Vancouver — With $5 million in its coffers,
This year’s $1.1-million drilling campaign, which began in late April, is part of a larger, $4.7-million exploration program aimed at extending the Main zone toward the southwest.
The deposit, a former producer, is 350 km northeast of Vancouver and 10 km west of Kamloops. Topography consists of low, rolling hills surrounded by mountains, and the project is perched at an elevation of 700 metres above sea level.
Hole 52, part of this year’s campaign, intersected 38 metres averaging 0.65% copper plus 0.46 gram gold, 0.124 gram palladium and 0.93 gram silver per tonne starting at 186 metres down-hole. This was followed by 62 metres of 1.61% copper, 1.02 grams gold, 0.217 gram palladium and 0.31 gram silver per tonne starting at 224 metres down-hole. The hole intersected mineralization west of the mineralized envelope that was used to calculate the most recent resource estimate.
Over the past two years, the company has spent $2.5 million on the project, drilling a total of 49 NQ-sized holes (47.6 mm core diameter), or 23,800 metres. Of these, 38 intersected the mineralized zone.
Significant intervals from previous drilling include the following:
– 204 metres averaging 1.53% copper and 0.035 gram gold starting at a down-hole depth of 550 metres;
– 263 metres of 1.58% copper and 0.034 gram gold starting at 320 metres down-hole; and
– 158 metres of 1.65% copper and 0.021 gram gold starting at 326 metres down-hole.
The Afton Main zone represents a steeply plunging body that strikes to the southwest from the base of the 274-metre-deep open pit. The zone averages 70 metres wide, 600 metres long and 775 metres deep. In addition, DRC has delineated the Northeast Extension zone, which measures 30 metres wide and is an en echelon extension of the Main zone. The total length of mineralization is now 850 metres, and the deposit remains open along strike to the northeast and southwest.
The Main zone has an indicated resource of about 34.3 million tonnes grading 1.55% copper, 1.14 grams gold, 0.125 gram palladium and 3.42 grams silver per tonne.
The Northeast zone has an indicated resource of roughly 1.1 million tonnes averaging 1.02% copper, 0.86 gram gold, 0.1 gram palladium and 5.49 grams silver per tonne. This portion of the resource was tested with only five closely spaced holes.
The resources were estimated by an independent Qualified Person in compliance with the policies and standards of the TSX Venture Exchange and the Canadian Institute of Mining, Metallurgy and Petroleum. A 0.5% copper cutoff grade was used.
The Afton deposit is in the 35-km-long Iron Mask batholith at the northwestern end of the Iron Mask pluton. These intrusions consist of Triassic-aged diorites and gabbros within andesitic and basaltic rocks, breccias, tuffs, mudstones, argillites and limestones of the Nicola Group.
Mineralization in the area was discovered in the late 19th century, and the region was sporadically explored until the late 1950s, but with no significant discovery. In 1965, Chester Miller drilled 35 holes, one of which cut 51.8 metres grading 0.4% copper. In 1972, Teck optioned the property and, three years later, made a positive production decision.
Historic production
The Afton open-pit mine was built at a cost of $85 million and began operating in 1978. Mining ceased in 1987, as the pit had exhausted all of the minable supergene native copper, chalcocite and chalcopyrite ore. Between 1978 and 1987, Afton produced 200,000 tonnes of copper and 400,000 oz. gold from 21.7 million tonnes of ore. Teck then mined the adjacent Pothook deposit and the nearby Ajax pits until August 1991. Those operations were shut down as a result of slumping copper prices. At the Ajax deposit, mining resumed in 1994 and continued until 1997, when it ceased permanently.
From 1973 until 1980, Teck outlined an underground resource at the Afton pit; this was estimated to contain 6.5 million tons averaging 1.55% copper, 0.0047 oz. gold and 0.2 oz. silver per ton. In 1999, DRC acquired the Afton claim group and tested for the possible extension of this resource. Their initial, 21-hole drilling campaign resulted in the delineation of an additional 22.7-million-tonne indicated resource averaging 2% copper, 1.39 grams gold, 6.22 grams silver and 0.14 gram palladium per tonne. This resource is adjacent to and below the southwestern portion of the existing open pit. The zone represents a northeast-striking tabular body.
In January 2001, DRC Resources contracted Behre Dolbear to perform a scoping study. Copper recoveries were found to be 87%; gold, 90%; palladium, 76%; and silver, 90%.
Financially, the capital cost of restarting the mine was pegged at $91 million. The net present value using a 10% discount rate was pegged at $117.8 million with an internal rate of return of 32.3%. Metal prices of US70 per lb. copper, US$300 per oz. gold, US$400 per oz. palladium and US$4.50 per oz. silver were used in the calculations.
Dolbear did not find any significant environmental issues that would hinder DRC’s plan to restart operations.
Magmatic
The resource is hosted in altered and shattered micro-diorite rocks. Mineralogically, this zone hosts bornite, chalcocite and chalcopyrite. Petrographic studies indicate that the sulphide mineralization may have originated in a high-temperature, deep-seated, magmatic environment, as opposed to veining or a metasomatic origin.
Moving southeast, the mineralized rock becomes more competent in both the hangingwall and the central portion of the zone. The hangingwall is described as an “incompetent breccia [unit] with a gritty, unconsolidated matrix.”
To expedite production, DRC is considering developing the underground deposit in two phases. The first phase would see the initial infrastructure developed to mine the upper 152 metres of the mineralization. In the next phase, a second lift would be developed in order to mine the bottom of the resource during the eighth year of production.
The scoping study recommends shipping a copper concentrate to Vancouver via truck and rail for transport to an offshore smelter. The concentrates are expected to contain up to 0.4% arsenic, which may trigger a small smelter penalty. Mined material would be treated at the existing Afton concentrator. The current facilities will require new equipment or upgrades — specifically, an underground primary crusher, a conveyor-belt system, flotation, filtration and tailings pumping, and distribution systems. In addition the mill will require an overhaul.
DRC Resources has 9.9 million shares fully diluted.
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