DNR denies IPOP permit to mine in Bonanza Channel
On March 11, the Alaska Department of Natural Resources rejected Nevada-based IPOP LLC’s application for permits to mine for gold in the Bonanza Channel.
The DNR’s decision document cited insufficient exploration data with limited exploration efforts, failure to follow the sequence that’s customary for mineral exploration and obstruction of through traffic in the Bonanza Channel as reasons for the denial.
“Having reviewed all materials, the Division is satisfied that the conclusions of the decision are based on fact, regulation and law,” the document states.
The application was initially submitted in November 2023 but remained incomplete until January 13, 2025.
IPOP proposed to use a special cutterhead suction to dredge for gold on 32 state mining claims within Bonanza Channel, located 28 miles east of Nome.
Bonanza Channel is a state navigable waterway and constriction of the channel would infringe “upon the public’s navigation rights,” the DNR stated.
Also, the state found that the project lies within a land unit designated for wildlife habitat and harvest. As part of the Northwest Area Plan for State Lands Management, the land is classified wildlife habitat primarily valuable for fish and wildlife production and “a unique or rare assemblage of a single or multiple species of regional, state or national significance.”
In addition, the state reviewed the U.S. Army Corps’ environmental assessment and noted that the initial federal determination to deny IPOP the federal permit concluded that “detrimental effects are expected to more than minimal and temporary.”
Also, the DNR found that IPOP failed to provide data that would show the existence of a commercially viable placer gold deposit. IPOP estimated the gold grade at 49 gram per square meter, which DNR found exceptionally high, requiring substantial verification through a more comprehensive and rigorous exploration program.
Testing the legal standing of IPOP’s claim that the gold is there and would be a reasonable use of the area, DNR said that IPOP failed to follow a reasonable and customary mineral exploration, development, mining and reclamation sequence, thus there is no “rational basis to conclude that the proposed surface uses are necessary for mineral development.” Consequently, the state asserts, “approving such uses without sufficient exploration data and a comprehensive project sequence, would violate the principles set forth in the Alaska Constitution and state statutes, which aim to balance mineral development with the protection of surface resources and ensure responsible land management.”
Furthermore, the DNR noted inadequate reclamation cost estimates. The decision document says while the cost estimate at nearly $944,000 appears comprehensive, “it falls short of accurately representing the true financial burden of the reclamation process on the state of Alaska should IPOP default and fail to follow through with required […] permit obligations.”
“The proposed operation if approved will cause unnecessary and undue degradation of land and water resources,” the DNR concludes.
The DNR notes that the IPOP application deficiencies are so fundamental, a full denial was necessary. IPOP, or anyone affected by the DNR decision, can appeal the decision to the DNR commissioner, within 20 days, before seeking legal relief in superior court.
IPOP LLC first appeared in Nome in 2018 with plans to mine Bonanza Channel in the summer season, catching Nomeites by surprise. The company had not mined in Alaska before and as IPOP mining equipment was being offloaded of the first barge that summer, permit applications had only been submitted in March of that year. Proposing a mining operation with a 36 inch cutter head dredge in the midst of a major subsistence haven and ecologically valuable estuary sent shockwaves through the community. Unified opposition manifested in letters and resolutions passed by several entities in Nome. Norton Sound Economic Development Corporation, Bering Straits Native Corporation, Sitnasuak Native Corporation, Kawerak Inc., Solomon Native Corporation, the Village of Solomon and the City of Nome lodged their opposition to IPOP. In 2024 the City of Nome joined the publicly voiced opposition when the Nome Common Council unanimously passed a resolution to oppose that state permits be given to IPOP for exploration or mining at Bonanza Channel. All 51 comments received during the DNR’s public comment period last summer were in opposition to the proposed mining operation, according to the decision document.
The project went through the permitting process, trying to secure both federal and state permits, but was initially denied a crucial permit from the U.S. Army Corps of Engineers, Alaska District. Elderly investors and IPOP sued the Army Corps. IPOP appealed the denial, accusing Native corporations without any evidence of wanting to mine Bonanza Channel for themselves. In a surprise decision, in August of 2023, the U.S. Army Corps of Engineers Pacific Division in Hawai’i overturned the Alaska District’s denial and approved the permit. At that point, mining could not go forward as state permits were still pending. With this week’s decision, IPOP will not be able to mine this summer. DNR notes that additional exploration is needed and encourages IPOP to submit another application “to pursue the information needed to cure the defects in their proposal denied” in this week’s decision.
