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P E BB L E PRO J E C T NE W S L ETTER

May 2010

Table of Contents INSIDE Pebble Supports ANSEP Site Seeing at Pebble Myth Busting Pebble Fund

Copper: Today’s Essential Renewable Energy Mineral Copper, the main mineral at Pebble, plays a vital role in the modern world. The use of this essential mineral can be traced as far back as 9,000 B.C., with an aggressive progression of use and application that has had an astounding impact on everyday life. Today, copper can be found throughout homes in everyday objects, such as cell phones, computers, water pipes, locks, electrical wiring, cars and more. Copper is recyclable, an excellent conductor of electricity and heat, dominant in medical technology advancements and also one of the best natural resources for renewable energy options, such as wind turbines. Globally, it is one of the most important natural resources on the planet

A 3 mega watt wind turbine requires 5 tons of copper.

What is the Pebble Deposit? The Pebble deposit is classified, geologically, as a porphyry copper deposit and is one of the most significant mineral discoveries in North America. In 2008, this type of deposit generated about 75 percent of the copper produced globally with the four largest copper producers being Chile (34.5 percent), the United States (8.5 percent), Peru (8.2 percent) and China (7.5 percent). In addition to copper, Pebble, like many porphyry deposits, contains other potentially economic minerals, including molybdenum, gold, silver and rhenium. Pebble is classified as a mineral deposit – that is, it contains useful commodities (copper, molybdenum, gold and other metals) in sufficiently high concentration at reasonably achievable depths to potentially be mined.

Samples of core are reviewed and catalogued at site.

Porphyry deposits form in the roots of volcanoes. Volcanoes commonly occur in long belts called volcanic arcs similar to the Aleutian arc or the Andes Mountains of South America. Volcanic arcs commonly form where the crust beneath ocean basins is drawn into the Earth, below the crust which forms the continents. This causes rocks in both (continued on Page 2)

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Pebble Supports ANSEP Program has Bristol Bay Focus

The Pebble Partnership continues its partnership with the Alaska Native Science & Engineering Program (ANSEP) with a $75,000 donation, the second installment of a five-year annual commitment. The cooperative education program provides long-term career path opportunities for Alaska Native students in the fields of science and engineering. This innovative and award-winning program offers a step-by-step, structured platform that leads participants through the education process beginning in middle school and continuing through undergraduate studies, graduate school and professional life. There were more than 700 ANSEP students involved statewide during the 2009-2010 academic year. “ANSEP is a strong education program that offers a great opportunity for students in Southwest Alaska, with the potential to have a profound and positive impact in the region for generations to come,” says John Shively, CEo of the Pebble Partnership. “Developing early education curriculums that coincide with fieldspecific mentoring in the areas of math and science helps to prepare students academically for challenges at the collegiate level.” For more information on the Pebble Partnership’s participation in ANSEP, visit www.pebblepartnership.com/news.

Site Seeing at Pebble With summer around the corner, the Pebble site team is gearing up for the five-month exploration season. During this time, Pebble’s Stakeholder Relations program hosts site tours for stakeholder groups to provide a first hand glimpse of the deposit and offer one-on-one time with geologists and site personnel to address questions and learn more about what Pebble may potentially offer. To date, more than 200 site tours have been hosted during a four-year period. Communities in the Bristol Bay region that have been invited to send people on a site tour include: Togiak, Twin Hills, Manakotak, Aleknagik, Dillingham, Portage Creek, Naknek, King Salmon, South Naknek, Pilot Point, Ugashik, Port Heiden, Chigniks, Ivanof Bay, Kokhanok, Levelock, Ekwok, New Stuyahok, Koliganek, Igiugig, Newhalen, Pedro Bay, Nondalton and Port Alsworth. Many more organizations, municipalities and stakeholder groups have also been invited to the proposed Pebble site to learn more about Pebble’s exploration.

Site tours provide perspective of the deposit.

Site tours include presentations relative to the exploration and research efforts currently under way, a field tour of the actual deposit via helicopters, a landing near one of the drill rigs and a Q&A with staff. To learn more about Pebble’s site tour program, please contact Sonya Stewart at sonyastewart@pebblepartnership.com.

What is the Pebble Deposit? (continued) form more coarse-grained rocks that can have textures like granite.

Geologist work in the field verifying rock units.

When some special types of magmas cool below the surface they release fluids which contain elements like sulfur and metals like copper. Economic copper deposits form when hot, metal-bearing waters travel through the crust of the earth, and encounter conditions where enough copper-rich minerals can precipitate in a sufficiently small volume. Uplift and erosion effects allow the mineralization to be preserved close to the surface.

the ocean and continental crust to melt and the resulting magmas move upward into the shallower part of the crust where they can either erupt in volcanoes, like the ash from Mount Redoubt, and/or solidify below the surface where they

Because so many different processes must work together in one small area, metal deposits that can be mined profitably are exceedingly rare. Fortunately such processes did work together to form the Pebble deposit about 90 million years ago.


Busting!

PERCEPTIoN

Anti-mining groups opposed to the Pebble Project claim Pebble sits at the headwaters of Bristol Bay.

REALITy

According to the U.S. Geological Survey (USGS), the Smithsonian Institution and the National Geographic Society, Upper Talarik Creek is not the headwaters of the Kvichak River. Nor is the Koktuli River (south or north forks) the headwaters of the Nushagak River. Here’s why:

All of these authorities define ‘headwaters’ as the source of a river or stream – that is, the most distant point from a river’s mouth within the drainage basin (measured along the stream course) from which water runs year round. or, put another way, the furthest point from which water could possibly flow into the ocean. By definition, the headwaters of the 225-mile-long Kvichak system are the Tlikakila River at Lake Clark Pass. This is 137 watercourse miles upstream from the mouth of Upper Talarik Creek or 109 miles as the crow flies from the Pebble Project site. The headwaters of the 315-mile-long Nushagak system are the source of the Mulchatna River above Turquoise Lake. This is 168 watercourse miles upstream from the mouth of the Koktuli River or 79 miles as the crow flies from the Pebble Project site.

Sometimes people use ‘headwaters’ to mean ‘all the small streams that come together to form a river.’ By this definition, many large rivers would have hundreds or even thousands of headwaters. The Nushagak system has roughly 24 tributaries of similar or larger size than the North and South Fork Koktuli. And the Kvichak system has roughly 18 tributaries of similar or larger size than the Upper Talarik Creek. But most importantly, based on the authoritative definition of ‘headwaters’ agreed upon by the USGS, the Smithsonian Institution and the National Geographic Society, neither the Koktuli nor Upper Talarik Creek truly represent the ‘headwaters’ of the Nushagak and the Kvichak river systems and therefore are not representative of the headwaters of Bristol Bay.

FACTS: • There are eight major watersheds in Bristol Bay. • Pebble is located 120 air miles from Bristol Bay, the equivalent distance between Anchorage and Homer. • Pebble is located 228.5 river miles from Dillingham, the equivalent distance between Wasilla and Ninilchik. • According to the definition of headwaters as defined by the U.S. Geological Society, the Smithsonian Institute and the National Geographic Society, Pebble is not located at the headwaters of Bristol Bay.

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3201 C Street, Suite 604 Anchorage, AK USA 99503 (907) 339-2600 Toll-free: 1 (877) 450-2600 www.pebblepartnership.com

Pebble Fund Grants Make a Difference

year to date, the Pebble fund has awarded $2.4 million to local projects and helped to leverage an additional $12 million in matching funds.

Build i

t i es

Grants include: • Lake & Peninsula School District, School to Life expansion ($150,000) • Southwest Alaska Vocational & Education Center, capacity building ($150,000) • Iliamna Village Council, burn box ($109,000) • University of Alaska, Bristol Bay Campus, science building purchase ($80,000)

tainable Com m un i

“It is rewarding to see the progress the Pebble Fund is achieving by advancing important projects that positively impact regional residents, sustainability, enterprise and communities,” says John Shively, CEo of the Pebble Partnership. “our goal remains to support meaningful contributions and improve the long-term economic situation in this part of our state.”

us S g

n

The Pebble Fund’s spring 2010 cycle of grants recognized 17 projects supporting sustainable communities in Southwest Alaska. Grants totaling $842,947 have been awarded to a wide range of projects exhibiting vision and promoting growth of vital initiatives in the region.

Made possible by the Pebble Fund

Sign up to receive the Pebble Partnership’s new e-communications at www.pebblepartnership.com.

A full list of the spring 2010 grant recipients, as well as the full history of grants awarded from the Pebble Fund, is available at www.alaskacf.org.

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Peb-0194 2010 Newsletter May