By Margaret Bauman, Cordova Times
June 5, 2020
Canadian backers of a mining project in the Chilkat Valley of Southeast Alaska say it holds potential to become a future high-grade, underground copper-zinc, silver, gold and barite mine.
Further exploration and evaluation work are still needed though for Constantine Metals’ Palmer project, located south of the Haines Highway, at the headwaters of the Chilkat River, critical spawning habitat for all five species of Pacific salmon, including a renowned coho run.
The Haines Fishermen’s Alliance, Southeast Alaska Conservation Council, Rivers Without Borders and the Chilkat Indian Village of Klukwan have voiced concerns that the mine would threaten critical fish spawning habitat. They have asked the Alaska Department of Environmental Conservation to take a second look at the project, in light of a recent U.S. Supreme Court decision in the case of County of Mau v. Hawaii Wildlife Fund.
The Maui decision recognizes that polluters cannot avoid the Clean Water Act’s permit requirements just by pumping pollution into the ground where doing so is the functional equivalent of discharging that pollution directly into streams, lakes and oceans.
According to Gershon Cohen, project director of the Alaska Clean Water Advocacy in Haines, Constantine should not have applied for a groundwater discharge permit for the release of hundreds of thousands of gallons a day of wastewater into a gravel bed so close to surface waters, including Hangover, Waterfall and Glacier creeks.
“The Ninth Circuit had already ruled a much more rigorous surface water discharge permit would be required,” Cohen said.
“Constantine has the responsibility to apply for the correct permit,” he said. “DEC is not forbidden from giving them the ‘wrong’ permit, but they have a practical and ethical responsibility to make it clear to an applicant that they have asked for the wrong permit.”
Alaska Department of Fish and Game data shows that the Chilkat River supports commercial, sport and subsistence fishing for salmon and that 90 percent of Chilkat Valley residents rely on salmon for subsistence. The area is also critical habitat for bald eagles and black and brown bears, all of whom come to feed on the salmon. The Alaska Chilkat Bald Eagle Preserve lies just downstream of the Palmer Deposit.
According to Gene McCabe, an environmental program manager with DEC, the agency is conducting an informal review of the Supreme Court decision as it relates to the Palmer project. “The division continues to review the supreme court opinion released on April 23 with interest,” McCabe said on Monday, June 1. “We have not received a final dye tracer study from Constantine Metals. The information in the approved study is one of the numerous data points we’re reviewing during the remand. Remands do not have a regulatory timeline, and the division continues to evaluate the permit and topics highlighted in the informal review requests.”
DEC has endorsed Constantine’s approach so far by granting a waste management permit in July 2019, over the objections of several conservation and tribal entities. DEC agreed to reconsider its decision once the Supreme Court decided the Maui case, which was pending at the time, but declined to suspend the permit for the interim period.
Mine opponents meanwhile hired veteran mine consulting engineer Jim Kuipers, of Wisdom, MT, to produce an independent analysis of Constantine’s preliminary economic assessment of the Palmer project, an analysis they say casts doubt on the economic viability of the project.
That report, released on June 1, casts doubt on the economic viability of the mine.
“Constantine’s assessment is based on unsupported assumptions, a highly speculative plan to sell barite and overly optimistic estimates of metals prices and operating costs,” said Chris Zimmer of Rivers Without Borders, one of several entities opposed to the mine. “Constantine’s stock price has been on a steady decline since the assessment was released in July 2019, so there must not be much investor confidence in the company. This project is risky for investors and risky for Haines to pin its hopes on as a revenue source.”
According to Kuipers’ research, Constantine’s preliminary economic assessment is based on unproven mineral resources that are speculative and do not have demonstrated economic viability. Constantine’s cost estimates assume no acid mine drainage that would require treatment, but “there is reason to believe this assumption will not be correct,” Kuipers said.
The Palmer project dates back to 1969, when Haines prospector Merrill Palmer began staking claims. The prospect was explored with limited success by several mining firms, including Anaconda Copper, Cominco and Kennecott. Then in 2007, Constantine drilled high-grade copper and zinc mineralization in areas now known as the RW and South Wall Zones.
In 2013, Constantine signed an agreement with Dowa Metals & Mining Co. Ltd. of Japan, giving Dowa a minority 49 percent interest in the project by funding $22 million in exploration over four years. In 2017, Constantine and Dowa formalized a joint-venture business partnership on the project.