Western Copper plans work on Williams Creek feasibility

Because of favorable results from this year’s drilling program, partners Western Copper Holdings (VSE) and Thermal Exploration (ASE) plan to proceed with an independent reserve calculation and pit design for the Williams Creek copper oxide deposit, 28 miles by road from this northern community.

Western Copper, whose major shareholder is Teck (TSE), optioned the property from Archer Cathro and Associates and must spend $2 million on exploration or complete a bankable feasibility study by the end of 1992. At the election of Western, Archer Cathro will retain either a 2.5% net smelter royalty interest up to $2.5 million, or a 15% net profits interest. Thermal is participating under the terms of a joint venture with Western, and has already earned a 50% interest by spending the first $640,000 on exploration. Western is now required to spend the next $960,000, with expenditures shared thereafter.

This season’s program was heavily focused on both expanding and improving reserves on the Main zone, one of at least 13 known mineralized zones on the property. However, geophysical surveys were also carried out to locate additional mineralization both along strike and in other zones on the property in order to get a better picture of the property’s geological reserve potential.

Thermal President Dale Corman appeared pleased with results from this year’s work program which involved almost two miles of trenching and 12,000 ft. of diamond drilling on the Main zone.

“We expect to have the updated reserve and the pit design by the end of this year,” Corman said during The Northern Miner’s recent property visit. “We view this work as a preliminary step to the preparation of a bankable feasibility study in 1992.”

Williams Creek has a previously calculated open pit copper oxide reserve of 9.7 million tons grading 1.02% oxide copper in the Main zone. This estimate is based on results from a limited drill program in 1990, and on work carried out on the property by previous operators during the early 1970s. But both companies say this reserve has been improved in both grade and tonnage by this year’s recently completed work program.

This view is borne out by the latest assay results which include: 174 ft. of 1.31% copper and 0.016 oz. gold per ton (from 572-755 ft.), 116 ft. of 1.39% copper and 0.010 oz. gold (from 382-504 ft.), 165 ft. of 1.35% copper and 0.032 oz. gold (from 406-580 ft.), and 183 ft. of 1.17% copper and 0.015 oz. gold (from 474-667 ft.).

Other impressive results from recent drilling are: 110 ft. of 1.36% copper and 0.026 oz. gold; 155 ft. of 1.22% copper and 0.016 oz. gold; and 137 ft. of 1.11% copper and 0.026 oz. gold.

Because this year’s drilling was more closely spaced than previous drilling and still showed good continuity of copper mineralization in the deposit, the partners are of the view that sufficient drilling has been done in the Main zone to calculate a minable oxide reserve.

So far, the steeply east-dipping mineralized deposit extends about 1,300 ft. in a north-south direction (with better grades and continuity at the north end) and is about 100-150 ft. wide. The deposit is oxidized to a depth of 800 ft., and is underlain by sulphide mineralization.

Corman declined to speculate on what the increase in tonnage and grade would be, but he did say the 1991 program increased his confidence that the property has the potential to support viable copper production using heap leaching and solvent extraction/electrowinning (SX/EW) processing. Unlike most copper mines which produce concentrates that must be transported to a smelter for refining, SX/EW operations produce cathode copper on site that is ready for sale to market. Corman said the process is viewed as a low-cost, off-the-shelf technology that is well proven.

“But we recognize that we may have a selling job to convince skeptics that this kind of operation will be viable in the Yukon,” Corman said, adding that operating conditions in the north will be tougher than in the southwestern U.S. where a number of SX/EW operations are located.

“Once we know what we have in the ground in the way of reserves, the key to the project will be the mining and heap leaching end of things,” Corman said. More metallurgical work is planned in order to confirm recoveries which are anticipated to be in excess of 85%, based on column tests on three-quarter-inch crushed material.

If the project is found to be viable, the partners expect leaching operations could take place eight months of the year, with mining continuing for about 10 months. The strip ratio has yet to be determined, but it’s anticipated to be about 2.9-to-1.

Capital costs, based on the old reserve, were estimated at about $40 million (including contingencies) for a heap leach, SX/EW operation capable of producing about 15-20 million lb. copper annually.

Western Copper and Thermal have already begun discussions with the Yukon government and with local natives as a first step in the environmental and permitting process. This work will be ongoing into 1992.