Sign Banking Presentation Alaska Later

Industry sign banking alaska document fast

welcome to the discover alaska lecture series brought to you by uaf summer sessions and lifelong learning my name is althea st martin and i will be your host for this summer series discover alaska is in its 15th season and was previously held on the uaf campus the covid 19 pandemic and social distancing guidelines required that we rethink the format for the series this summer we are delighted that kuac has agreed to support the new format as a weekly tv broadcast thank you koac each wednesday night this summer kuac will air a talk by a local community member on a range of alaskan topics we are grateful to our speakers who are incredibly flexible in adjusting to this new format and appreciate the time they are donating to help us all learn more about our great state before i introduce tonight's speaker i wanted to let you know that you can view the talks online later by going to uaf summer sessions website at uaf.edu backslash summer backslash events i'm delighted to introduce tonight's speaker kurt freeman who will present alaska's mineral industry a 2020 perspective mr freeman earned his bachelor's degree in geology from the college of wooster ohio and his master's degree in economic geology from uaf kurt recently retired from 35 years as president of fairbanks-based avalon development corporation one of alaska's largest and most successful mineral exploration consulting firms kurt and his team have made numerous mineral discoveries all over alaska as well as the lower 48 in parts of canada africa south and central america and new zealand his team has been involved in gold silver platinum group base metals and rare mineral discoveries kurt has been a resident of fairbanks since 1982 please welcome kurt freeman good morning everyone and thank you for joining me today on our little talk about the mining industry and a summary of where we are kind of where we're going my entry slide here is a picture of the old miles glacier bridge the million dollar bridge down over the cordova river one of the spans has fallen in the river and that's kind of my take off for what now where are we going and what are we going to do i have a disclaimer as everyone seems to have for uh for sort of technical talks a lot of what i am going to be speaking about is forward-looking statements so um i'm using a a um a disclaimer from niels bohr i figure if it's good enough for him it's good enough for me it's he said it was very difficult to predict things particularly especially the future so um with that one of the 800 pound gorillas in our room usually when i give talks about the mining industry is why are there mines to begin with what do why do we even need them um and so the picture here of the little puppy on the on the uh the laptop things get worn out things break things wear out uh and new technology comes along and transplants old technology which is no longer even viable it's no longer even functional mines exist because demand for the products they create are there and i think i'll show you as we move along that that demand on a lot of the metals we'll be talking about has gone up dramatically in the last 10 years and is projected to continue to do that so mines will be around for a long time my career in this slide of a bunch of geologists sort of standing in on an outcrop my career has been spent mostly in the exploration industry largely here in alaska but in other parts of the world as well um our work was primarily early stage work we were the first ones out there that were sort of the first ambassadors if you will what we found out early on and what everybody finds out when they come to alaska is is very quickly you find out that you will be seeing a lot of different terrains when you work in alaska and the next slide is a picture of a couple of different ones one a very mountainous rocky terrain virtually no vegetation if you get very high in the terrain you're up in the snow field permanent snow fields the other slide is other picture is typical interior alaska woodland in this case one that has burned and regrown and so it is like pixie stix it's almost impossible to walk through this kind of terrain those two are in some cases only tens of miles apart in addition there are terrains like this next picture miles and miles of nothing but miles and miles no roads no airports no villages no nothing trying to work your way through you know where to start in terrains like that where to begin to look for mineral deposits is pretty difficult we also have southeast alaska which is its own world of both con temperate rain forest but also as a a a difficult place to work down near seaboard where it's very dense vegetation thick moss not a lot of rock this particular picture though shows an uh an upland area where there is some rock and in particular one of the things that you notice and you get used to is reading the countryside when you're doing this kind of exploration this particular picture shows a bare patch of ground with an odd looking color to it in this case it's rocks that are high in magnesium which is kind of odd you say you know so what well those kind of rocks are often host to things like platinum palladium copper nickel cobalt those kind of deposits so when i see things like that i want to stop i want to go look i want to find out why the next slide is a picture of uh it's not from alaska but it's typical of sort of outer aleutian and inner alaska peninsula hot springs that are formed around volcanic activity this particular picture is of the champagne pool down in the taupo volcanic field in new zealand that particular volcanic field is forming ore deposits at the surface literally as we speak gold arsenic and mercury are all deposited from these hot volcanic fluids and one thing that we keep in we got to keep in mind is what's being mined are essentially fossilized or petrified deposits other deposits are forming literally as we speak under our feet all over the globe and so somewhere down the road it'll be millions of years from now they'll be exhumed and they'll be available so this is not a not something that happened mineral deposits just didn't happen and stop they're continuing to form literally as we as we speak this uh picture the next slide is a uh a picture of extremely high grade gold in a quartz vein from right here in the fairbanks district just a few miles from us whereas most gold deposits are measured in grams per ton of rock this is measured in kilograms per ton this is a thousand times the the amount of gold that you would normally expect to see in a rock so when a geologist sees something like this you're not going to get their attention to do much of anything else they're going to be looking looking at this rock but that is one of the reasons people come to alaska for those sorts of things the slide here that i'm looking at now that you're seeing here these days are long gone this picture of an old prospector with a burrow and picking shovel and pan on his on his burrow those days are long gone that is not what happens out there in the world they're still prospectors loan as well as company but they use technology that that these people could not have dreamed of at turn of the last century uh in fact the push these days you'll see it in the next slide on on ai and artificial intelligence is is managing huge amounts of data terabytes of information that are gathered literally almost daily and how to sort through those how to make sense of those and determine where the next ore body is in your data set those are those are really difficult tasks and those data sets are only growing so the application of artificial intelligence in this industry is growing with leaps and bounds one warning if you will uh and i'll illustrate it with a slide and a riddle that you can think about while you're listening to the rest of the presentation artificial intelligence is not it's not a substitute for what i call oi organic intelligence your own 40 watt brain and a good way to illustrate that is a a riddle so here's here's the story i'm out in the field exploring for mineral deposits and i come to a fork in the road i know one road leads to the discovery that i'm looking for a mineral deposit that i'm looking for and i know the other road leads to a place where i'll be forced to listen to accordion music for the rest of my life i don't want to go there so standing down 20 meters down one fork is a geologist who always tells the truth when you ask him a question standing down the other fork is a geologist who always lies when you tell ask him a question i have one question and i can ask it to only one geologist what question do i ask and which geologist do i ask so that i can avoid accordion purgatory i'll let you think about that in your oi and we'll come back to it later on here at the end of our our presentation okay so um the the the slide here like stocks economies take the escalator up and the elevator down and and so i'd like to look at a couple of slides that show the impact of the covet virus because that's the other 800 pound gorilla in our room right now just to see how it affected metals and this particular picture is a picture of four different or a graph of four different metals gold silver platinum and palladium and as you can see all of them took a significant price hit in early february through march and they went down 50 percent in some cases uh and and in particular palladium was hardest hit it went down almost 70 percent from where it was um sort of pre-virus and it's recovered back to about where it was at the beginning of 2000. the same is true of silver platinum is never recovered it's still low gold on the other hand because people still look at gold even though there's lots of industrial uses for gold people still look at gold as a store of value it is money and so gold went up it took a a quick hit the first few days and then it went up and it's now this morning it was almost 1800 an ounce uh that's up significantly from where it was at the beginning of the year uh and if we look at where we were last year it's several hundred dollars up so clearly um the metal the impact on metals was not only uh immediate but it was significant and the same is true of a lot of the other metals like copper lead and zinc that we mine here in alaska on the exploration side the covet impact was was pretty much the same the industry was on a slow rise this is our escalator up it was on a slow rise for both new deposits found and amount of effort or or capital being spent exploring and then along came february and everything went went straight down a very very rapid fall in some cases 50 companies lost 50 percent of their market capitalization their essentially a market value and most of them have recovered a bit in in but in terms of exploration exploration stopped and it really hasn't started again we'll we'll come back to that a little bit later with a more focus on alaska in particular okay next slide is a covet impact on which metals really got hammered the worst and it surprised me when i saw this silver uh 69 percent almost over two thirds of the silver production worldwide was shut down by the covet virus other metals uranium zinc lithium really hard hit most of them again those mines shut down once they got a coveted plan together they kind of pick back up again but again immediate and and rapid shutdown now alaska in particular was we did pretty well we weren't significantly impacted at least at the mine production level none of the gold silver lead zinc or coal production was significantly affected by the covet virus so um one of the things that quickly came up is how do we deal with it and and this is an evolving process it's not something that anybody knows the answer to quite yet but we do know there are going to be some changes um there's there's there's a growing geopolitical uncertainty there are certainly places in the world where you'd rather work um covet viruses change some of those dynamics some countries that were favorable maybe not so much anymore this pushes people to look um essentially it will increase resource nationalism and by that i mean um people will look for sources domestically as a more more often and more vigorously than perhaps they did before the virus that also was going to mean sort of changes in community relations agreements that are out there because no one really had no one really had this on their radar screen and how to deal with a pandemic of this this nature those will have to be revisited the other thing is shown because there's not a lot of people moving back and forth from corporate headquarters to to mine sites that you need stronger and more empowered local management those those people are going to have to people that are running the mines are not going to be able to lean on the corporate headquarters for their support they're going to have to make their decisions on site uh literally every day so it's going to require a more sophisticated in-country management profile and again at the very end all of the esg the environmental social governance programs that are associated with mining are going to be revisit everybody's going to look at them and see what do we need to change how do we need to improve these to to deal with the kind of of pandemic that we've obviously living through now obviously you can avoid you can avoid reality for a while but you can't avoid the consequences of reality and so what are we actually doing about this and one of the one of the first things that people look at is what are the metals most affected by this sort of of uh dislocation and in particularly the advanced technology metals and the slide that i'm looking at here that you're seeing kind of surprised me it was it it shows different metals and how much they're affected by things like uh autonomous vehicles or electric vehicles robotics renewable energies oil and gas it applications things like that and the metal that that the industry thinks is going to be the most affected is tin that's what i said i i was quite surprised tin has been around for 4 500 years since the bronze age when you mix tin with copper and create bronze and it's had its ups and downs but it's not the first metal people think of when you think of an advanced metal that's affected by our new technology our new society but it's affected by all of them um right next to it is a metal that probably everybody's heard of lithium because of lithium batteries and lithium battery applications cobalt which is an application there's a metal that also goes into batteries but is also a kind of a high-tech aerospace metal and silver nickel they're all seriously affected um by the demand for advanced technologies and so when you're looking at at supply and demand curves the question is okay how are you going to deal with this you know this is a this is a reality you're going to have to deal with you can't just ignore it the demand is out there and so let's take a we'll take a couple of quick look at a couple of quick metals here and this is a more global picture right now copper is historically has been a a leading economic indicator it it leads economies up and it also leads economies down when they start to turn down it's been that way for a long time and the statistic you see here is a resting in in the next quarter century or so we will use more copper than we have used in the last three thousand years it's an astonishing number and you wonder how could copper demand and supply keep up and how how why is the demand going up so quickly there's a there's a little fact at the bottom of the page the average electric vehicle um uses four to six times more copper than the average internal combustion engine vehicle and the average internal combustion engine vehicle of today is far more copper intensive than one of say 20 years ago think about all the electronic things the motors and the seats and the heaters and all the things in your cars they're all copper related they're all copper driven and so copper demand has gone up uh and it's it's it's expected to go up to the point as i say that we'll use more copper in the next 25 years than we have in the last thousand years so one of the first things people look at is okay where is this gonna come from the s ide here is a very simple pie diagram of of unfriendly jurisdictions and friendly jurisdictions and almost half of our copper today comes from unfriendly jurisdictions and by unfriendly i'm think i'm i'm meaning more from a political and a social aspect as places to do work to put people um and just to do a business it uh there are places that have that are very well endowed with mineral deposits and particularly copper deposits that most companies won't work and so those places are are are as they say they're providing something on the order of 40 45 percent of our total copper that could be very dangerous down the road so a supply and demand dynamics could could shift dramatically down the road let's look at lithium right now we're producing about as much lithium as we are using and for the next few years it'll probably stay that way new supplies are coming online as demand is is projected to increase but as evs really take over or become more and more common we're going to find an awful lot of demand that's not met by supply so lithium is going to be one of those metals that sees dramatic price rises in probably five to seven years out maybe there'll be new deposits found but you can't you know what we can see in the pipeline today and it takes quite a while to get our mine online today in this in this day and age we don't see those mines being able to supply the kind of lithium we need that also pushes people to look at substitutes for lithium as a different sort of battery now one of those one of those substitutes is vanadium but vanadium is not something you're going to see vanadium they're called redox reduction oxidation batteries there's one metal in the entire battery it's vanadium it moves back and forth from pole to pole really simple really robust work well in hostile environments that are hot and cold like alaska but redox batteries are not are not something you're going to shrink down to a phone or a car these are industrial scale batteries these are utility scale and commercial scale smallest would be a residential scale but the idea here is really compelling it's a simple essentially no moving parts no no maintenance on the thing and for storing renewable energy solar wind that otherwise it goes to waste that you can't use that's always been a problem what do you do with it where do you put it so you can bring it back when you need it redox batteries vanity and redox batteries are are one of those answers and the projected use of them is gonna is is quite steep ask the average geologist in alaska and i've done this when was the last time you went out looking for a vanadium the answer is never it's not a metal that anybody's looked it's always been a byproduct of iron and steel and iron ore mining and it's used in iron and steel applications but it's never had a uh it's never had a use like we're seeing in a redox battery so there will be people looking specifically for vanadium right now there's one vanadium mine in brazil in the entire world that mines vanadium specifically for vanadium so there's there's a there's a there's a story to be told there now rare earth elements people have heard about rare earths and they're all over the place literally all the technology you're using right now to watch this is is loaded with with different kinds of rare earth elements there's about 17 of them and quite frankly they're not really rare in the earth's crust they are that what's rare is concentrations of them in economic amounts that you can actually go and mine at a profit uh they're all over the place uh in low quantities but you can't you can't mine them that way and the places that our mind primarily right now the dominant supplier of both raw rare earth oxides and the products created from is china over 90 percent of the rare earths are mined and and turned into value-added products in china and this that kind of reliance really came under under stress when the covet shutdown literally stopped global economics altogether people were really concerned about where are they going to get rares to use in your cars your cell phones uh cameras i mean basically a a cell phone has about 16 of the 17 rare earths it also has things obviously like lithium and copper and tin but if you if you uh you'll see in one of the pictures here in the next slide recycling that you get you take an average phone you get one milligram of total rare earths all of them together makes one milligram 20 phones to get a gram 20 000 phones to make a kilogram and that's sort of the the sale price goes from a buck and a half a kilogram for the cheapest of the re members to 750 a kilo average maybe 25 bucks or so in a phone in in that group of phones you're not going to be able to to recycle 20 000 cell phones for twenty five dollars so it's gonna it's gonna it's one of those things that right now there is no recycle uh no recycling of any significance for the rare earth elements there are people thinking about that and looking at how you build a product to make it more available but a lot of it is going to be tough and there's a picture of somebody here just basically a set of hands with a bunch of burned plastic and metal all in a conglomerate that was an attempt in pakistan a 50-foot high pile of electronics they've poured accelerant on it it's diesel fuel and lit it on fire gigantic black noxious clouds coming off of it and what you end up with is a real mess of metal and plastic kind of all stuck together that's not how you that's not how rice recycling should be done so there's there's an issue there okay so we're back to sort of a fork in the road if we now recognize there's supply and demand issues here coming up in the very near future and some of them here right now what are you going to do about it and and the the slide here on copper exploration versus discoveries is a really telling slide uh up through about 2008 we were doing great we were the money that was being spent somewhere between uh a half a billion and two and a half billion dollars a year just on copper exploration worldwide we were finding quite a bit of resource with it and and then after the crash after the 2008 economic crash a lot more money was spent it went up to for almost almost 5 billion dollars in 2012 just for copper exploration but the number of new discoveries fell off dramatically to the point in the last three years um actually four years 16 through 19 we found no new significant deposits and we've spent uh probably 30 billion dollars worldwide and so when you look at those it there's there's there's part of that is due to the fact that things like copper major big copper deposits are somewhat easier to see at surface but we're now all the easy ones have been found or lots of them have some of them are in jurisdictions that they will never be mined either from a political or an environmental standpoint part of the reason people like coming to alaska is to look for these big deposits because it is somewhat underexplored particularly compared to some of the other major jurisdictions in the world sad fact is that's that story less and less discoveries over time is true of almost all the metals the next slide is a composite that shows gold uranium base metals which copper lead zinc would be in the bulk sort of iron ore and phosphates and things like that they all have that same curve there's been a drop since the sort of from the mid 90s to the mid 2000s there was a sort of a spate of new discovery and it's dropped off dramatically since then despite the fact that a lot of effort has gone into finding these the average the deposit is now found 30 meters underground worldwide so it's not sticking out of the ground where the guy the burro and the guy with the burrow in a pan can find it it's getting tougher the other thing that plays into this is sort of in a in a in a real world sense only about half of the deposits discovered are ever mined and that's pretty much normal that they just don't have the right economics don't have infrastructure they don't have are they or they're difficult to recover the metals metallurgically difficult all kinds of reasons uh probably more important than that because that number has been pretty steady for a while the lag time from the day we discover a new deposit to production is almost 20 years now that it asks the average investor if you'd like to make an investment with the possibility of making some money back in 20 years and there's no guarantee you'll make money back not every mind that goes to production makes money it's it's so that is that that's a really tough nut so people are looking for ways to reduce the time frame to production from discovery to production without um without cutting corners of of one sword or another those that's that's easy to say and easy to think about it's not as easy to do so that is one of the big one of the big issues facing the industry and particularly with the u.s there's a chart here of us reliance on metals we get an awful lot of our metals from foreign sources and some of them like the rare earths and some of the other high-tech metals we get we we import 100 of those metals now that may change post covid but that's also it's a long-term issue you're not just going to turn on a mine with something new that we've been importing from portugal overnight those are long-term effects and one of them that's on this list that you'll see that for anybody in alaska you're going to laugh out loud it's on sort of alphabetical order and one of them is arsenic we import 100 of the arsenic that's used in the united states now anybody in fairbanks knows that you've got arsenic in your water literally so why and we get it from where we get it from china from morocco and belgium and and so there there are some metals that we can probably a pretty good idea we can supply ourselves but those industries will take some time to get off the ground okay so one thing that that alaska's good at that we can you know they say you can't base your reputation on what you're gonna do you have to base it on what you've done and and so when you look at alaska's why do people come here one of the things they compare is political stability and the potential to find these larger ore bodies that bigger companies can look at as a long-term investment particularly that 20-year time lag alaska is is in good company here they're called tier one deposits they're for gold deposits they'd be something on the order of say 300 000 ounces of gold per year and and the chart that you're looking at here is basically a company or a group fraser institute in in british columbia does a survey every year of attractiveness in different jurisdictions around the world and alaska always fares pretty well in terms of mineral potential because we have significant mineral potential and the chart here shows australia canada uh and the u.s have a significant number of those larger deposits and they're also considered at least politically in in a world sense politically stable pogo mine gold mine and the fort knox mine here in fairbanks are both on that list so two out of the five u.s large producers are right here in alaska part of the reason people come here the slide behind that is that mineral institute survey from last year it came out in march of 2020 alaska was fourth out of 76 jurisdictions worldwide in terms of mineral attractiveness and again this is this is people working all over the globe and and so when you look at the chart you'll see some some stars here that i placed on places that i've worked uh around the world that i thought were just difficult really tough places to to work and as it turns out these are you'll see them on here zimbabwe the drc venezuela zambia tanzania they score near the bottom of this attractiveness list so i got to look at this list and think it's got some some reasonable application it's it is real we'll see some other stuff on that later so let's talk a little bit more about alaska mining and when you mention alaska mining to people unfortunately sometimes they think of of television shows reality tv that i i don't even want to talk about sometimes they think about old things like this particular pictures of a dredge this is one of the old platinum dredges was out at good news bay still out there out in far southwest alaska and the cool thing about this was during world war ii this dredge was our major source of of platinum and iridium we actually had the us army guards guarding this dredge all through world war ii because of the the the aleutians had been taken over and iridium was important because our planes needed to go faster and the only way you do that is with avgas high high octane aviation gas and the only way that you keep the spark plugs working in a plane with avgas is the electrodes are the compound you use is iridium has iridium in it and they don't corrode and they don't they don't degrade that gave us a significant speed advantage over our adversaries and that that iridium came from this dredge right in here in alaska now it's shut down in the 60s and hasn't hasn't really worked since the other thing people think of as the old style gold mines this particular picture of is a stamp meal a five stamp mill in fairbanks these are pretty crude mills i've seen them actually operating around the world they're still places where they run this was made in the by the joshua hindi iron works in san francisco and shipped all the way up here on freighter and and river boats and then hauled by horse up to uh up to the fairbanks district or it clattered away um until the world war about world war ii um so those are kind of the old style things when we look at what where we are today is a completely different picture a much more modern automated systems we produce zinc lead silver and gold coal about a million tons of coal from healy in in the heli area and looking just at the the healey coal basin there's about 250 years of reserve there right now 250 million tons and there's resources outside of that of another 750 years worth at the current production rate so these are these are huge huge coal fields here and the good part is as as buyers in korea chile and other places around the world have have purchased this coal it's low ash it's low sulfur it's low mercury it's really benign in terms of a coal product it's good boiler coal now the other thing that this slide shows we have about 200 plaster mines still mining in alaska and these are mines that are you know three to ten people maybe somewhere a few bigger than that and they mine from a few hundred to say ten thousand ounces a year tops so these are sort of the smaller end of our our mining specter spectrum but they're distributed throughout the state in places where good-paying jobs are hard to come by so these are these are real economic engines even if they are relatively small excuse me last year the industry also had something like 64 companies that were working on different exploration projects we'll come back to that a little later because that number is dropped as you might imagine this year rather than talk about rocks which i'd love to talk about but it would bore everybody primarily one of the things i wanted to talk about was mine safety and you don't think about that because you don't hear a lot about it this particular picture is 200 ton haul trucks up at fort knox and the first thing you notice when you look at them is they're driving on the wrong side of the road and you look at this and you think well why would they be doing that well basically if you're driving left hand drive like your regular car it's much safer to be close to the ditch so you know where the edge of the road is mines worldwide have found this out many many uh years ago virtually every surface mine in the world is wherever your steering wheel is that's the side of the road you're on so that you don't want one of these 200-ton trucks going off the road so that's one of the first safety things it's obvious in this picture the next slide is basically u.s mine fatalities it's a kind of a morbid thing to talk about but it goes from 1970 to last year last year there were 1915 fatalities in the metal mining industry in the u.s last year 15. now the goal is zero one of these days we will do that we will get there it's improving every year as you can see by the graph but to put things into perspective as tragic as each of those 15 fatalities was the highway safety board put out some specs here recently 6 500 pedestrians essentially pedestrians walking along looking at their phones or talking on their phones in the street 6500 of them were killed in 2019 alone 6500 that's a 30-year high that number is increasing rapidly and so that's a real significant problem that's 400 plus times the number of people who die in a mine so a mine is actually a lot safer than you might think and when you look at injuries the next slide you have to look all the way to the bottom of the list to find mining quarrying oil and gas are all lumped together in terms of number of cases in a year and we're talking something on the order of 9 800 cases versus let's say health care 548 000 cases in a year so you're you're a whole lot safer in an active mind today than you are probably at home i think that's fairly safe to say the other thing that we don't see a lot of is reclamation which in the last probably 40 years plus every mine that goes to production has to have a reclamation plan and and essentially capital to go with it bonding this particular picture is of some of the best in the world this is yuciabelli's coal mine down there healy and sort of in the background you can see currently mined activity going on in the foreground or in the middle ground sort of reclamation is in progress this is newer and then final reclamation fully vegetated out in front of us excuse me and i think the thing that that strikes me here is when you look at the reclamation it's done with gps driven heavy equipment that uses the original land surface topography and re-contours using those gps units recontours the land to as close to its original outline as possible pretty high-tech stuff for for reclamation pretty cool okay so excuse me in the background obviously not everything that's mining in alaska is is good so a few words on the warts that we have is probably in order uh this slide was the easiest one i put together this is alaska's list of mid-tier gold mines there are none zero it's a blank slide um and that's that's unfortunately a function of it costs more to work in alaska that is true uh it takes longer to put things into production and so people are looking not for it it costs almost as much to put a small mine into production as a large mine and so the large mines have a lot better ability to to weather cycles up and down like we're in right now and so mid-tier mines there just aren't in there's the plaster mines and there's our large mines that are like like the fort knox and pogo and kensington are producing large amounts so that's one of the things we don't have that most mining industries do have in most parts of the world this same fraser institute survey i mentioned earlier um they also look at regulatory policy potential and alaska gets hammered every year on this uh and without and i it's hard to argue with we're 17th out of 76 jurisdiction we're in the second quarter we're not even close to the top part of this is is we have a much more complex land system here in terms of state federal native and private land conservation units all over the place and it makes it really difficult to permit uh their efforts to sort of streamline that but it is a long process as i mentioned something on the order of 20 years so alaska usually gets hit pretty hard in that in that part of the survey with some justification the next slide is i've got the timeline from initial discovery through reclamation uh and sort of stages that you might see from feasibility work and financing construction and then the list of the operating minds and some of the the more advanced projects and how long it took them to get where they are and so pogo and fort knox are at the low end in terms of mines it took them about 12 years from discovery to production it's pretty good greens creek and red dog we're about 16 years and then we look at the exploration programs uh things like let's say donald creek out in far southwest 25 years and counting uh pebble is 32 years and counting borneite up in the alaska range is 73 years since it was discovered it was it was literally it was a world war ii era kind of thing and so um some of these things fall afoul of like borneite there was access you just couldn't mine something that far away from access other things are tied up in all kinds of other issues so it's not something that's uh easy to do i also have a there's a survey that cnbc did last summer that alaska scored 47th out of 50 states as the in we were almost at the bottom in terms of business attractiveness in the us and uh the the categories that came in that we really scored poorly we were worst in the nation for access to capital 49th for education 48th and cost of doing business now that's the one for the mining industry that really does make a difference cost of doing business because people look at that before you start investing in alaska is what's it like to work there what's it cost oddly enough the our best category we scored 20th on was business friendliness which is kind of a dichotomy we were very friendly but you can't do business here it's just an odd mixture odd mixture of things so we have some we have some things to to deal with now i mentioned covet impacts earlier globally but in terms of alaska i said you know the main mines did pretty well they weren't significantly impacted in terms of their production but the exploration development side of the industry was really hard hit couldn't get people into the field you couldn't get equipment you couldn't even get air air traffic to bring goods and services in so the exploration industry is only now just getting off the mark we're sort of late june early july programs are starting and we'll look at some of those here shortly but it really did hit the exploration industry very hard and as you might remember we were in april there was 21 unemployment in alaska that was the nation's highest we're back down kind of where the average is now at about 13 that's still double what we were seeing last in the last few years there's an awful lot of people who still have not gone back to work that on sort of at the same time but for different reasons oil prices of course plummeted from 60 bucks to less than 10 there were actually days when the price of oil was negative you had to pay somebody to take it off your hands that didn't last long those were kind of strange days but uh that obviously has affected the state economy in terms of the revenue that comes through the pipeline comes out of that oil and pipeline obviously our recovery especially for the mining industry is is going to be like every other industry it's going to be a long slow slog back up to to anything you know that we can consider normal okay so why why is alaska so well developed and this is sort of the geological end and i won't i won't go too much into this but there's a picture here of chiginigak volcano that's out on the alaska peninsula it has a crater that had an ice lake in the middle of it and the volcano alaska volcano observatory noticed that it was starting to melt this is a few years ago and so eventually hot fluids were leaking up into this lake from the volcanic activity at depth and it thawed the entire lake and this is really warm it's like a hundred plus degrees fahrenheit water and it's acidic about battery acid acidic it actually breached the side of the volcano and flowed down into the streams and into a place called mother goose lake and it killed everything i mean every bit of living anything was killed there's a picture of a geologist standing next to this thing next to the water flowing here what they found out later on was that this kind of pulse of acidic water had flown into flowed into mother goose lake multiple times in the past this has happened again and again and this is this comes back to that idea that the ore bodies are forming literally as we speak this is the kind of process that brings metals to the surface in a volcanic setting that eventually become ore deposits so how do you bring them to surf how do you get these metals and these fluids to to create an ore body you need plumbing this is simple as that plumbing in this case is fault are faults and fractures in the earth's crust and the next picture is a famous one that will be in textbooks for decades to come vine road down in wasilla where where the the 7.0 quake back in the end of november of 2018 caused the ground to shake and this kind of sediment that this that the road was crossing is called thixotropic when you shake it it turns liquid and the road literally flowed and it looks like a teardrop like a like a it the road literally flowed away from the around it and those fractures as much as it disrupted our economy those fractures are the things that bring those fluids up into the earth's crust and create the ore bodies that we think of as as mining now the next slide is a picture of the whole state there's lots of little colored polygons those are geologically separate blocks if you building blocks of alaska and alaska has been kind of stuck together from a bunch of different parts by plate tectonics over the last 125 million years so there's some 50 of them here some of them had mineralization when they got here some of them were created mineralization was created by by the act of actually slamming into alaska and others were created later and what i'm showing here is over there red dots are gold prospects there's 4 400 of them documented in the state lots of belts that you can see all over the state and this is part of the reason that alaska's is known as a place to go look for gold deposits there's lots of lots of possibilities out there now if you're not looking for gold the next slide is the same tectonic map if you will but it's the other elements that we have a lot of there's 2 700 other non-gold elements uh prospects here from copper and lead zinc things to over 200 platinum group element prospects 500 plus strategic and critical mineral things like like the rare earths graphite tin tungsten tantalum niobium those kinds of metals alaska is very has a lot of them those not a lot of exploration has gone into those recently but we can see that's probably a place people will be looking in the near future so i mentioned elephants this is just a quick list i'm not going to go into detail but these are the elephants that people come looking for things like red dog and pebble and boronite these are world-class deposits that people want to find here and because of our under prospected nature that's why they come here they're still out there to be found some of them sitting right at the surface and so those are those are some some of the things that draw people to do exploration now exploration-wise they show a graph here of alaska exploration it's kind of a two-hump camel uh and in the upper right there's a there's a worldwide exploration curve of the same group from about 2 000 to current and what you see here is that even though the dollar values are higher worldwide than alaska the shape of the curve is identical it's scary identical and it really does tell you that we are part of a big global i hate the term village if you will but we are we are part of that same global economy um and so when i when i started the year people would ask okay what are you seeing coming out this year for exploration expenditures and last year was a was around 160 million or so and spent exploration in alaska and it's on the uprise and i would have said 175 to 200 million in 2020. now fast forward to today july 7 i'm thinking maybe 50 to 75 million if we're lucky a lot of that was just delayed because of all the covet issues that we faced and so if you look at worldwide exploration it's going to be the same kind of thing and the next slide just is just an underscore that only about a percent and a half average of mine revenue is goes into exploration so it's a really small piece of revenues that are used to go into exploration this particular year 2020 that number is probably going to be zero or very close to it because there's just no way no way you can actually do the work nobody was really set up to run an exploration program coveted wise and there are companies in alaska doing it but they're uh they're writing the book literally on how to work in in a pandemic and nobody had ever done it before who spends the money in alaska that's always a question that comes up and prior to 2000 or so canada was 25 or 75 of the total expenditures in the u.s was the rest virtually nobody else worldwide played up in alaska and then as as time went on australia came forward japan came forward uh by 2017 australia was 20 of the total last year they were 46 of the total canada was 37 they're 75 percent plus of the total dollars spent in alaska came from canada and australia only about 14 15 percent came from the us oh it's kind of an arresting number you realize that they're also taking canadian australian dollars are about the exchange rate the same exchange rate about 72 75 somewhere in that range so they're taking a significant hit rather than spending that money in their own country so obviously coming to alaska there's a draw there's a reason they do that this slide at 2020 load exploration is a sort of a list of who's active right now uh mostly uh gold and copper exploration a little sort of poly metallic no strategic metal exploration this year and then there's a second secondary delayed group and they include places like arctic tetlin bornite and those places in the last few years had those three together would be probably a third or more maybe a half of the total exploration those were big projects that were are essentially on hold right now while the pandemic is being reviewed and how how do you do business you know how do you get back to work they may go some of them may go back to work some of them won't okay so the the slides here the rest of these slides are basically people doing work out in the field so one of the things i like to look at there's two slides two pictures in this one slide of a a bunch of guys with with uh with uh sunglasses on it's a beautiful day and they're out in the field somebody's paying them to be out there uh you know the future's so bright i gotta wear shades uh the other guy in the lower right here though it's a rainy wet interior alaska bog nasty day he's covered in rain gear he's obviously wet probably thinking nobody can pay me enough to do this job now there's a picture the next picture is a bunch of people with a helicopter that and i like this picture because of the attitude that is exuded by these people just to look the stance uh of these are explorationists they're not afraid to fail they know that you're going to fail more often than you succeed but you get up and dust your pants off and you do it again that's the exploration that half the half full glass that optimism that's what drives people in the exploration game and you have to it has to be that way there's another picture here actually it's me standing on an outcrop in the middle of nowhere with the new snow falling in the background and you realize it's it's time to get your work done here because alaska does not wait for anybody um and and we are we aren't the top of the food chain here at all we're not even close um picture of people working around a beaver on floats down in southeast alaska this is going to be one of the places that has a slower work program this summer and that's going to affect a lot of people particularly barges and boats and air traffic on floats that to resupply us and support mineral exploration all over southeast alaska a picture of a couple of geologists on a very steep hillside the kind of thing that you look at and it gives you vertigo just looking at the picture uh one false move and you're in trouble but you look at these people and the smile on their faces they're not thinking about that at all they're they're chasing the next door body that might be at their feet uh there's a picture here of a bunch of people standing in front of an attic you can see a it's a tunnel in the background it's ki d of caved it's in southeast it's you know um temperate rainforest kind of thing but if you the thing i really wanted to point out here was you look around people's ankles and you'll see that everybody has boots on their rain gear on over the boots and they've taken flagging and tied it around their ankles so their rain gear is tied tight to their boots well basically this mine you can walk into but the first hundred feet being at the lowest elevation has water that's over your knees and so you walk up out of that into a dry mine but you got to go through the water so the simple way there's here's you know the simple fix for a simple problem just tie flagging around your rain gear and walk fast pretty simple other thing that you'll see in alaska is mentoring going on this particular picture of three people in the mining industry with probably 150 man years of experience these are very experienced guys they're all working at us at one project this couple of summers ago mentoring new people and the following slide are three people that i helped mentor that went from being they started at the bottom they started at the very grunt level and they worked their way up to points where one of them is international has his own company works internationally another ones actually run major mine exploration in foreign countries and they started right here in the bush in alaska but that mentoring ability to to to grow through the industry is a really important piece of uh the mining industry now there's a picture here of somebody's knee with a bunch of mosquitoes on it everybody realizes that despite the fact that we've got all kinds of cool technology mosquitoes are still the problem we still haven't figured out how to deal with them you just have to you just have to live with it uh the next picture is of of caribou this is one of those days when you see caribou in a snow field thousands of them migrating and you realize that this has been going on for centuries and centuries millennia it's a spectacular uh thing that you get to see doing the kind of work we do the next picture is my boot which is a size uh 12 boot standing next to a big footprint from a bear that i'm glad i never met this is down in southeast you can see shingled rock around it we're standing down on a beach and i don't make any impression on this beach but the bear was big enough that he squashed all of the rocks down into the mud he was a big monster i again glad i didn't see him but it also makes you realize you're you really aren't even close to the top of the food chain in this part of the world um a picture of a couple of guys that are again the ingenuity in the field uh using a gold pan to to as a as a as a grill to uh do some barbecuing of some steaks on the cat on the on the tracks of an old cat there's a guy here in in one of the pictures one of them has a good attitude and the other one looks like a member from zz top he's not but he sure he sure looks like it and a couple last slides you got to have a sense of humor these two guys are laid out in us in a shallow trench we went to pick them up with a helicopter it was tough work they were doing and they were kind of telling us we really don't want to do this work and so they're all laid out with their pick and shovel look like they're ready for burial and then there's this this saying that people say you should never say never right well one thing i think is safe to say never let a driller give you a haircut and there's four panel pictures here of a young lad who needs a haircut and a driller who's holding a pair of clippers and he kind of doesn't even look like he knows what he's doing with him but in the end he makes this kid look like pippy longstocking with hair sticking out all over the place and everybody got a great laugh out of it but there's a never say never never let the driller give you a haircut okay so we're basically done i'll come back to that oi if you haven't figured it out yet um the answer to the fork and the road riddle so i can have one question to one gi one geologist doesn't matter which one and then here's the question i ask them if i ask the other geologist which way i should go what's he going to say so if i ask that question the geologist always tells the truth he knows that the other guy is always lying he knows the other guy is going to lie to me and tell me to go down this fork that's accordion purgatory so i go the other way if i ask the geologist who always lies the same question he knows that the other guy always tells the truth so he's going to lie to me and tell me oh you need to go down that route so whatever way he points i go the other way now that's when you when you when you think it through it makes perfect sense and i'm sure there's a an algorithm somewhere that could figure that out fairly quickly maybe it's already been written but most people have figured that out over time that's organic intelligence that's the kind of thing you need to use with your ai to to get that step up so there's the answer to our riddle and that's basically my talk the last slide is a picture of a rock that i actually think spells it's rocklish it looks like it spells alaska this rock is so deformed it looks like it spells alaska and so with that i wanted i would like to say thank you and thank the university of alaska for allowing me to speak to you today and wish you stay well please thanks