" Ghost" Gold Mill Coming Back To Life
By Alex Michelini
FAIRBANKS, Alaska -- They've dusted off the crushing equipment, swept out the engineering and administrative offices and brushed a fresh coat of brown paint on the interior tanks, and yellow and green paint on the railings.
The spiffing-up at the shuttered Grant Gold Mill on the gentle slopes of Ester Dome in central Alaska, 10 miles northwest of here, is part of the effort to convert the mill into a demonstration plant producing liquid fuel from low-grade Alaska coal that could provide a significant answer to the world's oil crisis.
" We're all cleaned up and ready to convert. We have everybody on standby," said Garry Anselmo, CEO of Silverado Gold Mines Ltd., whose subsidiary, Silverado Green Fuel Inc., (" green" as in environmentally-friendly) is inching closer to obtaining the government and private funding to get the project rolling.
The “green fuel” process involves crushing the subbituminous coal, found in enormous quantities in Alaska's Beluga coalfields, into very fine particles that are then pressure-heated to release some of the water. The resulting combustible mixture of particles suspended in water is earmarked for use in industrial boilers and big diesel engines.
And maybe some day in jetliners and automobiles.
" It's very safe, very clean and a low-cost replacement for industrial burning of oil," said Anselmo from his Vancouver-based Silverado offices.
Anselmo said " green fuel" can be made from Alaska coal for $14 an equivalent barrel of oil -- even less, $9 a barrel, from coal in the Wyoming-Montana coal region.
With oil prices surging and calls for alternative fuel reaching a clamor, the conversion of Grant Gold Mill into a demonstration plant has taken on new urgency.
" All these developments have given new life to our project," said Anselmo. " Raw oil burning is expensive and too dirty."
Over the next couple of months, Silverado executives will meet with key members of the Alaska congressional delegation, the Department of Energy, the Department of Defense and the Department of Homeland Security to discuss funding for the project and the potential of the liquid fuel for use in the war on terror -- specifically, in Iraq.
Alaska Gov. Frank H. Murkowski has praised Silverado's " green fuel" potential.
As a U.S. senator two years ago, Murkowski, then-chairman of the Senate Energy and Natural Resources Committee, wrote: " [Silverado's low-rank coal-water fuel] could satisfy a considerable portion of the United States energy requirements in an inexpensive, environmentally friendly, and timely manner ... [and] could constitute an important new source of alternative energy for the United States and the world."
Anselmo estimates Silverado needs $10 million to convert Grant Gold Mill and $10 million to run it for three years.
The " green fuel" project is running on parallel tracks with Silverado's ongoing gold mining operations.
In 1994, Silverado recovered the 10th largest gold nugget in Alaska history, weighing 41.35 Troy Ounces.
The demonstration plant is necessary to produce the liquid fuel in large enough quantities to show potential users that it is a viable alternative.
If successful, Anselmo said Silverado would build a commercial plant in the Beluga region, where coal deposits are estimated at 2 billion tons. There is another billion or more tons near Healy, deeper in the interior of the state.
Silverado is also exploring the coal found in the Powder River Basin in southern Montana and Wyoming to produce the alternative fuel, and has begun talks with congressional officials from those states.
Silverado's Grant Gold Mill, which recovered 15,305 ounces of gold and 8,231 ounces of silver in the 1980s, is considered an ideal location for the demonstration plant because a lot of the equipment in the half-dozen buildings can be used in the production of " green fuel."
As a result, the plant could be converted quickly and cost-effectively, according to Silverado.
The facility would also serve as a training center.
The meetings to be held with defense and homeland security officials grow out of the safety elements of the liquid coal fuel and its potential use in the war in Iraq.
" If a rocket or grenade is tossed into a fuel supply, there's a huge explosion and mass of flame," said Anselmo. " But our fuel is non-toxic, non-hazardous and only flammable when injected and contained in a boiler, gasifier or heat engine."
And it eliminates the possibility of environmental damage from spills, said Anselmo, because in the event of a tanker breakup, the mixture of coal particles and water would simply sink to the ocean floor and form a substrate conducive to plant growth.
In addition to markets in the continental United States, Silverado has been talking with Congressional and power utility officials in Hawaii, the Chinese Coal Ministry in Beijing, the State of Guijaret in India, and is exploring opportunities in Indonesia, Malaysia and Thailand.
Warrack Willson, Silverado Green Fuel's vice president for fuel technology, led the development of the liquid fuel process.
Willson visited Asian countries currently using heavy fuel oil in their power plants, including coal mine and utility operators in China’s Heilongjiang Province, and reported progress toward forming a joint venture with Silverado to develop " green fuel" production plants.
" He spends his life on this," Anselmo said of Willson.
Anselmo, 60, has spent his working life in mining and finance. Before founding Silverado, he worked in field explorations with Kennecott Copper, Anaconda American Brass and American Metal Climax and then formed a consulting company and explored and built mines under contract for various mining clients."
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