Mine Stock Tumbles 22.3% On Black Friday

Contango Ore Stock Drops When Expenses At Manh Choh Mine Near Tetlin Skyrocket    

The Johnson River Bridge is one of three World War II era bridges that the ore trucks have to cross between Tok and Delta. 

Friday, November 29th, 2024
Contango Ore, which holds 30% of the stock of the Manh Choh Mine in Tetlin near Tok had its very own old-style Black Friday. Contango's stock value dropped by over 20%.

Manh Choh mine's success depends on an operational model that is both audacious and precarious.

The mine's profitability is heavily dependent on Alaska's rural road systems. Every day, round the clock, only a few minutes apart, sixty super-sized ore-laden trucks head up three Alaskan highways, the Alcan, Richardson and Steese. They travel, fully loaded with rock, 250 miles to Fort Knox Gold Mine where the ore is milled. The plan is for them to do this, day and night, for the next five or six years.

The weakness of the plan is that the expense of the trucking operation must be offset by the value of the rock the trucks are hauling.

It turns out that the rocks contain more moisture than the Canadian company had expected. Additionally the processing costs at the Kinross facility are higher than they projected.

The trucks must pass through Tok, Delta, Dot Lake, Salcha, North Pole, Fairbanks and Fox over a number of bridges, some of them dating back to World War II.

This October, 2024, DOT put a limit on the weight the trucks could carry. The narrow old metal bridges – the Johnson River Bridge, the Gerstle River Bridge and the Robertson River Bridge – are not mentioned. It was a newer 1977-era bridge at the Chena River Flood Control point that is apparently in peril.

On Black Friday, Contango's stocks suddenly crashed and this was big news on global markets.

Contango's CEO blamed the drop of 22.3% in stock value overnight on several things: the rock's high moisture content; the higher processing costs and the state's weight restrictions to safeguard the bridges.

Contango's CEO, Rick Van Nieuwenhuyse, put out a press release, saying he was "disappointed" with the new bridge weight restrictions.

Originally, "Black Friday" wasn't a joyous shopping day between Thanksgiving and Christmas. It was the name used to describe various stock market crashes. The first Black Friday marked a stock market crash on Friday, September 24th, 1869. Many stock market crashes have followed, and they've all gotten similar names, including a "Black Tuesday" in 1929 and a "Black Monday" in 1987

Link to previous story about the truck route. https://www.countryjournal2020.com/2023/08/canadian-gold-mining-company-threatens.html

NOTICE FROM DOT LIMITING WEIGHT OF MANH CHOH ORE TRUCKS 

Oct. 31, 2024

Alaska Department of Transportation & Public Facilities Load Posting of Richardson Highway MP 346

In order to protect state infrastructure, the Alaska Department of Transportation & Public Facilities (DOT&PF) is load posting the Richardson Highway MP 346 bridges (North and South bound) for 80 tons. This equates to 160,000 pounds with an allowance for variations due to snow and ice accumulation.

Load posting signs will be installed at the bridges for northbound and southbound traffic, and the load limitation will be shared with industry and DOT&PF’s Commercial Vehicle Compliance officers. Trucks will be weighed (Tok and Fox) and stopped if found to be over the 80-ton limit.

Permitted overweight loads will continue to use the Chena River Flood Control bypass, as required by the terms of their permit.

Protecting the bridges is of utmost importance to Alaska DOT&PF. These substandard bridges were built by a federal agency in 1977 and do not meet current Alaska seismic standards or hydraulic standards. They cannot be upgraded in place and are an unusual weak link in Alaska’s National Highway System.

DOT&PF is taking steps to replace the bridges, which would eliminate the need to load post, and could allow permitted, overweight loads to remain on the highway without having to bypass the structure. Project plans are at 100% design and the project team is working through final funding and permittng steps.

The Richardson MP 346 bridges are critical Interstate highway bridges. Load posting the bridges will protect them from deterioration that could lead to additional load restrictions, and our long-term plans for replacement will ensure resiliency for future weather and loading conditions to protect the cost of living and transportation efficiency in the Fairbanks area.

Issued by: Leslie Daugherty, Chief Bridge Engineer, Email: leslie.daugherty@alaska.gov