Former Redfern Resources Ltd. CEO Terrence Chandlar is taking another shot at reopening the Tulsequah Chief Mine on British Columbia’s western border, about 45 miles, or 70 kilometers, east of Juneau.
Under Chandlar’s leadership, Redfern Resources had gained the regulatory approval needed from Canadian agencies to reopen the copper-gold-silver-zinc-lead mine and was working with Alaska officials to obtain permits required to transport metals concentrates through Alaska on the way to Pacific Rim smelters. But in 2009, before the mining firm could develop an acceptable transportation plan, Redfern and its parent company, Redcorp Resources, were forced to file for bankruptcy in the Supreme Court of British Columbia.
Alvarez & Marsal, a firm that specializes in helping reorganize troubled companies, has requested that the British Columbia Environmental Assessment Office transfer the environmental certification issued to Redfern to develop and operate a mine at the Tulsequah Chief project to Chieftain Metals Ltd., a private company formed by Chandlar.
This renewed interest in furthering the development of Tulsequah has caught the attention of Alaska regulators.
“During Redfern’s Tulsequah permitting effort, the permitting process for the air cushion barging in Alaska was out of synch with the mine permitting and construction activities. This resulted in construction occurring in advance of a permitted transportation solution for the project, which likely contributed to the financial difficulties that culminated in Redfern being placed in receivership,” Alaska Department of Natural Resources Large Mine Project Manager Thomas Crafford wrote in response to the possible transfer.
Redfern became financially strained after it abandoned plans to build a 96-mile road from the mine to Atlin in favor of using air cushion barges to transport ore and supplies on the Taku River to its mouth near Juneau. While the company was forming and permitting an acceptable plan to traverse the Taku without potential damage to Southeast Alaska’s most prolific salmon stream, the financial turmoil of late 2008 set in, forcing the Tulsequah operator to close its doors.
Leaking for decades
Tulsequah Chief has, for decades, been a subject of concern for Alaska environmentalists and regulators. The mine, which was in operation from 1937 to 1957, has since been leaking acidic metal-bearing water, which is believed to be reaching a tributary of the Taku River.
As one of her last acts before leaving office in 2009, former Alaska Gov. Sarah Palin wrote a letter to her counterpart in British Columbia urging the province to address the acid mine drainage seeping from the historic mine.
Redfern had purchased and begun installation of a plant to treat the acid mine drainage at Tulsequah, but the company filed for bankruptcy before the water treatment facility could be made operational.
In a letter to McIntosh & Morawetz Inc., the court-appointed receiver of Redfern assets, Alaska Department of Natural Resources Commissioner Tom Irwin asked that the company’s debtors leave the water treatment plant at Tulsequah, but the state never received a response to its request.
Though there has been some talk that the facility is still at the mine, Mining News has not been able to confirm the report.
In his comments to British Columbia regulators, Crafford requested, “Any transfer of the property and its associated authorizations should be tied to a plan and an enforceable commitment, including a timetable, for addressing the existing acidic mine drainage and metal leaching from the mine workings and waste materials currently at the site.”
The Alaska regulatory agency asked about the status of financial assurances to address acid mine drainage at the project.
Getting metal to market?
Even if Chieftain is successful in gaining ownership of Tulsequah and the British Columbia environmental permits needed to put the mine in operation, the ore would still be landlocked, and there is no indication of how the company plans to get the concentrates to market.
Tulsequah Chief is believed to contain a probable reserve of 5.4 million metric tons grading 1.40 percent copper, 1.20 percent lead, 6.33 percent zinc, 2.59 grams per ton gold and 93.69 g/t silver.
“The state feels that authorizations for further construction, beyond that required to address the AMD issue at the site, should be linked to the project’s need for a permitted transportation solution,” Crafford wrote to British Columbia regulators.
Alaska’s large mine project manager said DNR has not been contacted by Chandlar or anyone else associated with Chieftain Metals about gaining the permits needed for transporting ore via the Taku River.
The 28-mile section of the transportation route between the mouth of the river and the US-Canada border would likely require two State of Alaska permits: a land use permit from DNR and a fish habitat permit from the Alaska Department of Fish and Game.
The state also would like to collect US$77,858 in expenses owed by Redfern that is associated with the company’s attempt to permit the use of air cushion barges on the Taku.
In February, Chandlar joined Strategic Resource Acquisition Corp. as that company’s executive vice president.
