By Alastair Ford, in Alaska

If the silence up at the Nixon Fork gold mine in Southern Alaska seems slightly eerie, then at least theres nothing sinister about it. Its not the calm before the storm, even if the Alaskan winters do come early, and the clouds are already rolling in grey and low as August draws to a close. Its not even a lurking sense of menace at the hidden, but well-attested presence of bears in the woods nearby. No, the silence, and its associated eeriness derive from two distinctly separate, but benign factors. One: despite Nixon Forks setting at the centre of hundreds of square kilometres of mountainous and wooded Alaskan wilderness, there are no birds in the trees. The birds know how harsh Alaskan winters can be, and theyve already embarked for warmer climes, even as summer draws to a close. The first snow falls have already landed on the higher mountains. The second reason that its eerily quiet is that, despite the presence of nearly US$140 million worth of plant and equipment, Nixon Fork is at present lying idle.

New owners Fire River Gold have plans to change all that, though. Big plans. For a start, although the silence is eerie, its not total. Many tens of metres underground, at the upper levels of a well developed old mining complex, a solitary drill rig rumbles away, punching into the rock at a 45 degree angle. The core it pulls up will be assayed, and the data fed into the spreadsheets that will form an integral part of the preliminary economic assessment that Fire River hopes to deliver on Nixon Fork by December. Across the camp, halfway along the private runway, another drill rig is turning too. Theres more noise too, as the three planes that Fire River has chartered to carry in assorted fund managers, analysts, and journalists come into land. The object of the visit, arranged by Fire River president Harry Barr and his capable staff, is to allow all interested parties a good close-up look at Nixon Fork, and all the potential it has to offer.

First off, its worth pointing out that if you were starting from scratch, there might never be a mine at Nixon Fork. Its remote, the metallurgy is complex, and the current resources dont amount to much more than a hill of beans. However, theres no doubt that there gold at Nixon Fork. Former owners Nevada Goldfields and St Andrews extracted more than 100,000 ounces at an average grade of around 42 grammes per tonne, and the drill core that St Andrews left behind before it imploded in the general morass of the global financial crisis, has lately been showing that theres still a lot more ounces in the ground.

How much remains to be seen, but Harry Barr, whos an old hand in the mining game with several successes to his credit, is very clear in his mind about what sort of operation he wants to create. "Its going to be the kind of mine where you drill every year and youll find 50,000 ounces. And we think we can keep this going for a very long time. As long as we can keep three to four years worth of mine life ahead of us, we could do US$25 million per year." He pauses. "Now, thats not something you can buy the stock on", he adds, with a smile, "but its a very high grade mine, its got good widths, and theres tremendous infrastructure with this project".

Its that last factor thats the key to the economics at Nixon Fork. Estimates vary as to how much St Andrews sunk into Nixon Fork in its efforts to make the mine pay, but US$100 million is a good, round, ballpark figure to be going on with. The power plant thats already on site consists, according to Harry, of "three of the most beautiful looking gen sets youve ever seen". Those will produce more than enough power at an estimated C$1.50 per litre of fuel flown in, to power the entire operation, including the jaw crusher, the cone crusher, the rod mill, the ball mill, gravity separator, shaker table and concentrator, all of which are on site, and all of which will crash nicely through the eerie silence once production gets going next year.

Theres plenty to be done before that, though, and vice president, mining Richard Goodwin knows hes got his hands full. But hes an experienced man, too, having cut his teeth over the years with Westmin Resources, MRDI Canada, Snowden, and Redcorp Resources. He admits that there might be what he calls "choke points" in the existing plant which may require attention once it gets up and running, but what really seems to pain him is not the challenge of getting the plant up and running, but having to admit, as an engineer, that Nixon Fork is a "geologically driven mine". That admission produces a smile on the face of Larry Hillesland, manager of geology, who by way of mitigation for the complexity of his geological explanations offers to his listeners some nice core from the gold-copper skarn that predominates across Nixon Fork.

To date, two mines have been worked, the Mystery mine, and the Crystal mine, and neither seems to have covered itself in glory. Grade control was poor, in spite of the high mining grades, and cost rocketed. Harry Barr reckons that with a bit of effective management and a team thats able to draw on the lessons of the past, costs could come down to around US$650 per ounce. "But we dont know that yet. Thats what these studies are going to tell us in December", he says. "And then weve got to go out and mine it and see what it really is." The company will need more money before then, but not for a little while, as theres around C$10 million already in the bank. When the time to raise funds comes, there ought to be plenty of interest, as gold in a safe jurisdiction is increasingly attractive. Investors may want to see Fire River open up the way to proving up more ounces before they wade in with their chequebooks, but negotiations to acquire the rights over the neighbouring tenements are ongoing, and will be concluded, according to Richard Goodwin, on a timetable that suits Fire River.

So, itll be quiet for a little while yet up at Nixon Fork, but any fans of serenity should enjoy it while it lasts, as the crushers will be crushing and the mills will be turning before too long, and, with any luck, sizeable quantities of gold will be moving through the plant on their way to being converted into Canadian dollar cashflow. Watch this space.

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Article courtesy of MineSite.com

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