naval explorers found oil seep evidence throughout NPR 4. Interestingly enough, the horrible North Slope weather gave a fortuitous break. Foran wrote: “Impossible flying conditions forced considerable waiting in Barrow, but much was accomplished, and waiting periods provided time for gathering invaluable information from old-time resident trader Charles Brower and from the parties’ veteran pilot Sig Wien.” In his final report on the month-long expedition Foran noted, “A petroliferous area of indicated major importance exists in the confines of NPA 4.” He recommended oil exploration be conducted there immediately. Officials in Washington DC, with the blessing of President Roosevelt and the chief of Naval Operations, ordered a fully equipped drilling expedition be sent to NPR 4. Never before had oil been extracted from the Arctic. The fiasco of the Canol project in Canada depleted a lot of time, money, and sorely needed wartime resources. Pulling oil from the ground, even in the sub-Arctic, proved to be difficult. Would it be impossible under
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Ultimately Alaskan Scouts found a path through the Brooks Range, a path the trans-Alaska pipeline closely follows to this day. specialized in Alaska wilderness survival. Ultimately this survey team found a path through the Brooks Range, a path the trans-Alaska pipeline closely follows to this day.
NCB 1058’s plans called for a landing at Cape Simpson, where the Seabees would build a camp and drill for oil. From the Cape, they’d freight drilling supplies across the tundra to Umiat, a prospective
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RESOURCE DEVELOPMENT SPECIAL SECTION | OIL & GAS
the tougher and even more remote Arctic conditions? The nucleus of the men for the first North Slope oil drilling expedition came from Naval Construction Battalion 12. These were men who had built and fought their way in Alaska from Kodiak to the bloody shores of Attu. These men were Seabees, the legendary construction men of the US Navy. The “Fighting Seabees” were naturals for any herculean task with their motto of “Can Do” and their philosophy of “The difficult we can do at once, the impossible takes a little longer.” From the Seabee ranks, roughnecks, toolmakers, drillers, and petroleum geologists gathered at Camp Peary in Virginia and joined a core group of Aleutian veterans. Handpicked men “who were capable of carrying out the arduous tasks which would confront an expedition of this type, entering the Arctic for the first time in history” made the roster, according Navy records. The 1944 push toward victory against two major enemies kept the skills of the Seabees in high demand, so the secretary of the Navy issued a freeze order on the selected group to keep them from being assigned elsewhere. As the military prospectors marked time in Virginia, two liberty ships (a type of vessel designated for emergency construction), the U.S.S. Spica and the S.S. Jonathan Harrington of the Alaskan Steamship Company, as well as a Navy Catalina flying boat for ice patrol, were readied on the West Coast. The ships were outfitted with radar. Ship pilots with ice navigation experience were assigned to the crews. In July 1944 the 1058 th Naval Construction Battalion (NCB 1058) detachment set sail from Tacoma carrying more than 8,000 tons of tools and supplies: enough to sustain 196 Seabees oil drillers for one year. Their commanding officer was a proven leader from the Aleutian Campaign, Commander W.H. Rex. The battalion’s final orders could be summarized as follows: “Find oil in commercial quantities on the North Slope of Alaska.” Concurrent to the sea expedition, an overland pipeline survey team launched from Fairbanks seeking a pipeline route for oil from the Arctic. Alaskan Scouts (the 1 st Alaskan Combat Intelligence Platoon) accompanied the team. The scouts were all long-time Alaskans; men
RESOURCE DEVELOPMENT SPECIAL SECTION | OIL & GAS
Sig Wien flew a Caterpillar D2 from Chandalar Lake in pieces. To get the D2 to Umiat, he flew fifteen trips across the Brooks Range. site along the Colville River. At Umiat they’d build a camp and airfield, as well as drill. The Arctic Ocean wrecked these carefully made plans. Rough and icy seas, 35-knot winds, and the lack of a suitable landing beach at Cape Simpson forced the 1058th to land near Barrow
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(now Utqiaġvik). Just about anything that could go wrong did during the twelve-day offload. Giant waves and strong winds tossed the barges and landing crafts like corks. More than thirty men ended up in the cold sea, only to be saved by quick-thinking shipmates.
Young Navy coxswains used landing ship tanks to push ice floes out of the way of the unloading efforts. Ice forced the liberty ships to shelter east around Point Barrow. A windstorm destroyed the Catalina patrol plane, the hulk of it sinking at its moorings while the lighter parts blew away across the tundra like so many lost feathers. The 8,000ton load was beached, though it took months to collect all the supplies. At one point fuel barrels covered more than eight miles of beach. Well into winter, clean-up sleds combed the frozen shores and collected a barge’s worth of scattered gear. Before the ice closed in, the liberty ships retreated south. Doubtful at first, Barrow locals insisted the “big Seabee would bury the little ones and then they would bury the big Seabee” when they first saw the temporary tents of NCB 1058. The Alaska Natives knew all about surviving in the Arctic, but the Navy men surprised everyone and finished a livable camp in thirty-three days. This feat came about in the typical Seabee fashion of making the impossible possible with cooks, clerks, and even officers grabbing tools and working for the cause. The battalion’s city consisted of living quarters, a hospital, recreation center, galley, powerhouse, garage, storage, administration buildings, and a radio station. In time refinements came: a barber shop and a church. Initially, air service was provided by aircraft that landed the beach. Proper fill for an airstrip was hard to come by, but Seabee ingenuity created a fill of pea gravel and tundra. By late September, a 5,000-foot airstrip made beach landings unnecessary. Sig Wien and his group of Bush pilots from Fairbanks serviced the Navy camp with small Bush planes, but their main customers were the North Slope villages. Important military needs went unmet. By January 1945, Naval Air Transportation Service and the Army Cold Weather Unit from Ladd Field dedicated heavier hauling aircraft to the needs of the expedition. Pacific Alaskan Airways contracted to haul supplies to Barrow, too. Eventually
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The Lost Scout: In this spot, Which is truly no man’s land, In darkness and in swirling snow, An Alaskan Scout, As with all our dead of this war, Gave his life so that we alive, Find the way less difficult. Nothing came easy, as is the way of the Arctic. Wien Airlines used a frozen lake near Umiat to supply the budding camp, operating their aircraft on skis. In time the surface became so bumpy from snow drifts that passengers were ordered to lie down for takeoffs and landings. To smooth the lake, heavy equipment was needed. Sig Wien flew a Caterpillar D2 from Chandalar Lake in pieces. To get the D2 to Umiat, he flew fifteen trips across the Brooks Range. In Umiat the D2 required complete assembly. This little Cat provided legendary www.akbizmag.com
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air service became so efficient one Texan got mail from home within six days. With the settlement in place and winter solidly freezing the tundra, the mission of NCB 1058 could now be carried out. The slogan of the Seabees’ northernmost freight outfit was, “We deliver the freight, regardless of weather, supplies, communications, or personal hardships.” The dark Arctic days brought blizzards and temperatures of minus 50 degrees Fahrenheit. But the freighters lived up to their motto. During the first few months of 1945, Caterpillar D8s pulling live-in wannigans—along with the drilling rigs and supplies needed to set up airports and camps—inched from Barrow to Umiat or from Barrow to Cape Simpson, averaging one mile per hour. These tundra trains operated 24/7 with the Cat engines only shutting down for fifteen minutes each day to allow for lubrication. Eight trips were made to Cape Simpson and Umiat, totaling 4,000 miles. Once again the Seabees, using materials at hand, made things work. The freight sleds ran smoothly on skids made of one of the few things found in quantity: oil drilling pipe. Each tundra freighter carried a navigator and was proceeded by Alaskan Scouts who journeyed ahead on dogsleds, marking the trail and seeking safest passage. Scout Andrew Curtin disappeared on an Umiat trip, never to be found. The men composed his epitaph:
RESOURCE DEVELOPMENT SPECIAL SECTION | OIL & GAS
“The difficult we can do at once, the impossible takes a little longer.” Motto, the Fighting Seabees
service in Umiat. For a long time it was the only piece of equipment at the site. It even survived submersion in a lake. In the spring, drill rigs were erect and ready at Umiat and Cape Simpson. The drillers were now just waiting on warmer days. In the summer of 1945, the first Umiat well bit spun down into North Slope soils. By the end of the season, the drill reached 1,800 feet and passed through many layers of oilbearing sands. The Seabees had fulfilled their mission: black gold lay beneath the Alaska tundra. Few Seabees remain from the 1058th, but their 1945 expedition book immortalizes the spirit that carried them through their urgent mission. In the understated way of that generation, their record explains it thus: “This was our goal, our purpose for coming to the Arctic, and that goal has been achieved and that purpose fulfilled. The Reserve contains oil and the amounts and further locations will be determined in the future years, but another great oil producing area has been opened to exploration and development by NCB 1058.” By 1945 the war against Germany and Japan ended, negating the need for vast amounts of fuel. The Navy, seeing the need for smaller forces, determined Alaska oil prospecting should be done by a civilian contractor. A group known as Arctic Contractors (ARCON) assumed the oil watch and the NCB 1058 Seabees scattered to their hometowns throughout America. This wartime Navy Seabee expedition answered foundational questions about Arctic oil drilling. From this foundation, the Alaska oil industry became the safe and prosperous industry we Alaskans know today. Alaskans owe a debt of gratitude to this group of long forgotten Seabees who risked it all to complete their mission. 96 | November 2018
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RESOURCE DEVELOPMENT SPECIAL SECTION | ARCTIC Safety reminder built right into the drilling rig floor. Â© ConocoPhillips
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Facing Arctic weather, heavy equipment, and wandering bears By Julie Stricker
orking in Alaska’s North Slope can be challenging enough, but a few companies are taking that challenge a step further, drilling from manmade islands into promising basins miles off the coast. Going offshore adds
a measure of remoteness and additional hazards to the workplace, such as floating ice, frigid water, and transportation by boat, hovercraft, or helicopter—or tracked vehicle after freezup. It’s still Alaska’s North Slope, so it’s dark for months at a time. Blizzards bring high winds, stinging snow, and wind chills that in 2014 dropped to 97 degrees below zero. Polar and grizzly bears roam the region. In the summer, mosquitoes descend in hordes, backed up by swarms of biting flies. Despite these conditions, a strong safety culture keeps accidents low, says Dave Wulf, vice president of health, safety, and
environment for ConocoPhillips Alaska. “We pride ourselves on our safety culture,” Wulf says. “We’re never happy with our performance. We always want to get better. In the world of safety, until you can sustain that nobody gets hurt and there’s no injuries, you just keep trying harder and harder.”
Training on Training For workers, safety begins before they ever step foot on the North Slope tundra or venture offshore from it. In 1997, the North Slope Training Cooperative was created to develop high-quality standardized health, safety,
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and environmental training programs. The cooperative began as an agreement between BP and ARCO on basic safety requirements for workers. Today, member companies include BP Exploration (Alaska); Caelus Energy Alaska; Conoco Phillips Alaska; Eni Petroleum; ExxonMobil; and Hilcorp Alaska, which fund the program. Contractors for these companies also support the cooperative. Workers must complete a six-part, eighthour training course, referred to as a sixpack, to receive their NSTC card, which allows them to travel on the Slope without an escort. Topics cover camp and safety orientation; environment; hazard communication; hazardous waste operations and emergency response (HAZWOPER); personal protective equipment; and the Alaska Safety Handbook. The Alaska Safety Handbook—produced by the cooperative—covers a wide range of topics, including heavy equipment safety, weather contingencies, travel, confined space work, and flammable hazards. Drugs and alcohol are strictly prohibited in the oilfields.
very aware of what’s going on around them. People take their eyes off the path just for a second and don’t see that tripping hazard, and they trip and they fall on the ice and end up with injuries that include broken bones… We’re really
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all the time.” —Dave Wulf, Vice President of Health, Safety, and Environment, ConocoPhillips Alaska
Offshore Circumstances Most of Alaska’s North Slope oilfields are onshore. However, a few miles off the coast Hilcorp is producing oil at Northstar Island (developed by BP in 1999) and is planning a similar development at the Liberty prospect, six miles offshore east of Prudhoe Bay. Italian oil corporation Eni is working offshore on manmade Spy Island over its Nikaitchuq development, having drilled its first of four proposed wells in late 2017. Caelus Energy built Oooguruk, operated from a gravel island in Harrison Bay. All involve offshore gravel islands with oil transported to the mainland via buried pipelines. There are a few specific safety concerns for offshore operations, covered in an www.akbizmag.com
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“People have to be
RESOURCE DEVELOPMENT SPECIAL SECTION | ARCTIC
A construction crew prepares for the day ahead. © ConocoPhillips
NSTC offshore safety awareness course, which add another three to four hours to the basic NSTC requirements. However, safety recommendations are generally the same across the Slope, although workers on offshore platforms may be required to wear personal flotation devices and additional protective gear if they work near the water. A skiff and ring buoys are also required at the facilities. Workers who are transported by helicopter must wear a Coast Guardapproved exposure suit, fully zipped and buttoned and equipped with a strobe light.
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Offshore safety awareness also includes an introduction to the lifestyle and culture of Alaska Native people who live along the Arctic coast, as well as the region’s unique geography, wildlife, and weather. The Bureau of Safety and Environmental Enforcement oversees the offshore operations. On trips to inspect operations at Northstar, for instance, weather is the prime consideration. Even in summer, sixty degree morning temperatures can plunge thirty degrees in a few hours. Trips are planned up to two weeks in advance in order to catch a good weather window.
That’s an issue onshore, too, says Conoco Phillips’ Wulf. Between October and May, workers are required to carry Arctic-rated gear with them at all times. That includes a parka, insulated pants, Arctic-rated boots, gloves or mittens, face shields and goggles, and other survival gear. Many also wear traction devices on their boots in icy conditions. “Let’s say you’re in a pickup and the pickup dies and you’re out in the middle of the tundra somewhere—you’re going to be able to survive those weather conditions,” Wulf says. That’s standard across the North Slope. Notices are put up every year to remind workers to carry their Arctic gear. In addition, all workers are required to wear standard personal protection equipment such as a hard hat, safety glasses, hearing protection, and sometimes double hearing protection in areas with high noise levels. Flame-resistant or Nomex (a fire-resistant fiber that doesn’t melt or burn) clothing is also required.
Internal Programs While all workers are required to undergo NSTC training, the individual companies working on the North Slope often have their own internal safety programs. “[At] ConocoPhillips we pride ourselves on our internal incident-free culture,” Wulf says. “The motto we say is ‘incident-free, it’s up to you and me.’ The incident-free culture is our framework that puts a common language around HSE [health, safety, environment] not only for our employees but for our contractors.” The company, Alaska’s largest oil producer, operates an internal program that employees must learn. It’s in the process of updating that program to add more
Construction crews perform calisthenics at their morning safety meeting. © ConocoPhillips
ConocoPhillips’ Kuparuk field contains 1,000 wells with three central processing facilities plus a seawater treatment plant. The scale is far larger than at the company’s Alpine field, which contains about 250 wells and one treatment facility. “It’s very easy for people to get their arms around Alpine in their daily planning; they can include everybody because everybody’s right there,” Wulf says.
“Whereas as [at] Kuparuk, you’re spread out around the whole field.”
The Range of Hazards ConocoPhillips’ drill rigs are enclosed and heated, so rig workers’ exposure to the environment is minimal. However, the safety training handbook does cover working in a confined environment and contingency plans for foul weather.
For more than 40 years, Alyeska has safely and successfully moved more than 17 billion barrels of oil through the Trans Alaska Pipeline System. It’s an accomplishment that is not only meaningful to our employees, but to all Alaskans. We look to the future with continued confidence and commitment.
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content on human performance and learning organization, he says. “That’s kind of our next step in our journey: what else can we do to improve our performance,” Wulf says. “We think it’s in that arena of focusing on humans, at how humans perform. And at the same time, looking at how well we really learn from incidents. So that’s the journey we’re on. That’s incident-free culture.” Wulf says the biggest challenge is simply situational awareness. “If you think about what we do, we do it in the worst months of the year as far as weather conditions,” he says. Workers travel on ice roads. Winds can rise suddenly, causing whiteout conditions in which people have to just hunker down and wait for the wind to ease. “People have to be very aware of what’s going on around them. People take their eyes off the path just for a second and don’t see that tripping hazard, and they trip and they fall on the ice and end up with injuries that include broken bones. “We’re really trying to focus in on the human and to keep people in the moment all the time. It’s very hard to do.” Each oilfield is unique and presents different safety challenges. For example,
RESOURCE DEVELOPMENT SPECIAL SECTION | ARCTIC
Workers who are transported by helicopter must wear a Coast Guard-approved exposure suit, fully zipped and buttoned and equipped with a strobe light. Offshore safety awareness also includes an introduction to the lifestyle and culture of Alaska Native people who live along the Arctic coast, as well as the region’s unique geography, wildlife, and weather. Bad weather conditions are divided into phases, based largely on wind speed, temperature, and visibility. Phase 1 is cautionary and put in place when visibility is reduced. Travel is still permitted, with caution, and workers must wear full Arctic gear. Phase 2 is restricted to convoy traffic only. Vehicles must be in radio contact. Phase 3 is restricted to critical or emergency traffic only. Travel by heavy equipment convoy only.
Weather isn’t the only hazard. The North Slope is home to a healthy population of both grizzly and polar bears, muskoxen, fox, wolves, and caribou. While caribou aren’t predators, they can still pose a hazard. In 2017, a plane that was trying to land at the Deadhorse airport had to take evasive action to dodge a caribou in the middle of the runway. The plane’s landing gear clipped the caribou, beheading it, but the plane circled and landed safely. Polar and grizzly bears also pose a threat. Offshore and near the coast,
polar bears may be drawn to the water by seals. On Northstar, fences and other physical barriers are used to keep bears away from the production facilities and workers. Thermal imagery cameras alert workers to the presence of bears. If a bear is seen, workers follow a standard protocol. First, they move to a safe place and alert security. Since polar bears are considered a marine mammal, only designated security officers with special training are allowed to deal with the bear. They use nonlethal deterrents, such as flashlights or air horns,
ALASKA IS OUR FUTURE THE ARCTIC IS OUR HOME WE’RE THE TEAM BEHIND THE SCENES INSPECTING THE VALVES GRADING THE ROADS HAULING THE FLUIDS TESTING THE WELLS KEEPING THE OIL FLOWING …WE CAN GO ON AND ON
104 | November 2018
Taking Care of Everyone Bear awareness also protects the bears. Anytime ConocoPhillips has to work out in the field in the winter, they fly in using forward-looking radar, which
can detect polar bear dens in the snow when sows and cubs are hibernating. “There are stipulations for when we’re putting in a pipeline and we come within so many feet of that den, we may need to re-route,” Wulf says. “So it’s very important we fly these things before we nail our plans down and are breaking stone.” While the company culture includes rules for responsible and safe wildlife interactions, it also fosters a culture of teamwork and engagement. Interpersonal conflicts, which seem likely considering the remote and enclosed environment, are actually rare. Wulf says he believes that is because of ConocoPhillips’ company culture. Wulf has spent thirty-one years with ConocoPhillips in different places. He’s only been in Alaska for two years, but he says the culture here is apparent. “What has impressed me the most in the first year is the amount of teamwork, and I think it’s because we’re remote that we rely heavily on one another,” he says. “If we’re up on the Slope, I don’t know most of the time if I’m talking to a ConocoPhillips’ person or a contractor because they all blend in the same. Everybody is treated the
A worker all geared up for winter construction including extra gear for visibility and warmth. © ConocoPhillips
same. Probably equally impressive is people are engaged. There have been times in my career where I’ve felt I’ve been trying to push safety down peoples’ throats, but in Alaska, people own it. And it’s real. You can feel it when you go out there. “Although we’ve had ups and downs, they’ve never wavered on that. It’s the independence that Alaskans have compared to the Lower 48. We don’t have the luxury of just picking up and running down the street. So they have to make do a lot of times.”
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escalating to beanbag rounds or rubber bullets to haze the bears into leaving. Fairweather trains bear guards for oil companies and scientific excursions. Operations Manager Guy Miyagishima says bear encounters are relatively rare. While onshore polar bears rarely stray far from the coast, grizzly bears frequent the areas around the oilfields. In 2011, a polar bear was fatally shot when it approached employee housing at a BP Alaska site. Wulf says ConocoPhillips hasn’t had any bear encounters in quite a while. “I think the reason it’s so good is everyone is very respectful of wildlife and they get the right-of-way,” he says. “When we run into issues, whether its Arctic fox or red fox, people are very well trained that they need to notify [security], and there are procedures if we have to haze them. But it hasn’t happened since I’ve been around. “I think we’re very proactive in wildlife management.”
H E A LT H C A R E
Wellness in the Workplace Isn’t a Luxury By Isaac Stone Simonelli
ong before clinical depression or suicidal tendencies take hold of a person, the mental health of an employee can impact a business, large or small.
Wellness at Hope “For-profit organizations that have wellness programs make more money— straight up,” says Rick Benjamin, the director of organizational and spiritual wellness at the secular, nonprofit organization Hope Community Resources. “That makes the point that this whole wellness thing isn’t just a nice thing or a feel-good thing, it’s very practical. If people are better, they do better work— and the for-profit business makes more money. So businesses that have wellness programs aren’t just nice, they are actually smart.” Hope provides services to individuals and families who experience intellectual and developmental disabilities, traumatic brain injury, and mental health challenges. But when it comes to supporting these individuals and their families, the process really starts with ensuring the mental wellness and quality of life of Hope’s employees. The wellness initiative at Hope started in 2001 as an intervention to create a healthier, more respectful workplace for employees, Benjamin explains. “In the meantime, we hope that it’s become a culture, not just an intervention, but kind of a way of life for employees and everyone else, including people 106 | November 2018
Personal challenges can affect your employees’ job performance, not to mention their health and overall well-being
4 out of 5
US employees’ financial issues impact their job performance resulting in increased stress, lack of focus, absenteeism and tardiness
Employees in the US lose sleep worrying about adequate childcare
US employees have difficulty managing work and family responsibilities
People in the US need treatment for an illicit drug or alcohol abuse problem
People in the US live with a mental health issue
who come for services,” he says. A wellness seminar is now part of the onboarding process for new employees, with a longer follow-up session three months down the line. “We just wanted employees to feel valued and recognize that in the field of social service you need to take care of yourself. Part of the wellness strategy is helping staff develop their own personal wellness plan so that they have a strategy,” says Michele Girault, quality of life director of workforce development and organizational wellness at Hope. “Employees need to recognize that conflict is normal, stress can be normal, and taking care of yourself is normal—it’s okay to take care of yourself.” In addition to the wellness culture and seminars, the company also provides an employee assistance program, which is a counseling and therapy resource. Working with local counseling therapy providers, Hope employees can reach out for help while Hope picks up the bill for up to three sessions per issue faced by the employee. “It’s totally anonymous. All we get is a bill,” Benjamin says. “Often times, staff are dealing with their own personal issues—
Americans living with at least one chronic health condition
People in the US need treatment for an illicit drug or alcohol abuse problem
6 in 10
Caregivers report having to make a workplace accommodation as a result of caregiving
family, grief, family dynamics, or just the day-to-day job stress—and they just need someone to talk to outside of work. That’s what that provides. “These are just talks—if they need a deeper dive, they are referred out to another therapist.” For 2018, Hope received a $10,000 grant from insurance company Aetna to assist with its wellness program, and the company received a grant again for 2019.
Structured Wellness Initiatives Aetna provides a number of resources for employers wanting to promote employee wellness and mental health, including the Mindfulness Challenge, Aetna Resources For Living Employee Assistance Program, and Mental First Aid. “Aetna recognizes both the need for and the value of creating a psychologically safe and healthy workplace,” says Greg Haley, Aetna’s vice president of sales and service. “Through an exclusive collaboration with the National Council for Behavioral Health, we are pleased to offer Mental Health First Aid training. “Mental Health First Aid is a high impact, evidence- and skills-based training
Mental health programs aren’t just nice, they’re smart
Rick Benjamin, the director of organizational and spiritual wellness at the secular, nonprofit organization Hope Community Resources, poses on Wellness Street. Deloris Benjamin
November 2018 | 107
program that teaches employees and/ or managers how to offer help to a person developing a mental health concern or experiencing a mental health crisis. Similar to CPR, the first aid is given until appropriate treatment and support are received or until the crisis resolves.” Mental Health First Aid training is available in both eight-hour and fourhour programs, with the longer program providing more in-depth information about some mental disorders and many more exercises, as well as covering the additional topics of trauma and nonsuicidal self-harm. At the end of the program, each attendee receives a Mental Health First Aid certification, which is valid for three years. “Aetna’s enterprise strategy is to create a more connected, personalized, and convenient healthcare experience for our members—one that cares for the whole person physically, mentally, and emotionally,” Haley says. “Research demonstrates that a psychologically healthy workforce is productive, creative, and engaged. It also tells us that untreated mental illness costs the US a minimum of $105 billion in lost productivity
“If people are better, they do better work—and the for-profit business makes more money. So businesses that have wellness programs aren’t just nice, they are actually smart.” —Rick Benjamin, Director of Organizational and Spiritual Wellness, Hope Community Resources
each year. Mental illness is estimated to result in 35 million work days lost each year, and almost 50 percent of managers have no training in managing workers with mental health issues.” To shore up this hole in the market and the ensuing damage to employees and companies, Aetna has a business model whereby a company can purchase wellness products on a standalone basis. “In some cases, these programs are included in another Aetna medical product. In this case, we know that supporting the emotional health of our members leads to better health overall, which is a financial benefit to all,” Haley says. Another service offered by the company
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is the Aetna Behavioral Health’s Condition Management program, touted as “an innovative approach to engaging members in their own recovery.” “Behavioral health conditions do not neatly fit into single categories. Many conditions can overlap each other,” Haley explains. “This program uses an integrated approach that follows an evidence-based, holistic model. We engage our members and their families struggling with acute and chronic behavioral health conditions.” The primary objectives of the program are to identify and engage members who have a diagnosis with high-risk, acute, and chronic behavioral health conditions. These conditions include depression, anxiety, bipolar conditions, psychotic disorders, eating disorders, and alcoholrelated problems, as well as other substance abuse issues. “Once enrolled, members receive support to promote active engagement and adherence with evidence-based treatment and behavior change to improve overall functioning and wellness,” Haley says. “This program recognizes that one condition may affect the successful treatment of the other. To be effective, we promote active collaboration and coordination between all who are involved in the member’s medical and behavioral healthcare and treatment, including other Aetna clinical programs, treating providers, and family/supports.” While it’s not a standard practice currently, some businesses now approach mental health issues as not being fundamentally different than physical issues; a broken bone is the same for HR as depression. This has led to some organizations, such as Hope, taking a holistic view of their employees and their clients for years—and some are doubling down on such endeavors. “In this past year, going into this next year, we’re trying to put additional focus
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on the all-encompassing wellness, which includes the spiritual, wellness in your body, wellness in your mind, financial wellness—all aspects,” says Karen Fritsche, an HR specialist at Hope.
Whole-Person Health Another workplace taking a holistic approach to wellness, including spiritual wellness, is Providence Alaska Medical Center. “We care for the spiritual and emotional needs of our patients and their loved ones, as well as our caregivers here at the hospital,” says Chaplain Susan Halvor, manager of Spiritual Care at Providence Alaska Medical Center. “We do a lot of staff support here at the hospital, and I always like to emphasize to people that our job is never to convert or to proselytize. Our goal is to meet people exactly where they are and try to find the things that give them hope, that give strength and light, and help support those things.” Hospitals can be mentally, spiritually, and physically taxing places to work. And when there are challenges—from a death in the maternity ward to a co-worker dying of cancer—a hospital chaplain works along with a social worker or mental health clinician to debrief those impacted by the event. “We’re able to respond to critical events, and sometimes that’s a group debriefing, sometimes that’s an individual debriefing,” Halvor says. “We see a lot of suffering at the hospital. It’s pretty intense work, so anything that rises above the ordinary, we have a debrief team that can help respond to that.” Because emergency room doctors and hospital caregivers are so likely to experience workplace violence and are often at a higher risk for suicide, taking steps to ensure the mental and spiritual wellness of these employees is absolutely necessary, Halvor says. But Halvor, who has been with Providence for about twelve years, recognizes that some hospital employees will never feel comfortable opening up to chaplains or staff social workers. To make sure those employees still have the resources they need, she’s helping to launch peer support teams at the hospital. “What we’re doing is trying to identify our clinical employees, nurses, therapists, and social workers who are already go-to people on their floor. These are people who, when something goes 110 | November 2018
wrong or is hard, everyone naturally gravitates to.” Once identified, these individuals are being offered additional training with regard to listening skills, knowing what resources are available, and how to establish and identify healthy boundaries when helping co-workers. “So we’re just trying to provide as many opportunities as possible so that there are people to talk to, debrief with, and, when there is a greater need—maybe if there is depression or suicidal feelings or intense needs involved—that we can also refer them to the appropriate place,” Halvor says. Maintaining the mental and spiritual wellness of staff can do a lot to curb turnover and keep good employees happy and working for a long time, Halvor notes. “Making sure that people feel cared for and have the support they need means they’re also going to do better work,” she says. In addition to the non-formal support chaplains provide to hospital employees, Providence also provides a caregiver assistance program that is not limited to mental health. “It’s available to help a caregiver find child care; provide guidance on overcoming financial challenges; locate a substance-abuse treatment resource; get access to couple’s counseling; get help with a legal issue; or find help in dealing with depression or other mental health matters,” explains Mikal Canfield, the senior manager of external communication for Providence Health and Services Alaska. Providence also works with its employees to help them understand causes, symptoms, and measures to prevent burnout at work and/or compassion fatigue.
Fitting Wellness to the Organization Though many of the programs and resources available to employers looking to provide better mental health support for their employees require an investment, not all of them do. In fact, Hope “shares Rick [Benjamin] a lot” and is willing to do so even more in 2019. “He’s gone out and done wellness seminars for other agencies and gotten them interested in how they could
potentially replicate the idea or collaborate with each other,” Girault says. Benjamin explains that often these seminars start with him sharing the story of the employee wellness program at Hope. “We just always say: ‘First of all, wellness and self-care have to start at the top. So the key leader has to believe in it, model it, and want it to happen in the organization. And secondly, you don’t have to have a staff person like me or even an HR department. It can be a small organization but still have a culture that encourages everyone who works there to take care of themselves—it doesn’t have to cost money.’” Benjamin and Fritsche agree that a business can’t mandate wellness—despite the impact employee wellness has on a company’s bottom line. “There’s an ethical line here that we’ve talked about [at Hope]. You can’t make people be healthy, and you can’t punish them if they’re not,” Benjamin says. “Sometimes I think wellness initiatives do cross that line. You feel like you can’t work here if you’re overweight or if you drink diet coke or if you smoke cigarettes. So we’re really careful about that.” Though some companies do choose to tie wellness initiatives to health insurance premiums, Hope has decided not to pursue that route. “For us, it’s really been creating the culture where each individual feels appreciated,” Girault says. “When you work with people with disabilities who experience a lot of disrespect in their life because people devalue them as a person, we don’t want to create an organization that in any way devalues people.” Better serving the mental health needs of employees is particularly important in an Arctic region, such as Alaska, where people are highly impacted by seasonal affective disorder. “I think when you look at our Alaskan statistics around depression, around suicide, around alcoholism, around domestic violence, everything is connected,” Halvor says. “And we certainly see all of this in the hospital, not just with our patients. I think it’s really important that in the location we’re in … a place with dramatic changes in light and darkness—and this is a heavy drinking state—I think [mental wellness initiatives] are especially important here.”
Curtiss Clifton THE MEETING: United States Academic Decathlon National Competition April 22 - 25, 2020 900 delegates Estimated Economic Impact: $893,373
urtiss Clifton, pictured fourth from right, works with some smart folks. As Alaska director for U.S. Academic Decathlon, he helps high school teams demonstrate their academic mastery in competition. He also knows that when it comes to hosting meetings, Anchorage makes the grade, with high marks for amenities, convention centers and visitor satisfaction. Clifton explained Anchorageâ€™s appeals, and made the case to host an upcoming student competition. As a result of his efforts, the United States Academic Decathlon National Competition is coming to our city for the third time.
ARE YOU A MEMBER OF AN ASSOCIATION? CONTACT VISIT ANCHORAGE TO BRING YOUR GROUP TO TOWN: MEETINGS@ANCHORAGE.NET | 907.257.2349
EET I N
A L A S K A N AT I V E
Showing Off the Last Frontier
Sharing Alaska’s lands and cultures
By Vanessa Orr
112 | November 2018
n a state in which tourism is a major economic driver, it’s not surprising that Alaska Native corporations would establish and operate their own visitor attractions. What sets them apart— whether running lodges deep in Denali Park, operating the Kodiak Brown Bear Center in the Karluk Basin, or running
a tram to the top of Mt. Roberts in downtown Juneau—is their emphasis on culture in every aspect of what they do. “One of the biggest advantages of our tourism products is the element of being Alaska Native-owned and -operated; we represent more than just summer tourism in Alaska,” says Marie Monroe,
“Our goal is to employ Alaskans—first our shareholders, then other Native company shareholders, and then Alaska residents.” —Marie Monroe General Manager, Kantishna Roadhouse
Emmitt Peters Jr. and Molissa Bifelt in beaded moosehide regalia in front of the old Recorder’s Cabin at Kantishna Roadhouse. Doyon Tourism
Wonder Lake is only a short hike from the Kantishna Roadhouse. Doyon Tourism
general manager for Kantishna Roadhouse, owned by Doyon, Limited. “People staying with us want to learn more about our culture and to know that they are getting an authentic Alaska experience from an authentic Alaskan business.” “Our heritage and history is at the forefront of everything that we do,” agrees Elliott Wimberly, president and CEO of Goldbelt, Inc. “It is clear to visitors, our employees, and everyone who does business with us that we are an Alaska Native corporation.”
Location, Location, Location? In most cases, tourism businesses choose their locations in places where they know people want to visit and where it is fairly easy to attract large numbers of customers. This is not always www.akbizmag.com
the case, however, when the destinations involve Alaska Native Claims Settlement Act (ANCSA) lands. “Traditional marketing is all about location, location, location,” explains Jon Panamaroff, CEO of the Kodiak Brown Bear Center, owned by Koniag. “But because of where our land is located, we needed to create a marketing and business model that has visitors coming to us instead of us going to them.” The Kodiak Brown Bear Center and Karluk River Cabins are located on 112,000 acres that Koniag owns in the middle of the Kodiak National Wildlife Refuge. Only accessible by helicopter or float plane, the location attracts about 120 people a year looking to stay at its high-end, luxury cabins. “Alaska Native corporations are culturally and socially bound to take care of the lands that we received from our ancestors, and the beauty of the Karluk Basin and our tribal lands presented an opportunity,” Panamaroff says. “Our leadership chose to maintain and develop the land as a way to meet our responsibilities to our shareholders and community and to share it, and our culture, with the world.” According to Panamaroff, the center’s success is a result of following Koniag’s six core values that direct all operations from the corporate to the subsidiary levels. “These fundamentals, like community strength and stewardship of natural resources—living eco-friendly and only Alaska Business
utilizing the resources that we need—are good business practices as well as our cultural practices,” he says. “Our culture is ingrained in us as a community and as a people,” he adds. “We strive to maintain our cultural relevance by using our art and language at our location; for example, there are Alutiiq words on all of the cabins, and the alphabet is on the walls. It’s built-in as an aesthetic but also serves to educate our visitors at the same time.” Doyon has also succeeded in attracting visitors to its remote attractions, which include the Kantishna Roadhouse, located 90 miles inside Denali National Park. In addition to staying at the full-service backcountry lodge and cabins, tourists also have the option of taking a day trip on a private bus to tour the Kantishna mining district as part of the company’s Kantishna Wilderness Trails package. “Back in 1995, our thirteen-member board decided to diversify from oil and other businesses—though we are still quite involved in those—because tourism at that time was becoming more vibrant in Alaska,” says Monroe. “We decided to get our toes wet by purchasing the Kantishna Roadhouse, which features twenty-seven full-service cabins and a lodge.” Doyon also owned Denali River Cabins for a time but sold it in 2013. “This was a very different, much larger venture at the entrance to Denali Park that included 102 rooms and a full-service restaurant and focused on overnight stays versus our minimum two-night stay at Kantishna,” says Monroe. “We decided that it was not the right genre for us, as we preferred the more remote, full-service lodge environment.” November 2018 | 113
The Kantishna Roadhouse is located ninety miles inside Denali National Park and features twenty-seven full-service cabins and a lodge. Doyon Tourism
Visitors to the roadhouse are given the opportunity to learn more about Native culture, which is one of the reasons that Monroe says they book their stay in the first place. “If people are seeking to learn about our culture, they will find it incorporated subtly in many ways,” she explains. “For example, on hikes we share the Native words for the plants we see. Native culture is reflected in the notebooks that we leave in the rooms, and on the names of buildings, and in the products that we sell in our small gift shop. And because of shareholder hire, guests get to meet people who live in Alaska year-round.” Unlike Doyon and Koniag, Goldbelt’s major tourist attraction is located in the heart of downtown Juneau, where it is the most visible component of the company’s offerings. “The Mt. Roberts tram is our marquee business in Juneau and has been an economic engine for Goldbelt and for the area for a long time,” says Wimberly. “We have seen increasing passenger traffic to the tram as a destination, as well as seen an increase in visitors from cruise ships.” Goldbelt also operates the Seadrome Marina, catering to large pleasure boats that come in for provisioning and refueling, and offers seasonal work through Goldbelt 114 | November 2018
Security, which provides crossing guards and physical security for local businesses. “While this is not viewed as a tourist activity, like the Mt. Roberts Tram or the Seadrome, it is a necessary service that we provide to the city,” says Wimberly. Tourism was a logical progression for Goldbelt, which started in the timber industry after receiving its ANCSA allocation of land. “After the initial timber harvest on Goldbelt land, tourism was the obvious solution as to what to do next,” Wimberly says. “We invested in the syndicate that established the tram and then bought out the other partners; we’ve successfully operated the tram for twenty-two years. “Part of the reason for our success is that we offer a good product for a reasonable value,” he adds. “Tourists arrive and want a unique experience, and we take them from sea level to 1,800 feet above the city where they have an amazing panoramic view. We also entertain them and educate them about our culture—first and foremost, our goal is to provide an accurate presentation of the history, culture, and message of the Tlingit people in Southeast Alaska, and we have built the venue around that.” “We incorporate Tlingit culture throughout their visit,” adds McHugh
Pierre, vice president of operations for Goldbelt. “We have a greeter in regalia singing and dancing, and we share stories about Tlingit names and our language on the tram car. We have carvers and artisans at the top of tram, and we’re developing a totem park that will include two trail markers made by master craftsmen.” Goldbelt also encourages local craftspeople to display their work in the Raven Eagle Gift & Gallery onsite. Because all of these tourism properties are privately owned, they don’t receive money from the state, so it’s important that they continually target local, national, and international travelers. They do so mainly through social media and working with tourism orga-
The Mt. Roberts Tram takes visitors from sea level to 1,800 feet above downtown Juneau. Goldbelt
nizations including the American Indian Alaska Native Tourism Association and the Alaska Travel Industry Association. In the case of the Kodiak Brown Bear Center, the company also works with photographers and film companies, like Nat Geo WILD, to publicize their offerings.
“Our heritage and history is at the forefront of everything that we do.” —Elliott Wimberly President and CEO, Goldbelt
Shareholder Hire One of the draws of Alaska Native tourism operations is that they staff their attractions with the people who know the area and the culture best— Alaska Native shareholders and their descendants. “We advertise almost exclusively through our parent company’s website, Doyon.com, to hire our employees,” says Monroe, adding that Doyon has a 30 percent to 40 percent shareholder hire rate. “Our goal is to employ Alaskans—first our shareholders, then other Native company shareholders, and then Alaska residents.” Approximately 80 percent of the team at the Kodiak Brown Bear Center are Alutiiq and are shareholders of Koniag or other Alaska Native corporations. In addition to providing employment, Koniag also provides hundreds of scholarships to students to help them prepare for future
careers, including in the tourism industry. “Instead of having to find the next generation of leadership, we’re creating it,” says Panamaroff, who also serves as the president of the board of directors for the Koniag Educational Foundation. “We are working to develop leadership not just within the Native community but throughout the Alaska community. We hire Alaska Natives, but also native Alaskans as well.” Goldbelt also places a priority on shareholder hire, with shareholders making up approximately 67 percent of its tourism employees. “Our key management positions are year-round, which brings consistency to our delivery of services,” says Wimberly. “Our seasonal employees are made up of local folks and others who come into Juneau to take seasonal jobs in the sum-
mer, like college students with some link to Alaska. We put out the call early in the year and have staff orientation and training completed before the first passenger ever arrives.”
To Grow or Not to Grow As many places around the world are experiencing an influx of tourists—some even closing destinations or limiting visitors due to overwhelming demand— Alaska Native tourism companies are watching and taking note. “When dealing with the impact of increased tourist volume in Southeast, you have to weigh the risk versus the reward,” says Wimberly. “The season is only 150 days, so an investment in that kind of opportunity needs to show a return quickly. “But these are good challenges,” he
Reaching for the Future—at the Speed of Light. Quintillion’s fiber network is transforming northern Alaska communities. And that’s just the start.
From telemedicine to virtual classrooms and on-line training programs, isolated communities from Nome to Utqiagvik are starting to leverage Quintillion’s new 1,200-mile subsea fiber-optic system to the benefit of their patients, students and consumers. The first-ever submarine cable system in the North American Arctic provides access to Gig-E and higher services to telecommunications providers while reducing the cost of backhaul infrastructure compared to existing satellite and microwave technologies. Quintillion has connected these communities by building a new 500-mile terrestrial fiber system from Fairbanks to Deadhorse. And we’ve added capacity and diversity for the Prudhoe Bay oil fields. We’re not done yet. Quintillion is exploring opportunities to connect other remote Alaska communities. In the near future, we plan to extend to Europe and Asia, providing diversity for the flow of information in and out of Alaska–and creating new opportunities, including advanced systems to support our national defense and a North American Arctic data center in this fast-developing part of the world. The future is bright–and fast. And we’re just getting started.
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“Our leadership chose to maintain and develop the land as a way to meet our The Kodiak Brown Bear Center works with photographers and film companies, like Nat Geo WILD, to share their destination with prospective visitors. © Natasha Panamarioff
responsibilities to our shareholders and community and to share it, and our culture, with the world.” —Jon Panamaroff CEO Kodiak Brown Bear Center
adds, noting the introduction of the first Panamax ship this year, which is increasing passenger volumes. “We’ve made changes in the tram venue to accommodate larger crowds, and we have plans to expand this throughout next year.” Because of their remote locations, neither Doyon nor Koniag is worried about being overrun by tourists, but they are staying abreast of current trends and adjusting course as needed. “While the roadhouse continues to hum along, changes to the board and the economy have led us to diversify into government contracts, so for now, tourism is taking a back burner,” says Monroe. “We’re not expanding at the moment because our primary focus is on building, leasing, and operating oil rigs, but if there’s a downturn in oil, we might branch out a little more.” “Because our model is different, we’re not looking to have a high turnover in visitors; we’re focused on exclusivity,” says Panamaroff, adding that people will pay a premium to immerse themselves in this type of environment instead of a more commercialized venture. “We are very cognizant about the overutilization of our traditional lands, so we’ve created a unique, one-of-a-kind opportunity. We 116 | November 2018
do not want to disturb the bears—we are their guests; they are not ours.” The Kodiak Brown Bear Center is planning to build a 2,000-square-foot gathering room with a commercial kitchen that will allow them to strategically expand into hosting corporate retreats, youth camps, and not-forprofit groups in the future, all the while continuing to focus on its core mission. “As the economy struggles and the state faces a financial downturn, Native
tourism corporations are pivotal when it comes to preserving our people, communities, lands, and culture,” Panamaroff says. “These types of projects may have a smaller return on investment, but they provide jobs and sustain our villages, and this is something that our leadership takes very seriously. It’s not just nice corporate citizenship; it’s a requirement as Alutiiq people.”
Broken Ear makes an appearance at the Kodiak Brown Bear Center. © Natasha Panamarioff
Visitors to the Kodiak Brown Bear Center get a chance to see numerous bear, including Broken Ear’s cub. © Natasha Panamarioff
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Seasonal Shopping T
here’s little worse than an under-utilized PFD check— if there’s any unused PFD money still rattling around in your account (or pocket), make sure to schedule time to visit one of Alaska’s many craft fairs in November, all of which highlight Alaska artisans, products, and services—just in time for the holiday season. This is the 50th anniversary of the Annual University Women’s Association Holiday Bazaar, which features local arts and crafts at the Pioneer Park Civic Center in Fairbanks on November 3-4. www.uaf.edu/uwa The Bad Girls of the North Bazaar takes place this year
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on November 2-3 at the Lakefront Anchorage and November 9-10 in Wasilla at the Mat-Su Resort, offering up jewelry, handcrafted soaps, silk scarves, handmade clothing, pottery, leather purses, metal art, gourmet foods, home décor, and one-of-a-kind artwork. badgirlsofthenorth.com The Coffman Cove Holiday Bazaar is located at the Howard Valentine School on November 10. The Bazaar features crafts, food, and fun and is sponsored by the “By The Sea” Arts & Seafood Festival Committee. Attendees can bring food items for donation to the Food Bank. ccalaska.com/ events/holiday-bazaar/ In Wasilla at the Curtis Menard Sports Center, the Mat-Su Holiday Marketplace takes place November 3 and 4. This bazaar is a one-stop holiday
shopping extravaganza for the Valley, presenting an opportunity to shop for unique and one-of-akind gifts from more than one hundred vendors. fairbanksevents.com/mat-suholiday-marketplace The Christmas Arts & Crafts Emporium is scheduled for November 1718 at the Dena’ina Center in Anchorage. This fair features strictly Alaskan-handmade items including clothing, jewelry, bath products, home décor, gourmet food, and more. anchoragemarkets.com The Fairbanks Holiday Marketplace is held at the Carlson Center in Fairbanks and in 2018 runs November 9-11. This is a convenient, local shopping bazaar for Fairbanks residents and features everything from hand-made soaps to beaded jewelry and imported wool sweaters.
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Juneau Arts & Culture Center. juneaupublicmarket.com
The Alaskan Christmas Bazaar takes place this year on Saturday, November 10. With more than one hundred vendors from all over the state of Alaska selling their handmade, distinctive items, this bazaar is the perfect place to begin holiday season shopping, taking place in Anchorage City Church. alaskanchristmas.com
Ketchikan Arts and Humanities Winter Arts Faire takes place on November 24 and 25 at the Saxman Community Center. Guests can check off their entire gift list with new creations from more than eighty local artisans and kids can explore and learn at the Imagination Station while their parents shop. ketchikanarts.org
Juneau Public Market is held at both Centennial Hall and the Juneau Arts & Culture Center on November 23-25. The market has taken place every Thanksgiving weekend since 1983 and includes arts, crafts, imports, photography, and wearable art, as well as food and a visit from Santa. Three-day admission to Centennial Hall is $7.50; admission is free the Public Market Annex in the
On November 25, Downtown Anchorage is participating in Shop Small Business Saturday, a national event to promote shopping at local, small businesses. For 2018 Small Business Saturday will be followed by the Holiday Tree Lighting in Town Square Park. The Anchorage Downtown Partnership is gathering small businesses to offer deals, specials, and more. anchoragedowntown.org
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NOV General Election 6 The 2018 General Election takes place Tuesday, November 6. Every Alaskan is affected by election results, so Alaska Business highly encourages every eligible resident to participate by voting. elections.alaska.gov
artists. Northern cuisine, from reindeer sausage to poké bowls and other food, will be available for purchase from local food trucks, and cash bars will be placed throughout serving local beers, craft cocktails, and wine. Open to patrons twenty-one and older. anchoragemuseum.org
NOV Animal 17 Masquerade
NOV Big Band Bash 10 Join the Alaska Aviation Museum at the Egan Civic & Convention Center for the Big Band Bash. This 1940s-themed dance includes vintage photos, a photo booth, live and silent auctions that benefit the Alaska Aviation Museum, and a sitdown dinner. alaskaairmuseum.org NOV The ‘Great Wide 10 Open’ Party National and local bands, Arctic hip-hop artists, and DJs are featured at Anchorage Museum’s annual fall party, headlined by national touring act The Cave Singers. Galleries are activated with music, hands-on activities, and
Join Williwaw for its fourth annual Animal Masquerade with award winning British duo SNAKEHIPS, creators of global smash hits, Don’t Leave, All My Friends, Cruel, and more. A free animal mask is provided at the door (while supplies last). williwawsocial.com NOV Skinny Raven 22 Turkey Trot The annual Turkey Trot, sponsored by Skinny Raven, is back and warmer than ever. The event will stage and finish inside the Dena’ina Center so runners can stay warm. Adults run a one-loop 5K and young runners complete a 3K. Turkey Trot collects food items and will match cash donations (up to
$1,000), all of which is then donated to the Food Bank of Alaska. skinnyraven.com/event/turkey-trot
NOV-DEC Anchorage 30-9 International
Film Festival This festival is a thought-provoking showcase of some of the best independent films and videos from around the world. Hundreds of volunteers, filmmakers, artists, sponsors, partners, and supporters make it possible to put on this two-week event every year. anchoragefilmfestival.org
NOV Gwich’in 14-17 Athabascan
Fiddle Dance Get your jig on and learn the two-step, double jig, duck dance, rabbit dance, and more at the Morris Thompson Cultural and Visitors Center. Dance lessons are available all four nights from 7 p.m. to 8 p.m. for those unsure of the steps. morristhompsoncenter.org NOV Thanksgiving for 17 the Birds Visitors can make bird feeders and learn about winter birds and how to feed them at Creamer’s Field Farmhouse Visitors Center from Noon to 4 p.m. friendsofcreamersfield.org NOV Costco Opening 20 The new Costco, located at 48 College Road, opens on Tuesday, November 20. Attendance is free and open to the public; shoppers must be a member to purchase merchandise. explorefairbanks.com
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NOV Alaska Bald 7-10 Eagle Festival
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Many festival activities are located at the American Bald Eagle Foundation museum such as wildlife workshops, tours, and presentations. There are also visits to the Alaska Bald Eagle Preserve to witness the “Gathering of the Eagles,” where usually more than three thousand eagles can be found this time of year. baldeagles.org/festival
NOV Christmas Comes 23 to Kenai The kick off for the holiday season begins with Santa, an electric lights parade, and fireworks at the Kenai Visitor and Cultural Center. Santa arrives at 11 a.m., the parade begins at 6 p.m., and fireworks start at 7 p.m. kenaichamber.org
NOV Festival of Lights 23 and Community
Tree Lighting The lighting of the seventy-foot Community Christmas Tree is celebrated with hundreds of people parading with Santa, carrying lightsticks or candles. Complimentary hot cider is available. The tree is provided by the Public Works crew and the lighting of the tree and the decoration of the downtown power poles is done by the Petersburg Power and Light crew. petersburg.org
NOV Devil’s Thumb 23 Brew Fest Bring on the beer, bring on the wine! Lug in those chili pots and get ready to rock and roll at the Annual Chili Feed and Brewfest at the Sons of Norway Hall. Participants will be awarded prizes for the beer and wine by “real” judges and People’s Choice awards for the various categories of chili (which change from year to year). petersburg.org/festivals-and-events
NOV Mat-Su Orchestra 11 in Concert Presenting Remembrance, a centennial celebration of Armistice Day. Armistice Day celebrates the cessation of hostilities on the western front of WWI, took place at the 11th hour of the 11th day of the 11th month 1918. The concert is free and will feature composers of the WWI era. Donations are welcome and benefit Skeetawk, an alpine ski area run by Hatcher Alpine Xperience, a local non-profit, memberdriven organization working to bring lift-access downhill skiing, boarding, and other alpine sports to Hatcher Pass. glennmassaytheater.com
BUSINESS EVENTS NOVEMBER NOVEMBER 1-4
Sitka WhaleFest Sitka: P resented by the Sitka Sound Science Center, WhaleFest is a science festival that celebrates marine life. At the core of the festival is a unique science symposium blending local knowledge and scientific inquiry concerning the rich marine environment of our northern oceans. sitkawhalefest.org NOVEMBER 2-3
All Alaska Pediatric Symposium Hotel Captain Cook, Anchorage: The All Alaska Pediatric Partnership supports and links healthcare services between government, healthcare entities, social services, and payers for children and families. a2p2.org NOVEMBER 4-10
Alaska Miners Association Conference Dena’ina Center, Anchorage: The fall convention includes technical sessions, short courses, a trade show, and networking opportunities. alaskaminers.org NOVEMBER 7-10
AGC of Alaska Annual Conference Hotel Captain Cook, Anchorage: The mission of AGC of Alaska is to advocate for their members and the Alaska construction industry; to provide educational
opportunities for their members; and to make the public aware of their members’ skills, responsibility, and integrity. agcak.org NOVEMBER 8-11
AASB Annual Conference T he mission of the Association of Alaska School Boards is to advocate for children and youth by assisting school boards in providing quality public education, focused on student achievement, through effective local governance. aasb.org NOVEMBER 12-13
AAMC Conference Hotel Captain Cook, Anchorage: The Alaska Association of Municipal Clerks is an organization that focuses on providing educational training and mentoring and professional growth opportunities. alaskaclerks.org NOVEMBER 12-16
Alaska Municipal League Local Government Conference
and growing a successful business in the mariculture industry. alaskashellfish.org
RDC for Alaska Conference R DC’s purpose is to link various industries together to encourage a strong, diversified private sector and grow Alaska through responsible resource development. akrdc.org NOVEMBER 27-30
Alaska Tribal Conference on Environmental Management Anchorage Downtown Hilton: Organized by the Alaska Native Tribal Health Consortium, this annual gathering brings together Tribes, nonprofits, and state and federal organizations for a week of environmental conversations. atcemak.com DECEMBER DECEMBER 2-5
ALASBO Annual Conference Anchorage: A nnual conference of the Alaska Association of School Business Officials. alasbo.org DECEMBER 7-9
ASGA Annual Conference
Hotel Captain Cook, Anchorage: The Alaska Municipal League is a voluntary, nonprofit, nonpartisan, statewide organization of 162 cities, boroughs, and unified municipalities, representing more than 97 percent of Alaska’s residents. akml.org
Cape Fox Lodge, Ketchikan: The Alaska Shellfish Growers Association conference includes a banquet, movie viewing, and oyster tasting. It also includes the ASGA annual business meeting; a tour of local farms; discussions about oyster and kelp farming regulations;
JANUARY 2019 JANUARY 10-12
Alaska Wholesale Gift Show Dena’ina Center, Anchorage: This event provides an opportunity for small business owners/producers to grow their buyer base, meeting face-to-face with other business owners, buyers, and managers. There are show specials on hotels, car rentals, travel concierges, and more. 10times.com/wholesalealaskan-gift JANUARY 18
Meet Alaska Conference Dena’ina Center, Anchorage: Hosted by the Alliance, this is the largest one-day energy conference in Alaska and includes educational forums and a tradeshow. alaskaalliance.com JANUARY 22-24
Alaska Health Summit Hotel Captain Cook, Anchorage: The 2019 summit theme is “Diverse Stories Inspiring Community Action” and the conference will highlight diverse, positive stories of community action and change as well as share successful strategies, important lessons learned, evidence-based recommendations, and additional opportunities for continued work together. alaskapublichealth.org
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INSIDE ALASKA BUSINESS Governor Bill Walker has signed the following into law: HB79—Makes efficiencies in Alaska’s workers’ compensation system that will reduce administrative costs; combats worker misclassification by establishing a clear statutory definition of “independent contractor”; and creates an interim legislative workers’ compensation working group tasked with reviewing the workers’ compensation system. AO297—Extends the life of Alaska’s Mariculture Task Force, establishing it as an ongoing advisory panel to work with state, federal, tribal, industry, and other stakeholders to support the implementation of the Alaska Mariculture Development Plan released this year. HB76—Expands the Mariculture Revolving Loan Fund to create new financing options for mariculture businesses. HB354—Updates the protocol used by the Southeast Alaska Regional Dive Fisheries Association to charge an assessment to its members. HB56—Updates the state loan fund to account for increasing costs for permits, vessels, and equipment. HB240—Regulates pharmacy benefit managers, which serve as the middle-men between local pharmacies and insurance companies. gov.alaska.gov
Airstrike Firefighters Airstrike Firefighters reached an agreement with the Colorado Division of Fire Prevention and Control to provide large airtanker fire suppression support services to their state and those it supports. “Our nations’ capacity to respond to large fires is at an all-time low while demand continues to surge. The P-3 is an outstanding plane for wild fire suppression in the most challenging locations, and our teams are eager to put it back to work,” says Bill Douglass, president and CEO of Airstrike. Airstrike is headquartered in Anchorage with flight operations out of Sacramento. The company has twenty-five employees refurbishing a fleet of seven P-3 firefighting airtankers for use on state and federal contracts. airstrikefirefighters.com
Mountain View Urgent Care is now open and welcoming new patients. Located in the Mountain View neighborhood, this Anchorage health center offers care to those insured through Medicaid and Medicare as well as private health insurance; discount and affordable payment plans are also offered. mvucak.com
MTA launched Business Amplifier, a digital marketing product that delivers professional video for any budget. MTA built this product with small businesses that have limited access to high-level digital marketing in mind. mtasolutions.com
Lynden has enhanced its customer offerings in the Hawaiian Islands and Guam by adding less-than-container load (LCL) ocean service between Los Angeles and Guam and LCL barge service between Seattle and Honolulu via Aloha Marine Lines. With this added service, Lynden continues to offer a full menu of capabilities including EZ Commerce, multimodal shipping options, Dynamic Routing, time-specific deliveries, and warehousing. lynden.com
GCI wireless customers will now receive enhanced messages through the national Wireless Emergency Alert (WEA) system, allowing them to be alerted of imminent threats to safety or life. WEA is a national program that was established by the FCC to warn the public about dangerous weather, missing children, and other critical situations. WEA alerts are generated by local, state, and federal agencies. The alerts will display in a format similar to a text message and will appear directly on a device without the need to download or open any application. The alerts are free and will not impact voice, text, or data usage. gci.com
New restaurant Chicken Shack put down roots at 1443 West Northern Lights Boulevard in Anchorage and established its niche—serving updated Southern classics with a modern twist on American comfort food. Chicken Shack serves baskets of fried chicken, grilled chicken, and honey-drizzled chicken and waffles, as well as chicken that is smoked, pulled, and Tennessee hot. Other menu items include pork chops, pulled pork, BLTs, wild boar and grass-fed beef burgers, salads made with local produce, house-made biscuits, and hand-cut fries, along with a selection of desserts. akchickenshack.com
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Office of the Governor
Mountain View Urgent Care
Baxter Senior Living Baxter Senior Living broke ground on a new construction project at 4308 Baxter Road in September. The facility will feature views of the Chugach Range and Bicentennial Park, a rooftop deck and elevated walkway, one- or two-bedroom private apartments, and a multitude of onsite amenities including dining, a wine bar, gardens, a movie theater, and a gym. baxterseniorliving.com
RIGHT MOVES Tlingit & Haida Central Council of Tlingit & Haida Indian Tribes of Alaska hired Jesse Parr as the Temporary Assistance for Needy Families (TANF) Parr Manager; Parr will oversee the daily management of the TANF department. He holds a bachelor’s degree in tourism and commercial recreation from Georgia Southern University and a master’s degree in public administration from the University of Alaska Southeast.
science in environmental engineering from Michigan Technological University. Shannon & Wilson added Schylar Healy to its Anchorage office technical staff as an Environmental Scientist. Her previous Healy professional experience includes serving as a wetlands mapping specialist and wetlands ecology technician in Fairbanks. Healy is a 2015 graduate of James Madison University in Harrisburg, Virginia, with a bachelor of science in geographic science.
Alaska Sea Grant
AAPCS The Alaska Association for Personal Care Supports (AAPCS) hired Allison Lee as part-time Executive Director. She brings with Lee her to this position a deep commitment to informed policy making, excellent communication skills, and extensive knowledge of state and federal regulations and regulatory processes.
Shannon & Wilson Matt Woods joined the environmental group at Shannon & Wilson’s Anchorage office as an Environmental Engineering Woods Staff IV. His current Shannon & Wilson projects include site characterization and cleanup activities and providing regulatory compliance support. Woods has a bachelor of
The University of Alaska Fairbanks has chosen Heather Brandon as Alaska Sea Grant’s new Director. Brandon is an environmental policy leader Brandon with experience in fisheries issues on a broad geographic scale, ranging from Alaska to the Arctic and Russian Far East. She has a master’s degree in marine affairs from the University of Washington and a bachelor’s degree in biology from the University of Oregon.
LONG Building Technologies Alyssa Norris joined the LONG Building Technologies team as an Account Executive in its Fairbanks office. She earned Norris a bachelor’s degree in civil engineering at Washington State University.
Norris will also be specializing in the C-PACE program as it launches in Alaska.
USACE—Alaska District Colonel Phillip Borders became the 28th commander of the US Army Corps of Engineers—Alaska District during a change Borders of command ceremony on the front lawn of the headquarters building near Anchorage. Borders will oversee a multi-million dollar program that provides engineering, construction, planning, contracting, real estate, emergency operations, environmental, and regulatory services to the military; federal, state, and local governments; and the public in Alaska.
Northrim Bank Northrim Bank welcomed Sarah Maycock, Electronic Banking Support Manager, and Kristin Oberman, AVP, Branch Manager. Susan Stenstrom has been promoted to AVP, Assistant Corporate Secretary. Maycock joined Northrim Bank with ten years of banking experience. Maycock holds a bachelor’s degree in communication Maycock from the University of Wisconsin Milwaukee. She was an active volunteer in her previous job, where she taught financial literacy to school students. Oberman joined Northrim Bank with seven years of experience in the financial industry. She has worked with Alaska USA Federal Credit Union and
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First National Bank Alaska. Oberman holds a bachelor’s degree in psychology with a minor in Human Resources Management from the Oberman University of Maryland. Stenstrom has been with Northrim Bank for ten years and has forty-three years of experience in the financial industry. She has a wide Stenstrom range of experience in the financial industry and has held positions in regulatory compliance and examinations, insurance and related licensing, loan administration, and corporate documentation at the executive level.
Alaska Aerospace Alaska Aerospace hired Mark D. Lester to serve as the company’s new President. His background includes providing business Lester development, marketing, program management, and engineering expertise for a number of aerospace companies. He holds both a bachelor of science in electrical engineering from Norwich University and a master of engineering in space operations from the University of Colorado.
Department of Law Tim McGillicuddy has been appointed as the Ketchikan District Attorney. McGillicuddy graduated from the University of Illinois, School of Law in 2007 and served as a prosecutor around the country for nine out of the following eleven years. He joined the Ketchikan District Attorney’s office in 2016 and since then has worked a varied caseload
including complex homicides, assaults, burglaries, and drug trafficking cases.
Alaska Maritime Agencies Luke Hasenbank, who most recently served as Alaska Maritime Agencies’ vice president, has been promoted to President, Hasenbank where he will continue to oversee all Alaska operations including offices in Anchorage, Dutch Harbor, Kenai, Seward, Whittier, and the Lynnwood accounting department in addition to all the outlying Alaska ports. Hasenbank has been with the company since 2003. Andrew Mew, who previously served as operations manager, has been promoted to Vice President; in this role he Mew will continue to oversee all Alaska operations including offices in Anchorage, Dutch Harbor, Kenai, Seward, and Whittier in addition to all the outlying Alaska ports. Mew has been with the company since 2013.
director of athletics at Savannah State University. He earned bachelor’s and master’s degrees in human performance and recreation at the University of Southern Mississippi. Jodie Anderson is the new director of the Matanuska Experiment Farm and Extension Center near Palmer. She will provide leadership for the academic, research, and Cooperative Extension Service outreach programs based at the facility, which is part of UAF. Anderson has a varied background in agriculture and natural resources: most recently, she served as program coordinator for the Alaska Division of Agriculture’s Farm to School Program.
Municipality of Anchorage Mayor Ethan Berkowitz appointed Alex Slivka to the position of Chief Fiscal Officer for the Municipality of Anchorage (MOA). He comes to MOA from McKinley Capital Management, where he served in various leadership capacities. Slivka has more than thirty-five years of experience in the financial industry.
UAF Theresa Bakker has been named the new University of Alaska Fairbanks (UAF) Alumni Relations Director. She will also serve as the Executive Director of the UAF Alumni Association. Bakker holds a bachelor’s degree in journalism from the University of Pennsylvania and a master of fine arts degree in creative writing from Pacific Lutheran University. Veteran athletics administrator Sterling Steward has been chosen as UAF’s new director of intercollegiate athletics. Steward comes to the Nanooks after serving the past seven years as the
Alaska USA Alaska USA Federal Credit Union has selected Sharlyn Ruyan for the position of Vice President, Member Service Center. Ruyan has Ruyan worked at Alaska USA for more than nine years, most recently as manager, member service center. She is a graduate of the 2017 Victor Valley Chamber of Commerce Leadership program and regularly volunteers her time for nonprofits in her community, including the March of Dimes and the United Way.
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November 2018 | 125
AT A GLANCE What book is on your nightstand? The American Heiress [by Daisy Goodwin]. What movie do you recommend to everyone? Crash: the message in it is really powerful and I think it’s probably even more relevant today. What’s the first thing you do after work? I go out and play with my dog [Trinity, a Siberian Husky] or take her for a walk. If you couldn’t live in Alaska, where would you live? I’d live somewhere with a lot of the same traits. There’s a reason I’m here. If you could domesticate a wild animal, what animal would it be? A red fox.
126 | November 2018
OFF THE CUFF
Julie Saupe ulie Saupe has been the president and CEO of Visit Anchorage since 2007; she has worked
to develop visitor industry opportunities in Alaska for more than twenty years, including positions at Explore Fairbanks, Travel Alaska, and the Mat-Su Convention & Visitors Bureau. Alaska Business: What is your favorite pastime? Julie Saupe: Can I tell you what I like to say I do? [She laughs.] I like to think of myself as an avid hiker. I just don’t get out as often as I should to really apply that to myself, but when I do have spare time, I would like to be somewhere up in the mountains. My absolute favorite hike is Portage Pass Trail.
AB: What are you most superstitious about? Saupe: If I’m following a sports team (and I’ve got a few favorites, though I’m not rabid about any), and if I don’t watch a game and they lose, I feel like it’s my fault. AB: What is your best attribute and your worst attribute? Saupe: Others have told that I’m authentic. And the worst attribute: in a group setting I like to not be the decision maker, so I’m one of those that can end up in a group going, “Oh, no, really, you decide.”
AB: Is there a skill you’re currently developing or that you’ve always wanted to learn? Saupe: I’ve always wanted to do watercolor, and then I always wished that I had more musical talent than I do.
AB: Other than your current career, if you were a child today, what would your dream job be? Saupe: I am fascinated by heavy equipment and heavy equipment workers—the trucks with the tires that are taller than you. I think that would have been a fabulous career. AB: What is your favorite way to exercise? Saupe: I like classes… I like being in a group setting with music and other people.
Images ©Kerry Tasker
AB: What is your go-to comfort food? Saupe: Ice cream, if I’m at home, but I actually relish saltine crackers. I can’t keep them in my desk.
AB: Dead or alive, who would you like to see perform live in concert? Saupe: I’d love to see the Beatles in the middle of Beatlemania. If I could be sixteen years old again and in that moment, that would be fun. AB: What’s your greatest extravagance? Saupe: Probably the recent addition of an apple-corer both at work and at home; I eat a lot of apples and using this little gadget makes me feel a little indulgent on almost a daily basis. www.akbizmag.com
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Last Frontier Recreation Alaska is home to one of the largest consumer bases for outdoor products as a percent of the population. Consumers access a broad range of activities at varying levels of intensity. Outdoor Participation Rates
In 2017 there were approximately 44,700 registered snowmachines in Alaska, which means an average of roughly 1 in 12 Alaskan residents owned one. Outdoor Recreation Matters to Alaskans
Alaska ranks highest, alongside Montana, for outdoor participation and the potential for outdoor recreation-grounded tourism is great.
Alaska ranks highest in fishing licenses per capita. Of Alaskan adult residents, 1 in 3 purchased a fishing license and 1 in 6 purchased a hunting license in 2017.
With 15 National parks, 120 state parks, 16 national wildlife refuges, and 2 national forests, Alaska is home to more than 322 million acres of public lands.
Manufacturers, designers, and retailers all spoke to the power of the Alaska brand. Many people will say, “if it will work in Alaska, it will work anywhere.”
CED estimates that of the total population of people visiting Alaska, 61 percent participated in at least one form of outdoor recreation. ALASKA TRENDS IS BROUGHT TO YOU BY AMERICAN MARINE/PENCO
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ANS Crude Oil Production 09/27/2018
Winter activity product categories made or designed in Alaska:
Avalanche protection Dog booties Dog leash hand warmers Skis Snow shoes Snowboards Specialized winter camping gear Spiked shoes Winter clothing
ANS Production barrel per day 511,268 Sept. 27, 2018
SOURCE: Alaska Department of Revenue Tax Division
ANS West Coast Crude Oil Prices 09/27/2018
Water activity product categories made or designed in Alaska:
Hunting and fishing product categories made or designed in Alaska:
Dry bags Packrafts Watercraft
Camping, hiking, and backpacking product categories made or designed in Alaska:
ANS West Coast $ per barrel $80.57 Sept. 27, 2018
Fishing rods Gun accessories Hunting and fishing apparel Knives and blades
$80 $100 $120 $140 $160
Statewide Employment Figures 10/1976—8/2018 Seasonally Adjusted 08/01/2018
Bicycling product categories made or designed in Alaska:
Apparel Backcountry gear Dehydrated food Survival gear Tents
SOURCE: Alaska Department of Revenue Tax Division
Bikes Bicycle bags Pogies
Labor Force 358,332 Aug. 2018 Employment 334,228 Aug. 2018 Unemployment 6.7% Aug. 2018
01/01/2010 05/01/2004 09/01/1998 01/01/1993 05/01/1987 09/01/1981 01/01/1976 0
Source: Emerging Sector Series: Outdoor Products, September 2018, University of Alaska CED
SOURCE: Alaska Department of Labor and Workforce Development, Research & Analysis Section; and US BLS
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www.penco.org November 2018 | 129
ADVERTISERS INDEX ABR Inc.................................................102
Brilliant Media Strategies................... 75
Holmes Weddle & Barcott................. 96
Advanced Physical Therapy of Alaska............................................ 96
Bureau Veritas Minerals..................... 64
PIP Marketing Signs Print................... 58
Business Insurance Associates Inc..44
Judy Patrick Photography................130
PND Engineers Inc............................101
Calista Corp........................................... 71
Kinross Fort Knox................................ 33
Carlile Transportation Systems......131
Landye Bennett Blumstein LLP...........9
Resolve Marine Group......................105
AIDEA...................................................... 36 Alaska Dam Safety Program.............. 50
Alaska Dreams Inc............................... 43
CBI Media Group...............................120
Lynden Inc.............................................. 35
Resource Development Council...... 85
Alaska Earth Sciences......................... 44
Mechanical Contractors of Fairbanks...38
RISQ Consulting................................... 41
Alaska Energy Services LLC.............. 40
Conam Construction Co.................... 95 Conrad-Houston Insurance Agency... 58
MFCP - Motion & Flow Control Products Inc...................................100
Seatac Marine Service........................ 19
Construction Machinery Industrial (CMI)...................................2
Seawolf Sports Properties................. 77
Shoreside Petroleum........................... 56
Crowley Alaska Inc.............................. 53
N C Machinery...................................... 49
Span Alaska Transportation LLC...... 42
Cruz Companies................................... 32
Nana Regional Corp............................ 57
Stellar Designs Inc.............................118
Alaska Gasline Development Corporation...................................... 31 Alaska Process Industry Careers Consortium (APICC)...................... 47 Alaska Railroad...................................... 29 Alaska Rubber & Rigging Supply...... 63 Alaska School Activities Association.. 93 Alaska Soil Recycling........................... 84 Alaska USA Federal Credit Union.... 99 All American Oifield Services.........101 ALSCO..................................................... 94 Altman Rogers & Co............................ 19 Alyeska Pipeline Service Co............103 American Marine / PENCO...128, 129 Anchorage Chrysler Dodge............... 46
Samson Tug & Barge........................... 65
Nana WorleyParsons.......................... 92
Sumitomo Metal Mining Pogo LLC.. 54
Donlin Gold............................................ 63
Nenana Heating Services, Inc........... 84
T. Rowe Price......................................... 13
Dowland-Bach Corp........................... 87
New Horizons Telecom Inc............... 76
Teck Alaska Inc..................................... 51
North Star Behavioral Health.........108
The Plans Room.................................... 95
DRS Technologies................................ 97
Northern Air Cargo................. 124, 125
Tioga Air Heaters................................. 27
Exxon Mobil........................................... 45
Northrim Bank...................................... 73
TOTE Maritime Alaska........................ 89
Fairweather LLC................................... 66
NorthStar Supply LLC......................... 61
Trilogy Metals........................................ 67
First National Bank Alaska....................5
Novagold Resources Inc..................... 55
Tutka LLC................................................ 29
Fluor Corp.............................................. 39
NU FLOW Alaska................................. 86
UA Facilities & Land Management.. 74
Foss Maritime........................................ 62
Oxford Assaying & Refining Inc....... 62
United Way of Anchorage................. 11
Fountainhead Hotels........................... 64
Pacific Pile & Marine.........................123
Usibelli Coal Mine................................ 52
Fountainhead Development Inc...... 72
Parker Smith & Feek............................ 59
Pathfinder Aviation.............................. 37
Hecla Greens Creek Mining Company............................. 65
Wells Fargo Bank Alaska.................... 81
AT&T........................................................ 21 Avis Rent-A-Car..................................117
Historic Anchorage Hotel................118
Petrotechnical Resources Alaska (PRA)..................................... 91
Wild Fork Catering............................119
Anchorage Sand & Gravel.................. 84 Arctic Catering & Support Services...27 Arctic Chiropractic.............................119 ASRC Energy.......................................104
Vigor Alaska........................................... 88 Visit Anchorage.................................. 111 WesternAircraft......................................3
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130 | November 2018
Your Partner in Possibilities.
Trilogy Metals President and CEO Rick Van Nieuwenhuyse presented an update on the Upper Kobuk Mineral Project, which includes its Arctic and...
Published on Nov 1, 2018
Trilogy Metals President and CEO Rick Van Nieuwenhuyse presented an update on the Upper Kobuk Mineral Project, which includes its Arctic and...