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Vol. 22, No. 39 Week of September 24, 2017
Providing coverage of Alaska and Northwest Canada's mineral industry

Mining News: More Red Dog zinc

Improved recoveries up 2017 output, expanding discoveries for the future

Shane Lasley

Mining News

After getting off to a relatively slow start, the Red Dog zinc mine in Northwest Alaska is finishing 2017 strong.

Teck Resources Ltd., the operator at Red Dog, said it now expects the mine to produce up to 550,000 metric tons of zinc this year, which is about 12 percent more than the company was anticipating at mid-year.

Adding to the good news for near-term production at Red Dog, Teck reported promising results from a major exploration program at Aktigiruq, a significant high-grade zinc deposit the company is exploring about 7.5 miles north of the Red Dog mill.

"We are pleased with the significant improvements in recovery at our Red Dog Operations in the last few months and consequently production will now exceed previous guidance for the year by approximately 50,000 tonnes (metric tons)," Teck President and CEO Don Lindsay said on Sep. 18. "As well, our exploration results at our nearby Aktigiruq deposit show its potential to be one of the best undeveloped zinc deposits in the world."

Challenging ore

By mid-year, Red Dog had only produced 230,300 metric tons of zinc. While this six months of production was already enough to make the Northwest Alaska operation among the top five zinc mines on Earth for 2017, it was a slow start for an operation that ships roughly 5 percent of the world’s new supply each year.

This relatively slow start to the year was due to challenges of processing the higher grade but more complex ore from Qanaiyaq, the third pit developed at Red Dog.

During the first quarter of 2017, ore from Qanaiyaq pit was introduced to supplement declining grade ore from the Aqqaluk pit. However, mill performance was adversely affected by the metallurgically complex ores, particularly the highly oxidized material being mined at the surface of Red Dog.

Due to the difficulties, Teck cut back how much Qanaiyaq ore its was feeding the plant and trimmed its guidance for 2017 Red Dog zinc production to 475,000 to 500,000 metric tons, which is about 12 percent less than the 545,000 to 565,000 metric tons of zinc the company had expected going into the year.

Thanks to changes in mine sequencing and improved metallurgical recoveries, which is resulting in more of the high-grade Qanaiyaq ore being fed to the mill during the second half of the year, Teck now expects to make up most of the 2017 production losses.

With the improvements, Teck is forecasting that Red Dog will produce roughly 300,000 metric tons of zinc during the second half of 2017, or 525,000 to 550,000 metric tons of the galvanizing metal for the year.

Mill upgrades

Teck anticipates strong zinc production to continue at Red Dog in the coming years, thanks to ongoing improvements to the mill.

The company is forecasting annual zinc production at Red Dog to range between 475,000 and 550,000 metric tons over the next five years.

This assumes completion of a US$110 million mill upgrade project that is expected to increase average throughput by about 15 percent over the remaining mine life, which will offset the challenges of processing lower grade and harder ore in the Aqqaluk pit.

These improvements to the mill are expected to be finished by the end of 2019.

While these upgrades will increase the amount of ore being fed through the mill, the current life expectancy of Red Dog remains the same. This is because more lower-grade ore from Aqqaluk and Qanaiyaq will be processed, meaning these deposits will feed the Red Dog mill until 2031.

Decades of zinc

By the time Qanaiyaq is mined out, it seems likely that Aktigiruq on state mining claims to the north will be ready to supply high-grade zinc ore to the Red Dog mill – potentially for decades.

This year, Teck is investing C$16 million on an exploration program at Aktigiruq that includes roughly 18,000 meters of drilling in 16 to 20 holes.

While Aktigiruq has not been drilled sufficiently to calculate an NI 43-101-compliant resource estimate, the 25 widely spaced holes drilled prior to 2017 suggest this exploration target has somewhere between 80 million and 150 million metric tons of material averaging around 13 percent zinc and 4 percent lead.

If realized, this would make the Aktigiruq zinc deposit one of the top undeveloped zinc deposits in the world and could feed the Red Dog mill for several decades beyond 2031.

For comparison, Red Dog has processed 78.3 million metric tons of ore averaging 19.6 percent zinc and 5.3 percent lead over 27 years.

Going into 2017, Red Dog had 50.9 million metric tons of proven and probable reserves averaging 15 percent zinc and 4.2 percent lead.

No analytical results for the 2017 program at Aktigiruq were reported, but the high-grade zinc mineralization is easy to recognize and Teck said visual estimates are consistent with expectations.

Teck plans to report the results from Aktigiruq drilling once all assay results are returned.

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