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Brooks Range mining project raises concerns in Venetie

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Posted: Sunday, March 10, 2013 12:13 am | Updated: 12:42 pm, Mon Mar 11, 2013.

Editor's note: The reference below to a court dispute between Goldrich and Gold Dust Mines Inc. has been revised to indicate that a rehearing petition has been filed with the Alaska Supreme Court and to note that Gold Dust's owners still live in Fairbanks. 


VENETIE — A joint venture of two Washington- and Alaska-based mining companies plans to open a large new placer gold mine on the south slopes of the central Brooks Range this summer, but the work is drawing opposition from residents of Venetie, the closest village in the Yukon Flats.

Goldrich Mining Co., based in Spokane, Wash., has formed a 50-50 joint venture with NyacUA LLC,  owned by an Anchorage physician’s family, to develop mining claims near Chandalar Lake.

In Venetie, 65 miles southeast of the mine site, villagers worry that the mine will disturb wildlife and contaminate water in the Chandalar River, which they depend upon for drinking water and salmon. They also worry that a major road might be built to reach the mining claims.

Robert Frank Sr., a retired tribal leader in Venetie, paced his house during an interview in December, then cupped his hands as if holding something.

“One day the world will have a pile of gold in its hands, but nothing else, no food or water, and they’re going to destroy the land and mess up the environment,” he said.

Bill Schara, Goldrich’s CEO, said the company is well aware of the need to operate a clean, environmentally responsible mine.

“Those are valid concerns,” he said in a telephone interview from Spokane. “We can’t do things the way they were done in the old days. They have to be done correctly.”

Goldrich has been exploring and mining at Chandalar for almost a decade. In 2012, it formed a joint venture with NyacUA to expand the operation and begin production. It built a camp and this summer plans to begin placer mining — screening and sluicing valley-bottom gravel to capture gold — from June through September. The production goal for this year is 8,500 ounces of fine gold and approximately 10,000 ounces per season thereafter, according to the company’s website.

NyacUA will invest about $8.5 million in the Chandalar work, according to Goldrich news releases.

NyacUA is owned by the family of Dr. J. Michael James, an Anchorage physician and fourth-generation Alaskan whose family has roots in mining in the state going back to the early 1900s, according to the Goldrich news release. The family also owns Nyac Gold LLC, one of the largest producers of placer gold in Alaska, Goldrich said.

Goldrich is a publicly traded company run by a management team based in Spokane, Wash., and led by a board whose directors include several mining company executives and geologists with Alaska connections. Until 2008, the company’s predecessors in Alaska were known as Little Squaw Mining Co. and Little Squaw Gold Mining Co.

Goldrich’s plans

Goldrich has claimed 48,000 acres in two blocks in the southcentral Brooks Range. One block lies just east of Chandalar Lake, about 50 miles east of Wiseman on the Dalton Highway. The second block lies another 30 miles southeast of Chandalar Lake, on the northeast slopes of Thazzik Mountain.

In the summer of 2011, Goldrich drilled new exploratory pits east of Chandalar Lake to look for gold deposits. It also staked the Thazzik Mountain property that summer.

Goldrich has faced a few setbacks and delays in recent years as it has worked to develop the Chandalar claims.

Goldrich mined on Little Squaw Creek in 2009 and 2010, disturbing about 46 acres. The company had permits that allowed 10 acres of disturbance. “Consequently, we have self-determined that we are currently not in compliance with our issued permits,” the corporation said in its 2011 10-K filing with the federal Securities and Exchange Commission.

The company suspended work at Little Squaw Creek that year “to focus our efforts on hard rock exploration at Chandalar,” according to the SEC filing. The SEC report was highlighted by the Ground Truth Trekking blog, created by Bretwood Hegman and Erin McKittrick, Seldovia residents who organize tours and write to highlight natural resource issues in Alaska.

Goldrich also fought a five-year court battle with Gold Dust Mines Inc., owned by Fairbanks residents Del and Gail Ackels, about the ownership of 20 claims in the Chandalar area. The Alaska Supreme Court ruled in Goldrich’s favor on Sept. 28 and ordered Gold Dust to move off the claims, although the Ackels assert that the dispute is still active. A petition for rehearing is pending before the court.

Mining history

The Chandalar Mining District, located about 190 miles north of Fairbanks, has been explored and mined since the early 1900s, according to a history provided by Goldrich on its website. Gold production has come from lode and placer deposits. During most of the 20th century, leases and companies changed hands a number of times, the company said.

In interviews conducted in the village last year, Venetie elders told century-old stories of gold mining in the Chandalar Lake area.

Robert Frank Sr. said his grandmother told him Venetie Gwich’in people would see drifters and prospectors showing up out of the wilderness, looking for the mines, early in the 20th century.

“Back then people had no jobs (or welfare). When you had no jobs, you had no food, so these people would walk into the woods looking for the (Chandalar) mines to work. Venetie people would see them walking up the river with no fishhook or guns, just the intention of finding the mines,” Frank said. “They didn’t know where the mine was, they travelled along the Chandalar — lost. My grandma said Venetie people helped lots of them, and none of them came back.”

Venetie’s Rev. Margo Simple remembered the late Myra Roberts telling her similar stories.

“Shitzuu (grandma) Myra told me they were unprepared and they (Venetie Gwich’in) even made bags for them and some of them even learned Gwich’in,” Simple said.

The miners established a camp at Caro, a few miles downriver from the confluence of the North and Middle forks of the Chandalar River.

“The steamboat use to go to Caro with the cable, but not no more, because the river is too shallow,” Simple said.

Gwich’in opposition

The Chandalar mine expansion has caught the attention of Yukon Flats villages just as they are organizing to protect and promote a traditional way of life.

Goldrich’s Chandalar and Thazzik claims are on state lands. The Yukon Flats tribes don’t have any recognized governmental jurisdiction there, but they are speaking out anyway.

In 2011, the tribal chiefs and board of directors of the Council of Athabascan Tribal Governments in the Yukon Flats region formed the Gwinzii Gwarandaii (Living Good) campaign. The village councils and CATG held two events to kick-start the campaign, according to the council’s fall 2011 newsletter.

In early April 2011, the Venetie Environmental and Natural Resource Conference was held to focus on mining in the Chandalar watershed.

At the same conference, the Venetie tribal government formed the Tee Driin Jik Coalition to address the Chandalar mine as an environmental threat to Venetie and surrounding lands. The coalition plans to hold more meetings.

Venetie’s concerns

Venetie Tribal Administrator Eddie Frank said the Chandalar River has supported a productive fishery for as long as the Gwich’in have lived in the area. Officials with the U.S. Fish and Wildlife Service have said the Chandalar River has the largest fall chum run on the Yukon River, producing nearly a third of the documented stock.

People in Venetie also can drink right from the river, Frank said.

“We want to keep it that way,” he said.  

The CATG warned in its newsletter that the state wants to build a road from Coldfoot on the Dalton Highway to the mine. That could open the Chandalar Lake area to district-wide industrialization, the council said.

“If they put that road in, it’s going to be the end of the world as we know it,” said Venetie resident Tim Thurma.

Maggie Roberts, a Venetie elder, walked on the land when she was young with her father, visiting ancient camps.

“We need that land up that way. We can’t depend on store,” she said in the Gwich’in language.

“I wish the game wardens help us stop it,” Roberts said of the mine. “I went to a meeting at Pike’s Landing (the U.S. Fish and Wildlife Service’s Regional Advisory Council hearing) and said all of this!”

Before the arrival of the western world, Roberts said, the Gwich’in made their living using bows and arrows, caribou fences and sinew snares. The Gwich’in in Venetie always made sure to live far away from animal habitats, she said. After hunts, they didn’t even leave furs on the ground, she said.

Roberts recalled that John Fredson, founder of the former Venetie reservation, foretold today’s changes. Fredson said Venetie would be invaded and “outsiders will bother you lots in the future,” she said while sitting at her kitchen table, hoping those words would not come true and that her community would prosper.

Determined developer

Prosperity in today’s world, though, requires mining, said Schara, Goldrich’s CEO.

“After I went into mining, I realized everything I used in modern life from when I woke up to when I went to sleep — my toothbrush, the porcelain in my toilet, stuff in my pants and in my glasses — all come from mining,” he said.

Even green energy sources such as solar or wind power are 100 percent dependent on mining. Buildings can’t be lighted or electrified without copper and other materials, he said.

“These all come from mining,” he said.

Schara said Goldrich was glad to have won its case before the Alaska Supreme Court in 2012. “It showed me that you have to be diligent in defending your land rights,” he said.

Now, he said, the company is determined to develop that land in an environmentally safe way this summer.

Meanwhile, Venetie and the Gwinzii Gwarandaii alliance are planning more meetings to oppose the mine.

Matthew Gilbert, a freelance writer who grew up in Arctic Village, earned a master’s degree in rural development from the University of Alaska Fairbanks in 2010.

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