Stevens Exploration Management Corp.

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Caribou Dome
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Valdez Creek
SEMC Project Summaries
Valdez Creek
Most of my career focus has been on the discovery of large hard rock deposits and I have found a number of new significant deposits.  My work at Valdez Creek was my first excursion into the placer side of economic geology.  The following article was published in the Alaska Miner Volume 31, Number 10, and recounts my discovery at Valdez Creek of what became the largest placer gold operation in North America for a period of about ten years.
The Discovery of Channel A
By Donald L. Stevens Ph. D., CPG
In 1979, a miner from Idaho, Dale Creech, made proposals to open pit mine the old Tammany Channel to Ames Oil and Gas Corporation, and Fish Engineering and Construction, Inc. of Houston, Texas and Babcock and Brown, Inc. of San Fransciso, CA. These companies formed Denali Mining Ltd. and Options for mining claims with Doug Clark and Rocky Miller, Shorty Kercher, and others who held ground on lower Valdez Creek were signed.

In the spring of 1980, I was contracted by Denali Mining Company, the mining arm of Denali Mining Ltd, to conduct geologic field work on lower Valdez Creek and to advise them regarding geologic aspects of their proposed mining plan. In order to better plan the lateral limits of the required stripping over the Tammany Channel, Doug Colp, their mining consultant, and I convinced management (Curt B. Ames, James Babcock, and James J. Gill) that a refraction seismic survey would help define the bedrock edges of the Tammany Channel canyon. The first seismic lines were shot in the fall of 1980 by Harry Lee and son, Mark, of H4M Corporation (data was crunched using an Apple II computer). In the spring of 1981, Sam Skidmore was contracted to do reverse circulation drilling over the Tammany Channel but he only had enough pipe to drill holes to a depth of 46 feet. He completed ten holes to that depth.

Meanwhile my geologic field work had led me to the idea that there might be another incised channel to the north of the Tammany Channel. I had noted several drainages in the region where it appeared that the uplift of the Alaska Range to the north had moved streams to the south side of east-west drainages and thought that may be why present day Valdez Creek was south of the Tammany Channel. With that mechanism it seemed possible that there might be an undiscovered buried channel north of the Tammany Channel that was older than the Tammany.

In 1981, when management decided that more seismic work was needed to help plan the stripping, I was able to convince them that the seismic lines should be extended to the north to test my hypothesis. The first of the extended seismic profiles showed a spectacular canyon completely buried under glacial outwash gravels. See Figure 1 below. H4M Corp. designated this canyon Channel A in their 1981 report. Meanwhile, a Thibideau churn drill had been brought in from Fairbanks to test the deeper gravels in the bottom of the Tammany Channel (two holes) while Skidmore went back to Fairbanks to machine more drill pipe for his drill rig so he could drill to depths exceeding 100 feet.

I recovered some of the seismic line markers and paced off the distance to a position over the new canyon. My pacing put me right on top of the spoil pile from the stripping work being done over the Tammany Channel. Nevertheless, I had the churn drill set up on the spoil pile for the hole. The discovery hole, DH 13C, was centered over the canyon shown on the geophysical profile. At a depth of 86 to 88 feet, on September 6, 1981, the two foot section of hole with a 9.75 inch diameter casing shoe yielded 1029 mgs of gold just above bedrock. This confirmed that Channel A contained high grade pay just like the Tammany Channel, but Channel A had never been mined. Channel A became the focus of all future drilling for Denali Mining Company and by the end of 1982, 69 drill holes had been completed. Denali Mining Company began shopping the property around realizing that it did not have the mining expertise to handle mining on the scale required by Channel A. A Canadian company, Camindex, became the operator of the mining operation, and WGM, Inc. took over the drilling program. The rest is history as Valdez Creek became the largest placer gold operation in North America for about 10 years and in the best year produced over 100,000 ounces of raw gold.  Channel A was a large natural sluice box with sections where the paystreak ran 10 ounces per cubic yard with thicknesses of up to 15 feet. Cambior was the operator for most of this time. Over 1600 man-years of employment resulted from this discovery along with a substantial financial benefit to south-central Alaska.

In retrospect, there were several fortuitous factors that led to the discovery. The first was my idea that there might be another buried channel to the north of the Tammany Channel. Further upstream, Channel A meandered south of both the Tammany Channel and Valdez Creek.

Second, the seismic line which first profiled Channel A happened to be positioned where there was little frozen ground. Both downstream and upstream from Line A, parallel seismic profiles were masked by frozen ground which precluded profiling the depth to bedrock. Line A just happened to be in the right location to “see” through the glacial outwash gravels and profile the bedrock.

A number of earlier churn drilling programs over the Tammany Channel had failed because the churn drills invariably encountered large boulders in the glacial till section which stopped the holes before the pay streak was reached. DH 13 C just happened to miss any boulders and made it all the way down to, and four feet into bedrock.

The lessons to be learned from this discovery are many. First, big discoveries are made for the wrong reasons sometimes, but they are always made by people who are out in the field doing exploration work. Second, management decisions have a big impact on the success or failure of exploration projects. Management needs to give the field geologist freedom and budgeting to test his hypotheses.

Are there still large placer gold deposits to be found in Alaska? Absolutely! Are there any exploration programs searching for these large placers? No! However, if the price of gold goes up to, say, above $400 per ounce for a substantial period of time, the incentive for new exploration will exist.


The new discovery, Channel A, is the buried canyon on the left.  Historic production from the Tammany Channel by underground methods was from the depression in the bedrock on the right.  At the time of this seismic survey, total production from Valdez Creek was about 20,000 ounces.


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