A rock formation is seen at the edge of Safety Sound east of Nome on Sept. 30, 2020. Safety Sound is an imporant subsistence and recreation site for Nome residents. A Nevada-based company’s plan to dredge for gold in Bonanza Channel, which is part of Safety Sound, has drawn fierce opposition in Nome. State officials have denied a land-use permit for the project and rejected the company’s reclamation plan. (Photo by Yereth Rosen/Alaska Beacon)
Alaska regulators have rejected a permit application for a controversial gold-dredging project near Nome after determining that the plan is riddled with deficiencies and would put the public interest at risk.
The Department of Natural Resources’ Division of Mining, Land and Water on Tuesday denied the application from Nevada-based IPOP LLC for a land-use permit and rejected the company’s plan for reclamation. Approvals for IPOP “would be contrary to responsible land management, the public interest and cited legal principals,” the denial decision said.
The company, which initially proposed the project as the setting for a reality TV show, is seeking to dredge for gold in Bonanza Channel, a section of environmentally sensitive Safety Sound, which is an important site for subsistence food gathering.
The project “would significantly impede or prevent public navigation of Bonanza Channel,” especially in its early years, the division’s decision said. And it would interfere with the state’s ability to properly manage the waters, the decision said.
The developer is also making questionable claims about the potential economic rewards of its proposed mining, the division concluded.
IPOP has asserted that the sediment it would dredge holds a whopping 49 grams of gold per cubic meter. That is more than five times as rich as the most gold-rich onshore sediment that is known to exist in the Nome region and about 37 times as rich as the highest known concentration of gold in ocean sediment in the region, the division said in its decision rejecting IPOP’s application.
Claims of the “exceptionally high” 49 grams of gold per cubic meter of sediment are not backed by exploration data, and “the Division cannot rationally determine that the proposed activity will provide economic benefits to the state,” the denial decision said.
Representatives of IPOP did not respond to requests for comment.
Aside from starting out as a proposed reality TV show, a concept that drew quick opposition, the IPOP proposal is unusual in several ways.
The proposal project would be the largest contemporary placer operation in Alaska when measured by volume of material processed, the Division of Mining, Land and Water’s denial letter said.
It would also be a new type of placer project for Alaska, the first proposed such dredge project in an estuary or lagoon system anywhere in the state, the division said.
IPOP’s plans are widely opposed in the Nome region by tribal organizations, fishing organizations, the city of Nome and others.
Among the groups objecting has been the Village of Solomon, a Tribal government.
In an emailed statement, Deilah Johnson, Tribal resources director for the Village of Solomon, said she was pleased that the Department of Natural Resources rejected the project.
The state’s permit denial is in line with “concerns that the Village of Solomon has reiterated time and time again,” with support from agencies like the National Oceanic and Atmospheric Administration and the Environmental Protection Agency, she said.
The Department of Natural Resources action contrasts with that of the U.S. Army Corps of Engineers, which in last year granted a wetlands-fill permit to IPOP, reversing a 2022 permit denial, Johnson noted.
“I feel like I am in shock, based on the disappointments previously, yet pleasantly surprised and impressed with the decision by a small Alaskan department,” Johnson said.
IPOP has the right to appeal the division’s rejection, said Lorraine Henry, a spokesperson for the Department of Natural Resources.
There are other regulatory hurdles that IPOP must clear to get permission to develop its mining project, Henry said.
Along with the Corps permit, the company needs permits from the state environmental conservation and fish and game departments.
The Department of Environmental Conservation in October granted IPOP a permit allowing the company to discharge wastewater into Bonanza Channel from Dec. 1, 2024, to Nov. 30, 2029.
During the interval between the Corps’ 2022 denial of the wetlands-fill permit and its subsequent 2024 approval, two lawsuits were filed by IPOP investors against the agency. The second lawsuit, filed in 2023 in Louisiana, accused Native opponents of trying to pursue competing mining projects and that opponents included Native corporations that “are among the most wealthy and powerful in Alaska.”
The case was dismissed as moot after the Corps issued the permit to IPOP last year. But Kawerak, a Nome-based tribal consortium, has appealed the Corps’ permit approval.
While controversies over the IPOP plan play out, another company continues to use Nome as the setting for a gold-mining reality TV show. Bering Sea Gold, focused on the miners who dredge for gold in Nome’s Norton Sound, has aired for 18 seasons on the Discovery Channel.
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