Metallurgical breakthrough key to Howards Pass

Tails do not wag dogs, or at least not for very long, and trends in the exploration business ultimately follow the forces that are driving the metals and mining business further downstream.

Metal markets, and the supply and demand curves for the commodities, are the most obvious force, bringing exploration budgets to commodities that command the best prices. But technological progress often serves as the rudder that steers exploration toward a particular deposit type.

A significant trend in zinc exploration is being driven by developments in hydrometallurgy — specifically the rise of zinc leaching as a legitimate competitor for flotation. As solvent extraction-electrowinning brought a number of new copper deposits to market, the proponents of hydrometallurgical zinc production see the potential for its use on oxide mineralization, and even on those sulphides that respond poorly to flotation.

One project whose economics could change radically with a metallurgical breakthrough is the Howards Pass zinc-lead deposit straddling the border between the Yukon and the Northwest Territories. Howards Pass, discovered in 1968 by Placer Development, now Placer Dome (PDG-T), is — by tonnage — the largest known shale-hosted zinc resource in the world, with estimates as high as 476 million tonnes grading about 5% zinc, 2% lead and 9 grams silver per tonne in three distinct deposits: OP, Anniv and XY.

Between 1973 and 1982, Placer drilled and evaluated Howards Pass, including driving a 367-metre decline on the XY deposit. U.S. Steel joined the project in 1975, providing $10 million out of a total exploration budget of $15 million to earn a 49% stake. In the end, the partners had drilled off a resource of 110.5 million tonnes grading 5.4% zinc and 2.3% lead, based on a cutoff of 4% combined lead and zinc.

Their prefeasibility evaluations of the project came up snake-eyes; getting zinc to market from Howards Pass would simply have cost too much. Part of the problem was its remoteness, which would have forced the partners to build and upgrade roads right across the Yukon to get concentrates to tidewater. Another worry was electrical power, which — at the time — would have to have been generated on-site with diesel fuel.

But by far the biggest problem was metallurgy. Howards Pass, like many shale-hosted exhalative deposits, has fine-grained mineralization, which, in turn, means long grinding times and big mills. And the mineralization is graphite-rich, which harms recoveries in conventional flotation.

When Yukon specialist Copper Ridge Explorations (KRX-V) made its deal with Placer and U.S. Steel to buy the property for cash and shares, it was betting that enough had changed since 1982 to make Howards Pass worth another look. Roads and power availability have generally improved — although the project will still need to upgrade its own road.

The prospect that new metallurgical techniques could change the picture at Howards Pass is the real wild card, though. If zinc metal can be produced at or near the site, one of the project’s worst problems — the cost of shipping concentrate — is solved.

The 1970s-era work on Howards Pass found that separately floated zinc concentrates had too much lead; lead concentrates had too much zinc. The best recovery came from floating a bulk lead-zinc concentrate — a concentrate with which comparatively few smelters are comfortable. Uncomfortable smelters do not, as a rule, write large cheques for concentrates.

Direct production of zinc metal from leaching and electrowinning would bypass both smelter charges and effectively pare the cost of trucking, since only metal and not concentrate would be moving. The increased requirement for electrical power might now be met by developing natural-gas-fired power plants rather than diesel generators.

Copper Ridge, joined in September by Billiton, now has a drill program under way to define a resource that could be developed by open pit.

Summo Minerals (SMA-T) is looking at direct-leaching technology for its Doctor project near Gunnison, Colo., where it has brought in ZincOx Resources, in which Cominco (CLT-T) has a 22% stake. Doctor is a stratiform deposit in strongly altered Front Range limestones, and its mineralization is chiefly zinc carbonate and silicate with lead carbonate and sulphate. The grades, however, run to 20% zinc in places.

Under the new property agreement, ZincOx can earn a 51% interest by spending US$800,000 on exploration work over the next three years, and bump that interest to 75% by providing another US$1.2 million in the following two years.

Another ZincOx interest is in the Reeves-MacDonald and Annex properties, near Trail, B.C., held by Redhawk Resources (RDK-V). There, the oxide cap of a carbonate-hosted zinc deposit sports grades of around 18% zinc and 6% lead.

While the platinum and palladium rush of the past year has largely taken its cues from the metal markets, and from the sudden emergence of palladium as the glam-queen of the group, developments in platinum metallurgy are causing some players to take new looks at old deposits. The best example of that mind-set is the return of exploration to the Duluth complex in Minnesota, where PolyMet Mining (POM-V) is working on the Dunka Road deposit, another U.S. Steel castoff.

Dunka Road, discovered in the 1960s, has a huge low-grade resource: 808 million tonnes grading 0.43% copper, 0.11% nickel, 1.5 grams silver, 0.06 gram gold, 0.44 gram palladium and 0.12 gram platinum per tonne. Work through the 1970s failed to produce an acceptable concentrate.

The resource is near-surface, and potentially, with low-cost open-pit mining and the direct production of metal on site, Dunka Road’s economics could change. In initial metallurgical tests, consultants for PolyMet produced a bulk sulphide concentrate with recoveries in the 70% range for most of the metals. (Copper recovery was much higher, around 95%, and cobalt recovery, at 46%, substantially lower.)

The real development was that both pressure oxidation and bio-eaching worked well on the bulk concentrate. In the best case, a chloride leach done during autoclaving recovered more than 90% of the metal in the concentrate, offering net recoveries through the whole process exceeding 70% for most metals in the mineralization.