Northwest B.C. mining opportunities at stake
Proposed Highway 37 power transmission line could benefit numerous mine projects currently in various stages of development
Bankable feasibility study completed
Project name: Red Chris
Developer: Imperial Metals Corp.
Direct employees: 250
Indirect jobs (est. 3:1): 750
Capital costs: C$400 million
Annual revenue: C$265.5 million
Annual operating costs: C$137.8 million
Yearly tax: C$38.1 million
Electricity charge: C$11.3 million
The Red Chris project, located 20 kilometers, or about 12 miles, southeast of the village of Iskut, is owned by Imperial Metals, which acquired the porphyry copper project from B.C. Metals Corp. in early 2007 for C$65 million. Red Chris would be developed as an open pit mine and possibly a later supplement to mill feed with higher grade underground ore.
Further exploration is under way while a solution is sought to supply the future mine with power. Red Chris needs an estimated 37 megawatts of power for operations and less than 10MW during construction. The estimated mine life is 25 years.
A 138 kilovolt line could potentially be built in partnership with another mining project or an independent power producer. Capital costs are currently estimated by Imperial at about C$400 million, assuming a transmission line runs from the project to Iskut. Construction would take an estimated 18 to 24 months.
Bankable feasibility study under way
Project names: Galore Creek, Mount Klappan
Developers: Teck Resources Ltd./NovaGold Resources Inc., Fortune Minerals Ltd.
Direct employees: 923
Indirect jobs (est. 3:1): 2,769
Capital costs: C$3.4 billion
Annual revenue: C$905.8 million
Annual operating costs: C$262.4 million (excluding Mount Klappan)
Yearly tax: C$81.3 million (excluding Mount Klappan)
Electricity charge: C$33.1 million
Galore Creek is located about 70 kilometers, or 44 miles, west of Highway 37 and 150 kilometers, 95 miles, northeast of Stewart. After a November 2007 announcement regarding an increase in capital costs, the giant copper-gold project has undergone a period of review and optimization that is expected to reach an initial conclusion in the fall of 2008. Assuming a favorable outcome, a revised feasibility study and project execution plan would be prepared in 6-12 months to confirm the project’s viability. After that, proposed modifications to the project’s previously approved design will require another one to three years.
Galore Creek’s potential power requirement is estimated at 100-145 megawatts during operations with a mine life of 18-20 years. It would require either a mostly dedicated 138 kilovolt line or a 287 kV line.
Mount Klappan, 150 kilometers, or 95 miles, northeast of Stewart and 330 kilometers, or about 210 miles, northeast of Prince Rupert, contains a very large resource of high-rank anthracite coal in four deposits straddling the BC Railway right-of-way southeast of the Red Chris Project. Mount Klappan’s Lost Fox deposit was assessed in a positive bankable feasibility study in 2005, that indicated a greater than 20-year mine life at an annual production rate of 3 million metric tons of pulverized coal. Fortune has assessed a number of transportation alternatives, including rail transport of product to the port of Prince Rupert, truck transport of product to the port of Stewart and slurry pipeline transport of product to Stewart or Prince Rupert. Fortune is in the environmental assessment process and expects to submit a final project application in late 2008.
At the 3 Mt annual production rate, the Mount Klappan project would require some 8-10 megawatts of power, under Fortune’s current development scenario. However, power consumption could be substantially higher if line power became available.
Pre-feasibility studies under way Project names: Schaft Creek, Turnagain, Kutcho
Developers: Copper Fox Metals Inc., Hard Creek Nickel Corp., Sherwood Copper Corp.
Direct employees: 600 (excluding Turnagain)
Indirect jobs (est. 3:1): 1,800 (excluding Turnagain)
Capital costs: C$2.99 billion
Annual revenue: C$782.4 million
Annual operating costs: C$340.4 million
Yearly tax: C$123.4 million (excluding Kutcho)
Electricity charge: C$55.5 million
The Schaft Creek project is located 45 kilometers, about 27 miles, west of the Stewart-Cassiar Highway and 60 kilometers, about 37 miles, south of Telegraph Creek. Copper Fox Metals has earned a 70 percent interest in the copper-rich polymetallic Schaft Creek Project, and has the right to acquire up to 93.4 percent interest in the project pursuant to an option agreement with Teck. At feasibility Teck can exercise certain back-in rights in order to participate in the project in partnership. A preliminary economic assessment study released in early 2008 indicates the potential to develop an open-pit mine with a projected daily milling rate of 65,000 metric tons and a mine life of more than 31 years. Copper Fox is pursuing a pre-feasibility study for a 100,000 t/d operation, submitted an environmental assessment application in 2008 and is targeting production by 2011 at Schaft Creek. Capital costs are estimated at $1.43 billion.
Power requirements are estimated at 93 megawatts (140MW under a 100,000t/d operation) with a mine life of 31 years.
The Turnagain project is located 70 kilometers east of Dease Lake and north of Turnagain River. In December 2007, Hard Creek Nickel completed a preliminary assessment study for the Turnagain nickel-cobalt-platinum project that considered a 50,000 t/d operation over a 29-year mine life. The construction schedule was estimated at 24 months with initial capital costs of C$1.38 billion. Future studies were expected to focus on a 100,000 t/d operation to benefit from economies of scale. Further exploration was planned for summer 2008. Hard Creek Nickel also began environmental baseline acquisition studies with a view to entering the provincial and federal environmental assessment processes consistent with a 2012 startup. The metallurgy of the deposits is expected to require a hydrometallurgical processing route.
Power requirements are estimated at 78 megawatts (105MW in a 100,000 t/d operation) with a mine life of 29 years.
The Kutcho project, 120 kilometers east of Dease Lake and 330 kilometers north of Smithers, completed a pre-feasibility study that evaluated the potential development of the Kutcho deposit in September 2007. In June 2008 Sherwood Copper acquired the project and released the results of a preliminary economic assessment that considered a smaller-scale, higher return development concept. The study considered a 4,000 t/d operation for an 8-year mine life and capital costs estimated at C$183 million. A pre-feasibility study is now under way along with an exploration program to support the studies.
Kutcho’s estimated power requirement is 10-15 megawatts. The pre-feasibility study assumed diesel-generated power.
Earlier stages Project names: GJ, Snowfield, KSM, Bronson
Developers: Canadian Gold Hunter Corp., Silver Standard Resources Inc., Seabridge Gold Inc., Skyline Gold Corp.
Direct employees: 1,000
Indirect jobs (est. 3:1): 3,000
Capital costs: C$3.8 billion
Electricity charge: C$68.7 million
The GJ project is located 200 kilometers, or 124 miles, north of Stewart. In March 2007, Canadian Gold Hunter reported a significant, lower-grade copper-gold resource on the property. Additional drilling, a new resource calculation and an economic evaluation of the Donnelly Zone were expected in 2008. A preliminary assumption regarding mine life for this project based on the resource size and suggested production rate is 15 years.
A preliminary estimate of the project’s power requirement is 37 megawatts. GJ is located only about 10 kilometers from Highway 37.
The Snowfield project is located 65 kilometers, or about 40 miles, north of Stewart. In March 2008, Silver Standard Resources Inc. reported an increase in the measured and indicated gold-copper resource at the Snowfield project to 3.1 million ounces. Silver Standard planned to follow-up the 2007 program with a four-drill, 20,000-meter exploration program in 2008. The earliest expected start-up date is 2015, with a preliminary estimated mine life of 10 years.
A preliminary estimate of power required for the project is 37 megawatts.
The KSM project is located 20 kilometers, or about 12 miles, southeast of the Eskay Creek mine. In February 2008 Seabridge Gold Inc. published a NI 43-101 resource estimate for the Kerr and Sulphurets zones which confirmed total resources of 29.6 million ounces of gold and more than 5.1 billion pounds of copper at KSM. In April 2008, Seabridge filed a project description with the B.C. environmental regulators, and a preliminary economic assessment is scheduled for completion by the end of 2008. Seabridge also planned a 2008 drill program and began environmental studies required for the permitting process.
The project falls within and adjacent to traditional territories of two or more First Nations. An access road to the proposed plant site, along which a transmission spur line is expected to run, is 12 kilometers, or about 7.5 miles, long. The earliest expected start-up date is 2015 and a preliminary estimate of mine life is 25 years.
The estimated power requirement for KSM is 150 megawatts. The KSM deposits are adjacent to Silver Standard’s Snowfield project, which offers potential infrastructure synergies and savings for developers of the two projects.
The Bronson project is located 110 kilometers, or about 68 miles, northwest of Stewart. In May 2007 Skyline Gold Corp. reported completion of an updated measured and indicated resource at Bronson containing significant gold, silver, copper and molybdenum. In August 2007 the company began a preliminary economic assessment, including conceptual pit plans, a mine schedule, process plant design, construction cost estimate, mining and processing cost estimates. The preliminary estimate of the mine life for Bronson is said to be 15 years.
The project’s estimated power requirement is 20 megawatts.
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