With 9.9 billion pounds of copper and 38.2 million ounces of gold in reserves, a provincial environmental certificate in-hand and federal approvals pending, Seabridge Gold is in the final stages of gathering all of the components needed to develop a mine at its Kerr-Sulphurets-Mitchell project in northwestern British Columbia. Attracting a partner of the same world-class caliber as the deposits that make up the project simply known as KSM and getting that final stamp of approval from the federal government are the key outstanding pieces.
In the wake of a recent tailings dam failure at Imperial Metals’ Mount Polley Mine to the south, however, many in British Columbia and across the border in Alaska are calling for an extra level of scrutiny before Seabridge or any other company is permitted to build a mine in Canada’s westernmost province.
To alleviate concerns over the integrity of existing and future tailings facilities in the province, British Columbia has assembled a panel of engineering experts to investigate the cause of the breached dam at Mt. Polley Mine and is expected to beef up dam regulations based on the panel’s findings and recommendations.
The proposed KSM tailings facility, which has already been engineered to standards that exceed regulatory requirements, will get weighed against the new standards set by the province.
On the federal level, environmentalists and Alaska legislators, who are concerned about the quality of the waterways that run from KSM into the state, are calling for an independent panel to review Seabridge’s mine proposal before the project is given final go-ahead.
In the meantime, Seabridge continues an exploration program that is adding copper and gold to a northwestern B.C. project that already ranks among the world’s largest repositories of these metals.
“The Seabridge exploration team believes the 2014 program will be our best yet. The excitement level is really palpable as the drilling begins,” Seabridge Gold Chairman and CEO Rudi Fronk said upon the June start of drilling at KSM.
Alaskans seek assurance
In July, the British Columbia Ministers of the Environment and Energy and Mines put its stamp of approval on an environmental assessment certificate for development of a mine at KSM.
“This decision confirms that KSM is a well-designed, environmentally responsible project which is technically feasible and offers significant economic benefits to both British Columbia and Canada,” said Fronk. “This decision also affirms the value of extensive public consultation early in the environmental assessment process which helped us to understand the cultural, social, environmental and economic context of the KSM project.”
The project now awaits a final decision by the Canadian Environmental Assessment Agency.
In a report released in July, the federal agency wrote, “the KSM Project is not likely to cause significant adverse environmental effects taking into account implementation of the mitigation measures described in the report.”
A 30-day comment period on the KSM report concluded on Aug. 20 and a decision by the federal minister of environment is expected in coming weeks.
Conservation groups in Alaska, meanwhile, wasted no time in drawing comparisons between Mount Polley and KSM.
“This is exactly the type of disaster we are trying to avoid on the Unuk and Nass Rivers by seeking a higher standard of environmental review for the KSM project,” said Brian Lynch of the Petersburg Vessel Owners Association two days after the tailings dam failure at Mt. Polley. “We urge that Canada issue no new mine permits in the trans-boundary river region until there is a full investigation of this accident and guarantees that similar accidents won’t occur at larger mines proposed in the Unuk, Stikine and Taku watersheds.”
Lynch has been an outspoken advocate for Salmon Beyond Borders, a group sounding alarms about the effects mining in northwestern British Columbia will have on salmon-bearing streams in Southeast Alaska.
KSM is located near the Unuk River, a salmon-bearing stream that flows into Alaska near Ketchikan.
Alaskan’s downstream concerns were addressed in the Canadian Environmental Assessment Agency report on KSM.
“The agency is satisfied that identified mitigation measures for the project would address potential impacts in Alaska on fish; recreational and commercial fisheries and human health from changes to water quality and quantity in the Unuk River,” CEAA wrote.
In light of what happened at Mt. Polley, U.S. senators Lisa Murkowski, R-Alaska, and Mark Begich, D-Alaska, have requested an extra level of scrutiny at KSM.
In separate letters, the senators urged U.S. Secretary of State John Kerry to work with his Canadian counterpart to implement steps that would ensure the environmental integrity of KSM and other new mines that may be developed upstream from Alaska.
“One such step would be to encourage Canada’s federal government to undertake a panel review of the Kerr-Sulphurets-Mitchell mine in British Columbia,” suggested Murkowski.
A panel review would help guard against a similar breach of wastewater and tailings, which in the case of the KSM mine could be released into the Unuk River, just 19 miles (30 kilometers) north of the Alaskan border.
Though a panel review has yet to be ordered for KSM, closer scrutiny of the proposed tailings facility by independent experts is almost certain.
Nisga’a reaffirm support
While some fisherman and Natives in Southeast Alaska are concerned about the potential upstream development, the Nisga’a First Nation has come to embrace the development of a world-class mine on its traditional territory in northwestern B.C. – a commitment to responsible resource development the tribal group reaffirmed in the wake of the Mt. Polley tailings dam failure.
“We appreciate Seabridge’s approach to working with the Nisga’a Nation. They started working with us early on in the development phase of the KSM Mine and they have taken seriously and been very responsive to our concerns around the environmental and social impacts of the project on Nisga’a Treaty interests,” Nisga’a Nation President Mitchell Stevens said on Aug. 14.
This affirmation came with an agreement in principle on material components of a benefits agreement in connection with KSM.
“Reaching agreement in principle demonstrates that the Nisga’a Nation is open for business, and that we support environmentally responsible economic development that respects the interests of the Nation under our Treaty. Seabridge has demonstrated an ability to work cooperatively with us on both counts,” explained Stevens.
To abate environmental concerns raised by Nisga’a Nation, Seabridge has already agreed to take precautionary measures that go beyond the bounds of what is required by provincial and federal law. This includes lining a portion of the tailings facility, a level of security not required under existing regulations.
While the primary function of the geo-membrane used to line the tailings pond is to prevent seepage, it also would add to the structural integrity of the dam.
“We have listened to their environmental, cultural and economic concerns, which have been reasonable and well thought out, and we have incorporated responses to these concerns into the final design which is now in the formal Environmental Assessment review process. From our perspective, our ongoing relationship with the Nisga’a Nation, which began more than five years ago, captures the spirit of mutual respect and careful attention to detail that is needed in the development of major mining projects,” said Seabridge CEO Fronk.
Adding copper, gold
With 2.16 billion tons proven and probable reserves averaging 0.55 grams per metric ton (38.2 million ounces) gold, 0.21 percent (9.89 billion pounds) copper, 2.74 g/t (191 million ounces) silver and 44.7 parts per million (213 million pounds) molybdenum, the KSM project has found plenty of ore grade material to support a 130,000 metric ton per day mine at KSM for more than 50 years.
While these stores already rank KSM as world-class, recent and ongoing drilling is revealing deeper “core zones” that are looking to increase the size and grades already delineated at this copper-gold mine project.
Deep Kerr, located below the Kerr portion of the KSM deposits, is currently the most promising of the expansion targets.
Following a 25-hole, 23,802-meter program at Deep Kerr in 2013, Seabridge announced a maiden inferred resource of 515 million metric tons grading 0.53 percent (6.1 billion pounds) copper and 0.36 g/t (5.9 million ounces) gold.
“Deep Kerr has the size and grade of a world-class deposit, and it is very well-situated for low-cost, efficient underground block cave mining. The resource model assumes this method of exploitation and is based on a set of realistic economic assumptions derived from similar deposits now in production. We therefore have a high degree of confidence that, with further work, Deep Kerr can mature into an outstanding opportunity for a large, high margin operation attractive to major mining companies,” Fronk commented on the resource reported in February.
Seabridge geologists believe that Deep Kerr is not only ripe for expansion in terms of size but grade as well.
“We think the best is yet to come. Deep Kerr has excellent continuity of grade vertically and laterally within the deposit, which is helpful for mine planning and lower costs, but there is also a strong apparent improvement in thickness and grade to the north, which was the site of the last holes drilled in our 2013 program,” Fronk explained.
Eager to add tons of higher grade mineralization to Deep Kerr and test other similar targets at KSM, Seabridge launched a 19,000-meter drill program in June.
One of the priority targets for 2014 is to determine the northern extension of the deposit with step-outs that could extend the strike of Deep Kerr by several hundred meters in that direction.
The company also plans to drill deeper into Deep Kerr, where mineralogical data suggests greater concentrations of copper-rich bornite could be lying in wait.
In addition to expanding the known Deep Kerr, company geologists will be seeking a twin that could be hiding to the east.
Seabridge is basing its Deep Kerr east theory on the standard model for very large porphyry mineral systems such as Bingham Canyon in Utah, where the core of the source intrusion typically pushes its metal load out to the margins. Variations in pressures and temperatures as the fluids move away from its source results in various mineralization, creating a somewhat symmetrical metallic thumbprint of sorts.
If this model applies to Deep Kerr, Seabridge believes it would mean that the resource drilled to date may only represent half the mineral thumbprint, leaving open the possibility of an eastern counterpart yet to be found. The company believes such a discovery would be significant, potentially repeating the known Deep Kerr deposit in addition to the expected expansion of the west limb to the north.
Data from the original Kerr deposit in combination with 2011 geophysical surveys that indicate the rocks in the eastern part of the Kerr system have properties similar to the already discovered Deep Kerr zone provides further evidence that an eastern extension of Deep Kerr could exist.
A round of recently completed magnetotelluric surveys, a geophysical technique that measures fluctuations in naturally-occurring electrical and magnetic fields, adds to the growing body of evidence pointing to a second deposit below Kerr.
These magnetotelluric surveys were used to guide the discovery of the original Deep Kerr and could be useful tool for locating the foreseen eastern extension and group of other core zones Seabridge believes to be lurking below the deposits it has already discovered at KSM.
“Our understanding of the KSM system has increased immensely since the discovery of Deep Kerr, and the more we learn, the more upside we see. We now know a great deal more about the geophysical and geochemical signatures of the higher grade core zones we are looking for, and we also have unraveled the major displacements that have occurred along the district’s faults,” Fronk expounds. “With these powerful tools at our disposal, we are confident that we will find more core zones this summer. Both copper-rich and gold-rich targets are included in the program.”
Below Iron Cap
Aside from Deep Kerr, Seabridge’s 2014 search for core zones will focus on higher grade depth extensions of Iron Cap, a deposit with an indicated resource of 361.7 million metric tons averaging 0.44 g/t (5.1 million ounces) gold, 0.21 percent (1.7 billion pounds) copper, 5.4 g/t (62.8 million ounces) silver and 47 ppm (37.5 million pounds) molybdenum.
Iron Cap is currently designed as an underground block cave mine, sitting about 1,000 to 1,200 meters laterally from the access tunnels designed for the KSM project, making it the closest deposit to infrastructure. Seabridge said deeper and higher grade zones of copper and gold would significantly improve the Iron Cap deposit with little change to the KSM project design.
Drilling over the past couple of years has sought a higher grade core zone below Iron Cap. One such hole, IC-13-49, cut 261.4 meters of 0.40 percent copper and 1.09 g/t gold.
Instead of a top-down approach, this year’s drilling is designed to cut across the projected Iron Cap core zone.
“We think that, at Iron Cap, we may right now be where we were last year at this time with Deep Kerr. The last holes drilled at Iron Cap in 2013 generated well-mineralized intercepts up to 850 meters long as well as some exceptional grades directly below existing resources including 51 meters containing 1.38 g/t gold and more than half a percent of copper. We appear to be closing in on a significant discovery that may be more gold-rich than Deep Kerr.”
