This river city deep in Alaska’s Interior knows a thing or two about gold rushes.
The first one founded Fairbanks in the early 1900s, as thousands of prospectors and others streamed in from the Klondike, Nome and other gold fields looking to get rich quick.
The second came 70 years later, after oil - black gold - was found on the North Slope. The city was strained by the thousands of job seekers who came to seek high-paying work on the trans-Alaska pipeline.
Now, with a major gold mine under construction and other large gold deposits discovered nearby, Rush No. 3 looks to be just around the corner. But this time, city leaders say, it’s going to be different.
“This is a very, very long-term project,” said Ron Picketts, who heads the Fairbanks Industrial Development Corp. “The impact on the community is going to be gradual. That’s a big advantage to us - that way, we can accommodate it.”
City officials are also banking on the new gold fields to help reduce the region’s unemployment rate, which has averaged 8 percent for the past two years and historically is higher than the state and national averages.
“We feel this is a turnaround for us,” said Fairbanks Mayor Jim Hayes. “We’re moving away from boom-and-bust, seasonal-type jobs. Now it’s time to look at stability.”
But they would need to avoid the flood of outsiders reminiscent of earlier opportunities. Working in their favor is the fact that mine developers say they plan to hire mostly Fairbanks-area residents.
“It means jobs, jobs, jobs, and that’s what we need in the Interior,” Hayes said.
And they stand to be big-money jobs. In Elko, Nev., the nation’s largest gold-producing area, the typical miner last year earned upwards of $45,000, almost double that state’s average wage.
The Fairbanks mining district has historically been the state’s most productive, though declining for the past 30 years. In the past century more than 8 million ounces have been extracted, about a quarter of the state’s total output.
Nearly all of that has been placer gold - loose specks, flakes and nuggets. But the new gold discoveries are lode deposits - minute concentrations of gold contained within rock.
The Fort Knox project, 15 miles northeast of Fairbanks, is the most developed project. And even there the first ounce of gold won’t be taken from the ground for another 15 months.
Bulldozers, graders and dump trucks are doing road and site work in a five-mile-long valley that will contain the Fort Knox mine, which will cost owner Amax Gold Inc. an estimated $256 million to open.
Ken Pohle, president of Fairbanks Gold Mining Co., Amax’s local subsidiary, said Fort Knox is expected to produce up to 350,000 ounces of gold a year starting late next year.
Amax says Fort Knox - only a couple of miles from the area’s first discovery in 1902 - holds at least 4.1 million ounces.
At the True North prospect, not far from Fort Knox, owner La Teko Resources Ltd. says it has documented about 450,000 ounces of recoverable gold. The company, however, believes the deposit could contain more than 2 million ounces.
Ester Dome and Eagle Creek, held by Silverado Mines Ltd., aren’t yet well-documented, but early estimates run up to 4 million ounces.
If these deposits live up to their billing, they will total about 11 million ounces worth $4.3 billion at current prices of around $390 an ounce.