Critics of a controversial mineral exploration project north of Haines say the proposed mine isn’t viable. A new report says Constantine’s Palmer Project relies on selling a mineral that other mines bury as waste.
The mountain range Constantine is exploring as part of the Palmer Project. (Constantine Metal Resources)
Constantine’s Palmer Project promises to be a diverse metals mine with copper, gold, zinc and silver. But its viability also rests on selling a colorless mineral called barite. It is used on drilling rigs so it is sought after by the oil and gas sector. Except a recently released report says there’s no market for barite.
Rivers Without Borders in Juneau contracted a study from a Montana-based mining consultant to see if the company’s preliminary economic assessment holds up to scrutiny.
“They don’t have a port to export barite from,” said Chris Zimmer of Rivers Without Borders.
“They don’t have any buyers. The market is fairly well saturated with barite. Oil and gas drilling is, as we know here in Alaska, taken a dive, the oil market crashed. We’re not seeing any expansion there.”
Rivers Without Borders is battling the company’s mineral exploration efforts in federal court. They argue that mining could harm the Chilkat River’s salmon run.
But many Lynn Canal residents hope a metals mine could bring high paying jobs to the region. Constantine’s CEO Garfield MacVeigh told them the project had strong prospects at a mining forum in March.
“Right now you can wrap your arms around ten to fifteen years of mine life, but the opportunity at Palmer is a lot more than that. That get the geologists in the group that I work with excited,” he said.
Environmentalists aren’t often concerned about a mining company’s healthy bottom line. But Zimmer says a bankrupt mining company is a threat to the ecology. He says he’s seen junior mining companies aim high and fail.
“A number of them go bankrupt before the projects get to completion, and it just leaves a kind of a divided torn up community and environmental mess behind and a legacy that the taxpayers have to pay for to clean up,” he said.
Constantine’s economic projections assume barite will fetch $220 a metric ton. But according to federal commodity tables, barite hasn’t topped $194 dollars in five years. KHNS reached out to a number of mineral commodity specialists and investment companies. None of them monitor barite as a saleable commodity.
But it is part of Southeast Alaska’s geology. Hecla Greens Creek Mine on Admiralty Island is the largest in the region. But the barite there either stays in the ground or ends up as tailings. It’s a waste product; they don’t sell it.
“Barite that exists in our orebody is not recovered as a saleable product and thus would end up primarily in our tailings. Approximately half of our tailings is mixed with cement and placed underground and the remainder is placed in our dry-stack facility,” Hecla Greens Creek Manager of Government and Community Relations Mike Satre wrote in an email.
Constantine declined an interview to discuss barite. Or the findings of the Rivers Without Borders report. But in a statement company Vice President of Community and External Affairs Liz Cornejo defended Palmer Project’s economic assessment. She says the independent engineers and geoscientists that worked on it are governed by professional ethics and are unbiased. She questioned whether the study commissioned by Rivers Without Borders applied the same standard in its review.
“ It is important to remember that the Palmer Project is still in the advanced exploration stage. There are and will be many ongoing environmental, engineering and exploration campaigns necessary to complete the analysis of a feasible project,” she wrote.
Constantine Metal Resources has been seeking cash to continue operations. It took out more than $600,000 in loans at 12% interest last year. Its stock price plunged last summer and hasn’t recovered. It’s unclear whether exploration drilling will resume this summer.
