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Nome Offshore Minerals Lease Sale, September 28, 2011

(Nome, AK) - On September 28 the Alaska Department of Natural Resources (ADNR) held a competitive sale for offshore mineral leases at Nome.  Eighty-four lease tracts covering 23,793 acres were offered for sale, and all tracts were sold.  High bids for all lease tracts totaled $9.3 million.  The sale was a combination of sealed bidding and outcry auction.  Fifty-three smaller, near-shore tracts were offered for outcry bidding, and 31 larger tracts in deeper water were auctioned by sealed bid.  There were 70 registered bidders participating in the outcry portion of the sale, and 111 sealed bids were submitted.  The outcry portion of the auction was conducted first, followed by opening of the sealed bids.

Bids were submitted by a range of individuals and companies, from small scale miners to larger, international corporations.  Winning bids for the outcry lease tracts ranged from $10,000 to $90,000.  The total sale amount for the outcry auction was $1.6 million.  The total from the sealed bid tracts was $7.7 million.  The highest bid single lease tract sold for $1.6 million.

Interest in offshore mining for gold at Nome has increased dramatically in recent years, largely driven by the price of gold.  Gold is mined by suction dredging, which occurs during the summer months.  Although there is a recreational mining area that allows dredging off shore of Nome, lease tracts have not been offered for this offshore area since 1999. Unlike uplands, miners cannot stake mining claims offshore. State law requires that offshore mineral rights be provided either through the issuance of prospecting permits which may be converted to leases, or through competitive lease sales. Approximately 50 small suction dredges have been active in Nome this summer prospecting the proposed lease area.

The increased mining activity each summer brings trade to local businesses in the City of Nome.    The Department will work actively with the City to regulate the increased mining activity.

 

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