A Constantine employee examines an area of the Palmer Project known as the AG zone. (Photo courtesy of Constantine Metal Resources)

Over the last year, Constantine Metal Resources has been stepping up efforts to explore mineral deposits at the Palmer Project, an exploratory site about 35 miles north of Haines. The company is applying for a permit to drill an access tunnel to explore more of the resource and is preparing an economic analysis for investors.

Meanwhile, discussions about changing the ownership of the land where the project is located could speed up the permitting process for mine development.

Since the 90’s Alaska Mental Health Trust has been trying to take ownership of the land where the Palmer Project is located. The only thing preventing that from happening is the federal mining claims that have been leased to Constantine Metal Resources.

According to the trust’s Land Office Director Wynn Menefee, there has been ongoing discussion with Constantine about converting the federal mining claims of the Palmer Project to Mental Health Trust land.

“Nothing is happening immediately. There have been lots of discussions about it. That is the desire of Constantine is to bring those federal claims over into state ownership. The trust authority would be the owner of those lands if the federal claims went away,” Menefee said.

Liz Cornejo, Constantine’s vice president of community and external affairs, says mine development on federal land generally requires a longer permitting process than mine development on state land.

If the land was owned by the Mental Health Trust, permitting would be facilitated by Alaska’s Department of Natural Resources rather than the federal Bureau of Land Management.

The light blue areas surrounding the Palmer Project mining claims are owned by the Mental Health Trust. (Map courtesy of Constantine Metal Resources)

There are a couple ways that the federal mining claims could be removed.

“The claims could potentially be bought out by various entities. Constantine could do it. Private interest groups could do it. The trust could potentially do it,” Menefee said.

Before the claims are removed, Constantine and the Mental Health Trust would need to consider what a future mining lease would look like.

“If you are trying to buy out the claims you have to know what the future tense is going to be,” Menefee said. “What’s going to happen with the mineral leases and such in order to have confidence among the different parties?”

Discussion of relinquishing the federal mining claims and a possible lease between Mental Health Trust and Constantine is ongoing.

However, Constantine is considering all its options

According to Cornejo, there are advantages and disadvantages to leasing federal mining claims. Although permitting could be simpler on state land, federal claims establish rights to an entire mineral deposit rather than a specific area of land.

“If you can track that mineralization from surface underground it’s still part of your claim even if it passes past that claim boundary. On state claims that boundary goes vertically toward the center of the earth whereas on federal claims you can trace it beyond your claim boundary at depth if it is connected to the surface showing. So that would be one of the advantages.”

The current permitting authority for the federal mining claims, the Bureau of Land Management, is facing a lawsuit for approving Constantine’s plan to expand mineral exploration at the Palmer Project in 2016.

Chilkat Indian Village and three conservation groups filed the lawsuit, claiming that BLM failed to consider the future environmental impact of a mine when it approved plans for further mineral exploration. The Palmer Project is located upstream from the Klehini and Chilkat Rivers, both of which are spawning grounds for anadromous fish.

The lawsuit against BLM is ongoing.