Partners needed to develop a third of Alasaka’s minerals

Representatives from a corporation that proudly bills itself as the largest private landholder in the United States recently stopped in to see senior mineral exploration staff at some of Canada’s top mining companies.

With a land position approximately equal to the size of France, they were laying the groundwork for a major mineral exploration program.

Depite its huge land holding, this company is not one with a head office in New York or Chicago. In fact, Doyon Ltd. has its head office in Fairbanks, Alaska: its shareholders are the native people of the state.

Doyon was set up by the native groups of Alaska in the 1970s to settle long-standing land claim disputes. As a result of a 1971 act of Congress, it holds the mineral rights to more than 12.5 million acres of land in Alaska’s interior — extending over more than a third of the state — much of it selected for its known mineral potential.

But while Doyon has the land and took the time to catalogue indications of its mineral potential, the company realizes it lacks the expertise to develop the mineral wealth. So, as part of a long-term plan to develop the mineral potential of the land, it set out during the past summer in search of that expertise — and capital.

Stops in Toronto and Vancouver were just two in a trip that took the company’s senior vice-president of lands and resources and senior geologist across the “lower 48” states of the continental U.S. and Europe to tell mining companies what Doyon has to offer.

A top official from one of Canada’s senior mining companies called their presentation “very professional, beautifully done. They have a very good idea of their rights and what they’re offering to anyone interested in joining them.”

He said his impression was that they weren’t interested in farming out the property to junior mining companies more concerned with promoting their ability to raise money. Doyon wants to see the properties developed in an orderly manner.

While Doyon wants to have the opportunity to participate as a working interest partner, it recognizes the risk involved by any company that provided the early capital for exploration and development and says it would recognize that in any agreement.

Most of the efforts of the 21 staff members at Doyon are directed at land management. The company does, however, run some other money-making ventures including an oil drilling service company, a bank holding company and a civil engineering services company with worldwide operations.

Annual operating revenue grew from $3 million in 1980 to $15 million in 1985 with revenue of $27 million projected for 1986. Total assets, not including land value, are more than $50 million.

Some of the 11 other native corporations that received land as a result of the 1971 legislation gained property of more immediate economic benefit — one took over the rights to a producing gas field with the result that royalty checques previously made payable to the government were made payable to the native corporation.

Doyon, however, gained the largest land position. The company was able to pick and choose which blocks of land it wanted to keep to make up its acreage, the rest being retained by the federal government.

About 10 years ago, in order to determine which land it wanted to keep, it gave a consortium of mineral exploration companies the right to do preliminary exploration on the ground in return for the first right of refusal in any further development. Exploration for all minerals on Doyon land since 1975 is close to $100 million(US).

Doyon’s own staff has augmented that work. The result is a comprehensive but very preliminary data base for exploration.

Most of that work has been directed to base metals and oil and gas. A lot of Doyon’s land, however, is known for alluvial gold occurrences including one area with over 1.5 million oz of gold production and several areas with production in the 100,000-500,000 oz range.

However, none of the land has been the subject of a systematic gold exploration program, even though the potential is there.

Gold production in interior Alaska has exceeded 13 million oz with almost half of it coming from districts in which Doyon has a significant land position.

“A very diverse geologic environment is encompassed by these areas, including intermediate to felsic intrusives, volcanic centres, skarns, Precambrian greenstone belts, quartz veins in schists, alkalic complexes and ultramafic complexes,” says one of the company’s reports.

There is potential for much more than gold on Doyon’s land, however.

“The most clearly identified prospects include volcanogenic massive sulphide, carbonate-shale hosted lead and zinc, vein and disseminated gold and silver, porphyry copper, stockwork molybdenum, placer gold and tin, lode, tin, tungsten skarns, vein deposits of mercury and antimony, sedimentary and hydrothermal uranium and coal.”

The process of seeking partners to develop the mineral potential of the land is not designed to take the first good offer that comes along says James Mery, attorney and senior vice-president for Doyon. He emphasizes that the corporation considers itself the steward of the land as well as the vehicle to develop it for the benefit of Doyon shareholders.

The stops in Canada came at the end of a 2-month period of presenting the company’s case to numerous mining firms in North America and Europe. Doyon hopes be able to announce an agreement for some of the property by the beginning of 1987.