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Vol. 12, No. 30 Week of July 29, 2007
Providing coverage of Alaska and Northwest Canada's mineral industry

MINING NEWS: Kutcho Creek strides toward first ore

Western Keltic Mines advances project on several fronts to bring promising B.C. copper-zinc property into full production by 2010

Rose Ragsdale

For Mining News

Kutcho Creek is another copper-zinc project in the mineral-dense region of northern British Columbia that is rapidly headed toward development. Among the numerous mines and mining development projects in the area are NovaGold’s Galore Creek and bcMetals’ Red Chris.

The 100 percent-owned Kutcho Project is the sole major asset of Western Keltic Mines Inc. which has spent about C$25 million in the past three years at the property. Well into a C$4.8 million field and construction program this season, the Vancouver-based junior is pursuing an aggressive timeline aimed at achieving full production at Kutcho Creek by early 2010.

The property, which features three distinct deposits, is about 56 miles east of the small town of Dease Lake on land that is part of the aboriginal territory of the Tahltan and Kaska Dena First Nations in northwestern British Columbia.

Western Keltic acquired the Kutcho property in 2004 from Barrick Gold Corp. and Sumac Mines, a Canadian subsidiary of Sumitomo. The previous owners had invested some C$20 million in exploration there.

At Kutcho, the Main, Sumac and Esso deposits are believed to host copper-zinc deposits with an aggregate size of 31 million tons, containing 890 million pounds of copper, 1.26 billion pounds of zinc, and 22 million ounces of silver.

The Main deposit contains measured and indicated resources of 17.3 million tons, grading 1.65 percent copper, 2.15 percent zinc, 0.84 ounces per ton silver and 0.01 ounces per ton gold, plus an inferred resource of 894,088 tons, grading 0.95 percent copper, 1.92 percent zinc, 0.77 ounces per ton silver and 0.01 ounces per ton gold, according to a new resource estimate announced June 25.

The Sumac deposit contains an inferred resource of 11.68 million tons, grading 0.94 percent copper, 1.45 percent zinc, 0.45 ounces per ton silver and 0.005 ounces per ton gold, while the Esso deposit contains an indicated resource of 2.25 million tons, grading 2.24 percent copper, 3.96 percent zinc, 1.21 ounces per ton silver and 0.02 ounces per ton gold and an inferred resource of 487,779 tons, grading 2.47 percent copper, 4.15 percent zinc, 1.22 ounces per ton silver and 0.07 ounces per ton gold.

“This new resource estimate is very positive news for Western Keltic and is an important milestone towards the completion of a pre-feasibility study, now expected at the end of July 2007,” Western Keltic President and CEO John McConnell said in the announcement.

Western Keltic hired McConnell in April 2006. Known in the industry as a mine builder, McConnell brings 32 years in Canadian mining to the job. He last directed development and construction of the Snap Lake Diamond Project in the Northwest Territories for De Beers Canada Inc.

Western Keltic said the purpose of the pre-feasibility study is to confirm how Kutcho’s three deposits could be developed to benefit its stakeholders, including the First Nations.

A pre-application environmental permitting and review process is also under way through the B.C. Environmental Assessment Office.

Plans call for Western Keltic to undertake a feasibility study for the Kutcho Project and to submit an application for an environmental assessment in the third quarter of 2007 and expect completion of mine permitting in time to begin construction in the summer of 2008.

Western Keltic has said the Main deposit is suitable for low cost, open-pit mining. Metallurgical tests demonstrated that it can produce high quality, marketable, copper and zinc concentrates, according to the company. After considering open pit and underground mining methods, Western Keltic is leaning toward using both at Kutcho Creek.

Initial plans foresee production at 2.2 million tons per year, producing 39,683 tons of copper, 42,990 tons of zinc, 92,600 pounds of silver and 750 pounds of gold in concentrate annually during the first seven years.

The concentrates would be transported by truck from the Kutcho Project to a deepwater port in Stewart, B.C., for shipment to Asian smelters. In April, Western Keltic signed a memorandum of understanding with Stewart Bulk Terminals Ltd. to start negotiations for the provision of a concentrates storage and loading facility at the port.

If a mine is developed at Kutcho Creek, Western Keltic officials have said they would like to strike up a partnership with a midtier production company rather than a major.

The junior also hopes to attract investment from Asia, where industry is eager to secure base metals. In May, Western Keltic hired The Balloch Group, a consulting firm based in Beijing, to assist with identifying potential investors in Asia. TBG was founded in 2001 by former Canadian ambassador to China, Howard Balloch.

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