Glacier Valley Mining & Metals
Fine gold recovery with Arctic MinerTM Technology!
IHOME
FAQS
MINING IN ALASKA and TAX SHELTER FAQS:
Is there a current mine operation or mining property for this Tax Shelter.
No. The purpose of the Tax Shelter program is to provide the funding for the leasing of legal alluvial mining claims for a proposed mining operation in Alaska.
A certain number of investment units have to be sold in order to adequately fund a viable alluvial mining operation.
Certain properties are in the negotiations process and will be disclosed upon investment.
The current price of Au requires discretion when providing information regarding a potential property.
How many investment units in the Tax Shelter will need to be sold to achieve adequate funding?
A minimum of 100 units will need to be sold to provide for the down payment on a viable leasehold, heavy equipment and the mining plant for the proposed mining operation.
How will the mining property for this tax shelter be selected?
A viable and legally maintained potential mining property will be selected based upon historical data, production data, geologist reports, drill logs, geophysical surveys, accessibility, permafrost issues, and regulatory issues.
An opinion by a registered mining engineer or a professional geologist specializing in alluvial deposits will be sought as part of the decision process.
What can the Tax Shelter investment monies be used for?
The $35,700 and the monthly interest payments can be used for the leasing of the mining property, equipment acquisition, and costs associated with the mine development. The mining property cannot be purchased with the investment monies themselves.
Why is the Promissory Note for 10 years at 10% interest?
This is the recommended time period and the recommended interest rate suggested by the IRS under IRS guidelines regarding this Tax Shelter.
Why is the Promissory Note a "full recourse" note?
Again, this is per IRS regulations governing the Tax Shelter.
Are the interest payments on the Promissory Note tax deductible?
The interest payments on the Promissory Note are fully tax deductible over an above the initial $105,000 write off afforded by the initial investment of $35,700 and the note on the remaining $69,300 principle.
Which government agencies regulate the mine operation?
The State of Alaska has oversight for the mine operation through the Division of Mining, Dept. of Natural Resources (DOM, DNR), and for environmental compliance through the Dept. of Environmental Conservation (DEC). Federal oversight is through the Corps of Engineers regarding any wetlands issues, EPA for water quality and other environmental compliance.
How long is the mining season in Alaska?
For the proposed operation in the Candle area, approximately 90-120 days, maximum: June-September. Permafrost also plays a factor in that the next season’s production area has to be prepared before the end of the current season.
Other areas in Alaska can have longer seasons.
How is the operation re-supplied?
By air. In most of Alaska, re-supply is accomplished overland seasonally, by airplane or by river barge or seasonal sea lift by barge, if the location is coastal Alaska. Overland resupply can have seasonal constraints depending upon the location.
The proposed Candle operation can be supplied by air as there is a 4,500 ft runway at Candle that is Lockheed L1020 capable (C130) (year round), and by river--only during the summer months.
The mine site determines the method of logistics.
How large is the available mining area?
An alluvial mining claim is 40 acres per claim. The only properties to be considered will have sufficient claims to justify the number of cubic yards comprising this tax shelter program.
The prospective Candle property presently under consideration encompasses 12 square miles of patented mining claims, including part of the historic town of Candle.
What are patented mining claims?
Patented mining claims are rare and were created under the Mining Act of 1872. The mining claims at Candle are patented under federal patents. This means that the mine owner owns the surface and the subsurface mineral rights.
What is the fineness of recovered gold in Alaska?
The fineness or purity of native gold is 76 to .92. The proposed Candle property under consideration historically produces .76-.78 fine gold.
What pays for the cost of mining?
The mine will be operated under contract by Terra Resources, Ltd. which company will provide their Arctic Miner(TM) alluvial mining technology to insure adequate Au recovery.
The cost of operation is paid for through a cost per ton fee of $28 per ton to recover any gold. This is the basis of the $105,000 per mining unit cost to the investor.
The investor's risk is that there is enough gold to pay any balance remaining on the $105,000 initial mining unit price.
How would the gold recovery be handled so that the investor will get his/her share from the mining unit purchased?
To recover the gold, the overburden is stripped to bedrock using dozers, with the material at or next to bedrock being excavated and run through the wash plant. The gold is then separated from the alluvium into a concentrate by gravity. The gold bearing concentrate is removed daily and taken back to a recovery room where the gold is then further separated from the magnetite, garnets and other heavy minerals that may be in the concentrate. The gold is then melted into dore bars and provided to the investor with a stamp demonstrating the mining unit. All gold recovered will be accounted for, with that accounting available to the investor for review.
Mine owner's Royalty
By IRS rules, the mining property must be leased to GVM&M. No part of the tax shelter can be used to purchase the claims. It is a common practice to pay the mine owner a percentage share or royalty for mining rights.
The mining property claimholder/owner is afforded a royalty percentage share of the gross amount of recovered gold as payment for the lease on the mine property, usually 10% of the gross amount of gold (Au) recovered. The investor’s share is the remainder of the gold recovered from the investor's mining unit after the leaseholder’s royalty has been removed.
Metals Recovered
GOLD (Au) is the target metal to be recovered under this program. This is the metal to be "paid" in kind to the claim owner and to the investor recovered from the investor's mining unit. To recover any other metals would be more expensive, and may require additional regulatory restrictions upon the operation.
Will the investor be able to visit the mining operation?
Yes, the investor only, as long as there is advance notice so that quarters can be provided at the mine. The investor will be expected to spend one, or two, days at the site depending on weather conditions. The investor will have access to all aspects of the mine operation. Be advised, THIS IS NOT A TOURIST CAMP. ALL VISITORS WILL BE ESCORTED AT ALL TIMES DUE TO WILDLIFE AND OTHER HAZARDS. A RELEASE FROM LIABILITY WILL ALSO BE REQUIRED. FURTHER, VISITS WILL BE LIMITED, DUE TO QUARTERS, FOOD AND OTHER ISSUES INVOLVING THE OPERATION OF A REMOTE AIR SUPPORTED MINING OPERATION IN BUSH ALASKA.
How can the investor get to the mine site?
Fly to Kotzebue, Alaska via Alaska Airlines, then to Candle through Haglund or another air taxi service. GVM will coordinate the arrangements for the investor from Anchorage, Alaska north.
If the investor intends to visit the mine, what is needed in the way of clothing?
Bring a heavy parka, rain gear, rubber boots, hiking boots, gloves, and a good hat. Lots of mosquito repellent is a good idea, also. You will literally be in the wilderness, so do not have high expectations regarding services.
What is there to do besides viewing the mine?
A fishing license is a good idea, along with a good fishing pole as salmon run in the river through Candle proper during the summer. There are Arctic Char and other game fish besides salmon. Berries are plentiful in the fall. A good camera and/or video camera for local wildlife is also recommended.
©Copyright 2008 George J. Deden, All Rights Reserved