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Mining News: Mineral Roundup in northern B.C.
Here’s a look at mining companies active during 2008 in northern British Columbia. Producing mines
Thompson Creek Metals Co. operates the Endako Mine, a molybdenum producer for more than 40 years. Located near Fraser Lake in northern British Columbia, Endako includes three open pits, a mill and a roasting facility, and is operated as a joint venture, with Thompson Creek holding a 75 percent interest and Japan-based Sojitz Corp. having the remaining 25 percent. The miner produced 25 million to 26 million pounds of moly in 2008. Due to a sharp drop in molybdenum prices last year, Thompson Creek decided recently to scale back planned 2009 production at Endako and curtail $300 million in capital spending, including an expansion of the mine.
Hawthorne Gold Corp. completed surface and underground rehabilitation of the historic Table Mountain mine site in 2008. In April, Hawthorne acquired Cusac Gold Mines Ltd. and immediately consolidated the Cassiar Gold Camp near Highway No. 37 by staking and incorporating 56,300 hectares, or 23,361 acres, surrounding the existing mine into its work plan. Table Mountain has a permitted and operating mill and tailings facility, 13 adits-portals and about 25 kilometers, or 16 miles, of underground infrastructure. The junior intends to begin production in late 2009. Hawthorne is completing a digital geological model of all previous mining operations and exploration projects at Table Mountain and the nearby Taurus Project. The Taurus deposit hosts an NI 43-101-compliant inferred gold resource estimate of 1.04 million ounces consisting of 32.4 million metric tons at a gold grade of 1.0 g/t. The junior is also exploring the Taurus II property for potential additional gold for mill feed.
Northgate Minerals Corp. produced 185,162 ounces of gold and 51.9 million pounds of copper from the Kemess South Mine in 2008. Located in north-central British Columbia, the Kemess South complex consists of an open-pit mine, a 52,000-metric-ton-per-day mill and camp for 400 full-time employees. In March, the British Columbia government accepted a review panel recommendation that Northgate not be allowed to proceed with development of the nearby Kemess North deposit. The miner had hoped to produce 4.1 million ounces of gold and 1.5 billion pounds of copper reserves at Kemess North and extend mine operations at the Kemess South camp by 12 years. After Northgate received the negative review in October 2007, the company wrote off its $32 million investment in the project.
Barrick Gold Corp. closed the Eskay Creek Mine in the first quarter of 2008 after 12 years of operation and production of more than 3.5 million ounces of gold and 170 million ounces of silver. The mine, which employed 800 workers at peak production, was located in northwestern British Columbia near Stewart. In 2007, Eskay Creek produced 68,000 ounces of gold at total cash costs of negative $188 per ounce of gold, net of silver by-product credits. Ongoing exploration by Kenrich-Eskay Mining Corp. on claims optioned from St. Andrew Goldfields Ltd. and by Hathor Exploration Ltd. as well as Barrick Gold on 300,000 acres of claims in and around the historic Eskay gold camp bodes well for additional mineral production in the area.
Advanced stage exploration projects Redcorp Ventures Ltd. and its subsidiary, Redfern Resources Ltd., are pursuing the reopening of the Tulsequah Chief project, an underground zinc-copper-lead-gold-silver mine that closed in 1957.The junior estimated enough mineral reserves at Tulsequah for eight years of production, with a strong likelihood that more ore may be found at greater depth and immediately adjacent to the known orebody. Redfern continued construction of infrastructure and facilities for a 2,000-metric-ton-per-day mine in 2008 and worked to obtain permits for an unusual transportation system on the Taku River in Alaska. The junior proposes to move ore produced at Tulsequah to Juneau, where it would be transferred to conventional vessels bound for the Skagway Ore Terminal. The ore then would be loaded onto oceangoing vessels for shipment to smelters in Asia.
Adanac Molybdenum Corp. spent 2008 pursuing development of the Ruby Creek Molybdenum Project in northwestern British Columbia near the Alaska and Yukon Territory borders. Ruby Creek has a 2006 NI 43-101-compliant measured and indicated mineral resource of 212.9 million metric tons of 0.063 percent molybdenum at a 0.04 percent cutoff. A resource update based on 50 holes of drilling in 2007 and 2008 is underway. Adanac is working on an open pit mine at Ruby Creek with annual average production of 11.3 million pounds molybdenum for the first six years. Recently, the junior sought protection from creditors and undertook restructuring, including shrinking its work force by 70 percent, demobilizing the Ruby Creek site, and repaying a portion of its secured debt. Adanac hopes to attract investors for the Ruby Creek project, but also seeks buyers for the company or its assets.
Fortune Minerals Ltd.’s Mount Klappan coal project in northwest British Columbia contains one of the world’s largest undeveloped resources of high rank anthracite coal. The four resource areas at Mount Klappan are the Lost Fox, Hobbit-Broatch, Sumitt and Nass deposits. Collectively, these contain measured, indicated and inferred resources of 107.9 million metric tons, 123 million metric tons, and 2.572 billion metric tons, respectively. The Lost Fox deposit was recently assessed in a full bankable feasibility study by Marston Canada Ltd. indicating very attractive rates of return for the development under a variety of production and coal price scenarios. Fortune is seeking potential strategic partners and is evaluating potential transactions for advancing the Mount Klappan project.
Copper Fox Metals is focused on developing the Schaft Creek Project 45 kilometers, or 28 miles, west of the Stewart-Cassiar Highway in northwestern British Columbia to first production in 2013. According to a September 2008 pre-feasibility study, Schaft Creek, one of the largest copper-gold deposits in Canada, hosts a measured and indicated resource of 1.4 billion metric tons containing 4.76 billion pounds of copper, 4.5 million troy ounces of gold, 32.5 million troy ounces of silver, and 255.2 million pounds of molybdenum, with potential for expansion. Copper Fox has earned 70 percent of the 93.4 percent interest it has the right to acquire in the project from Teck Resources Ltd. Copper Fox is currently preparing a bankable feasibility study of a 100,000 t/d open pit mine with a mine life of 22-plus years. If the study results are positive, Teck has the right to partner with Copper Fox in the project.
Imperial Metals Corp. acquired the Red Chris copper-gold deposit in northwestern British Columbia in 2007. Exploration since indicates the copper-gold deposit 18 kilometers, or about 11 miles, southeast of Iskut, B.C., is likely much larger than a 2005 resource estimate of 446 million metric tons, grading 0.36 percent copper and 0.29 grams per metric ton gold. Imperial is working to develop Red Chris as an open pit mine with a 30,000 t/d process plant and a 25-year mine life with known reserves. Development of the deposit is contingent upon several factors, including construction of a power line to the area, currently being considered by the B.C. government. In 2008, the project cleared both provincial and federal environmental reviews, but MiningWatch Canada challenged the project in the courts. In December, the Supreme Court of Canada agreed to hear an appeal in the case, a process expected to take a year.
Galore Creek, one of the largest and highest-grade undeveloped porphyry-related copper-gold-silver deposits in North America, spent 2008 in a holding pattern. NovaGold Resources Inc. and Teck Cominco Ltd., 50-50 owners of the project, abruptly curtailed project construction in late 2007 when cost projections for the venture nearly doubled earlier estimates, leaping to potentially $5 billion. A January 2008, NI 43-101-compliant report estimated the Galore Creek deposit contains 785.7 million metric tons of measured and indicated resources at a 0.21 percent copper equivalent cut-off grade, grading 0.52 percent copper, 0.37 g/t gold, and 4.4 g/t silver; and 357.7 million metric tons of inferred resources, grading 0.36 percent copper, 0.18 g/t gold, and 3.7 g/t silver. After months of working to develop a more cost-effective plan with a new feasibility study, the partners opted in early 2009 to put the project on care and maintenance indefinitely. Teck cited difficulties related to low metals prices and tight credit markets as key factors in the decision..
Terrane Metals Corp. modified its development plan in late 2008 for the Mt. Milligan porphyry-style copper-gold deposit in central British Columbia in response to the recent credit crisis. Terrane purchased the project in 2006 after the previous owner, Placer Dome Inc., was acquired by Barrick Gold Corp., and has rapidly advanced the project toward production in 2012. A March 2008 feasibility study outlined a conventional truck-shovel open pit mine at Mt. Milligan with a 60,000-metric-ton-per-day copper flotation concentrator at a capital cost of $917 million. Annual production over a 15.3-year mine life is forecast to average 88 million pounds of copper and 217,000 ounces of gold. Terrane modified its plans in late 2008 to minimize project risk in 2009. The junior intends to begin construction in the third quarter.
Sable Resources Ltd. is focused on the development and exploration of its 58 square kilometers of gold- and silver-related properties in the Toodoggone region of northern British Columbia, which hosts low-grade, large tonnage copper-gold porphyry deposits, such as Northgate Mineral’s Kemess Mine, and high-grade, low-tonnage gold-silver epithermal deposits, such as Sable’s Baker and Shasta mines and the nearby historic Cheni mine. Sable owns a fully-permitted 250-t/d mill and supporting infrastructure. During the past year, Sable has pursued underground development, mill rehabilitation, an 8,000 metric-ton bulk sample extraction, tailings facility expansion, and other improvements to meet new regulatory compliance requirements.
Sherwood Copper Corp., which merged with Capstone Mining Co., in November, acquired the high-grade Kutcho Project in May from Western Keltic Mines Ltd. in an effort to diversify its assets. Kutcho hosts a high grade copper-zinc-gold-silver deposit in northwestern British Columbia about 120 kilometers southeast of Dease Lake. The new owner resumed the permitting process and engaged local First Nations and stakeholders in consultation, while studying lower-cost ways to advance Kutcho’s toward production. Capstone recently updated a resources estimate for Kutcho, saying it contains more than 12 million metric tons of ore, at a 3.7 percent copper-equivalent grade, with more than 492.4 million pounds of copper, 653.8 million lbs. of zinc, 121,000 ounces gold and 10.86 million ounces silver in contained metal.
Early stage exploration projects Northern British Columbia has experienced a spurt in mining exploration in recent years due high commodities prices and heightened interest in under-explored regions of the province. Companies have various early-stage projects underway. Among them:
Columbia Yukon Explorations Inc. has been exploring the Storie molybdenum deposit for the past three years, since acquiring rights to do so from Calgary-based Eveready Resources Corp. Storie is located 6 kilometers, or about 4 miles, south of the former Cassiar mining camp near Highway 37 in northwestern British Columbia. The property has a historic NI 43-101-compliant inferred mineral resource of 101.6 million metric tons grading 0.067 percent moly, or 0.112 percent MOS2, and is open along strike to the east, north and west and to depth. In 2009, Columbia Yukon intends to update a NI 43-101 mineral resource estimate for Storie based on results of recent extensive drilling; complete necessary studies; and obtain partners for developing the property.
Canada Zinc Metals Corp. is exploring the Akie Project in northeastern British Columbia. The property covers 6,400 hectares, about 15,814 acres, about 20 kilometers, or 12.4 miles southeast of the Cirque property, a well defined zinc-lead asset owned 50-50 by Teck Resources and Korea Zinc. Akie hosts the Cardiac Creek deposit, significant baritic-zinc-lead SEDEX mineralization. In April, a NI 43-101 report estimated inferred resources at Akie of 23.6 million metric tons grading 7.60 percent zinc, 1.50 percent lead and 13 grams per metric tons silver with a 5 percent cutoff. China-based Tongling Nonferrous Metals Group Holdings Co. Ltd. recently purchased a 13 percent stake in Canada Zinc for $4.9 million, providing capital to advance the Akie project.
Seabridge Gold Inc. completed an NI 43-101 preliminary economic assessment of its gold-copper KSM Project in the Iskut-Stikine River region, about 65 kilometers, or 40 miles, northwest of Stewart, in December. The miner envisions a 30-year mine life, recovering more than 19 million ounces of gold and 2.85 million pounds of copper from the Kerr, Sulphurets, and Mitchell zones.
Canarc Resource Corp. is developing the New Polaris gold project as an 80,000-ounces-per-year operation with an eight-year mine life in northwestern British Columbia, 60 kilometers, or 37 miles, east of Juneau near the B.C. - Alaska border. Canarc has estimated a resource on 2,956 acres of crown-granted and modified grid mineral claims at the site of the historic Polaris-Taku mine exceeding 1 million ounces of gold.
Taseko Mines Ltd. acquired the Aley niobium project in northern British Columbia in November 2007 in hopes of diversifying its mineral production and complementing its 1 million pounds of annual production from the Gibraltar Mine farther south. A similar metal to molybdenum, niobium also is used in steel-making. Discovered in 1980 by Cominco, the Aley deposit could support a mine producing 8 million to 12 million pounds of niobium annually based on historic exploration.
Hard Creek Nickel Corp. is developing the Turnagain project, a giant, disseminated nickel-sulphide deposit located in Northcentral British Columbia in preparation for a turnaround in nickel prices. Although the deposit has potential for further expansion, a large resource with more than 580,000 metric tons of recoverable nickel has already been identified. The project has potential to produce 20,000 metric tons, or 44 million pounds of nickel annually with an estimated mine life of 29 years.
Sources: Companies listed
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