There are many positive reasons why companies should consider exploring and investing in Alaska. These include: 104 million acres of State land; 45 million acres of private Native land; favorable geology; terranes that are effectively unexplored; a history of mineral elephants; a supportive State Legislature, Governor's office, and Congressional Delegation; supportive local communities; a high level of technical and vendor infrastructure; mining and civil law that provide for secure tenure.
In addition to these positive reasons for working in Alaska, there are also problems and events elsewhere in the world that make some other countries less inviting for the explorationist and investor. The following items are taken from the WEEKLY HILITES that are prepared for the Officers and Directors of the Alaska Miners Association:
April 23, 1998 - Turkey - Last month Eurogold's plan to build a gold mine in Turkey, for which they had legal rights and approvals but were opposed by a local community, was blocked by a decision of the Supreme Court. This reversal has now resulted in Cominco deciding to shelve their plans for a $100 million mine project in Turkey. Notwithstanding government assurances to the contrary, when companies see what they feel are questionable actions opposing one project, they will ask "if they will do that to company xyz why will they not do it to me also."
May 28, 1998 - Bad Tax News in Canada - The Mining Association of Canada predicts that proposed changes to federal income tax laws will discourage investment, reduce profits and kill jobs in Canada. At issue is a report by a committee of tax experts that recommended lowering taxes on the service sector and increasing taxes on resource development and manufacturing. For mining it proposes reducing the annual development write-offs from 30% to 25% and narrowing the base income at which companies could claim the 25% deduction.
August 13, 1998 - Why Explore in Alaska? - Recent foreign events provide further reasons companies should and will be interested in developing mineral projects in Alaska.
Sukima - The Congo government revoked Banro Resources Corp.'s 93% interest in the Sukima project which could hold as much as 8 million ounces of gold. Banro had begun a $20 million exploration program on the project.
Venezuela - The AND reported this week on the Pemon Indians' efforts to block development of a road and 470 km long power line to a major gold mining area being developed. The power line will also go through a U.N.-designated World Heritage Site and it is certain that this will be used to affect the project.
Indonesia - 4,000 contract laborers in non-mining operations such as offices and transport have gone on strike at Grasberg, the largest gold and copper mine in the world.
September 10, 1998 - Zaire/Congo Provides Another Reason to Explore in Alaska - Canadian company Banro Resources (TSE) has filed a claim through the International Center for the Settlement of International Disputes in Washington, DC for more than US$1 billion against the Democratic Republic of Congo (formerly Zaire) claiming that government unilaterally dissolved its 93% owned Congolese subsidiary (Sominki/Sukima) which had been established in the early 1990s.
September 24, 1998 - Another Reason to be Operating in Alaska - The financial crisis in Indonesia is resulting in widespread theft of gold and coal from miners operating there. BHP, Rio Tinto and others say that what began as a trickle of illegal miners has swelled in recent weeks. Neither the demoralized military nor local officials are willing to stop the thefts.
October 22, 1998 - Two More Reasons to Explore in Alaska - 1) Indonesian House members have called for review of PT Freeport Indonesia's 1991 Contract for Work (COW) [this is the lease/license under which companies are allowed to operate in country] due to allegations of corruption in dealing with the previous government administration. 2) South Africa has confirmed mineral industry fears in a policy paper passed on October 20, 1998 that will transfer mining rights from the private sector to the state and apply a "use it or lose it" approach to promote development.
November 13, 1998 - More Reasons to Explore in Alaska -
Foreign Taxation - At the recent NMA Convention in Phoenix, James M. Otto of the Institute for Global Resources Policy and Management at the Colorado School of Mines, said that doors are opening for mining worldwide but companies must be prepared to pay heavy taxes because many countries are beginning to favor taxation that is not related to profitability.
China - Two Vancouver juniors, Asia Minerals and Zen International have joined Newmont and Barrick Gold in shutting down exploration in China due to bureaucratic holdups and contract disputes with their Chinese partners.
November 19, 1998 - Three More Reasons to Explore in Alaska -
South Africa - The South Africa Truth Commission has recommended a special tax on corporate South Africa to redress apartheid's legacy of poverty. It has also singled out mining companies for an "appropriate apology" over its role in apartheid.
Political Risk Insurance - The Financial Times reports that following its extended legal fight in Venezuela, Placer Dome has now purchased a $470 million political risk insurance policy for developing countries to include Russia, Africa and South America.
Kyrgyzstan - The Wall Street Journal on 11/18 reported that even though an international scientific commission cleared Cameco Corp. and its Kumtor Mine of hurting any local inhabitants or causing significant damage, Kyrgyzstan has none the less imposed aid requirements of $6-8 million, forced replacement of the mine manager and eight new expatriate staff, and is now forcing stricter customs procedures which include emissions controls on new Western-made vehicles while Russian busses pollute uncontrolled.
January 14, 1999 - Russian Far East - Russian President Boris Yeltsin has signed a decree overruling an August decree of the Sakha/Yakutia Governor Mikhail Nikolayev that has placed gold production in that Oblast under local control. Yeltsin's decree reverses the Governor's decree and reaffirms that Gokhran, a federal agency, has preferential rights to buy gold from producers.