Vancouver — Mineral exploration and development in British Columbia have emerged from a bad nightmare caused by weak commodity prices and an unsupportive previous provincial government.
Booming copper, gold and coal prices, coupled with a more “mining-friendly” government in Victoria, have boosted the province’s mineral industry. In particular, copper deposits throughout the central portion of the province have attracted a lot of interest from majors and juniors alike, with a number of previous producers being reactivated and companies showing a renewed interest in the old mining camps.
Afton
In the southern portion of the province’s interior, just west of Kamloops,
DRC became involved with the project in 1999 and recently began building a decline. Underground access will allow further, advanced exploration and facilitate testing and work programs en route to startup. Underground drilling designed to fill in and upgrade the project’s mineral resource to the status of reserves, as well as test the extent of the mineralized body, is about to begin.
DRC Resources expects to spend US$14.5-million on its underground development program, including drilling, bulk sampling and technical studies on the project.
A scoping study, completed earlier this year, estimates the initial capital cost of bringing the deposit to production at US$120 million.
The Afton project has a measured and indicated resource of 68.7 million tonnes grading 1.08% copper, plus 0.85 gram gold, 2.62 grams silver, and 0.12 gram palladium per tonne, or 1.68% copper-equivalent or 2.61 grams gold-equivalent.
DRC’s mine development plan proposes an initial capital cost of $140 million, taking into account available infrastructure (nearby highways, water, power and a skilled local labour force).
The Afton copper-mineralized trend extends for well over 20 km from northwest to southeast and is about 5 km wide. The trend is associated with the Jurassic felsic intrusives of the Iron Mask Batholith in Upper Triassic Nicola Group volcanics and sediments. A structural corridor has been outlined along the northwest-southeast trend and is evident from the Afton pit to the Ajax pits, about 10 km distant.
Much of the area, along trend and between DRC’s Afton project and the Ajax pits, is held by the other major explorer in the area,
Abacus began acquiring its Afton land package from Teck Cominco in 2001, and in the following year secured an agreement to acquire several of Teck’s properties, covering about 70 sq. km of strategic ground both east and southeast of the Afton pit and DRC’s discovery.
The company has conducted extensive drilling throughout its Afton land package, targeting known mineral occurrences and induced-polarization anomalies, identifying and confirming several bodies of copper-gold mineralization.
Highland Valley
About 60 km southwest of Kamloops is Teck Cominco’s massive Highland Valley mine, one of the largest copper producers in the world and now in its 20th year.
The mine produces 170,000 tonnes copper annually, along with several million pounds of molybdenum. Rallies in the prices of both metals have induced the company to consider extending the operational life of the mine by about five years, to 2013.
One option would be to push back the pit wall, which would allow the pit to be expanded, thereby providing access to more ore. A decision is expected by 2006 from the company, following geo-technical studies into wall stability.
Mount Polley
Mount Polley produced from 1997 to 2001, when operations were suspended as a result of low commodity prices. Following improved commodity prices in 2003, exploration was stepped up. This resulted in the discovery of the Northeast zone, which hosts high-grade copper sulphide mineralization.
Extensive drilling through 2003-2004 delivered significant copper intercepts not only in the Northeast zone but in the Springer and Bell zones.
Recent drilling on the Northeast zone encountered more copper-gold mineralization in its northern extension. Additionally, portions of the proposed pit previously classified as waste rock have returned significant copper values. Expansion of the zone will have a positive effect on mine-life economics and reserves.
The company’s feasibility study and reactivation plan have outlined 40.7 million tonnes of proven and probable reserves grading 0.43% copper and 0.31 grams gold.
Initial mining is expected to begin on the already partially mined Bell pit, then switch to the Northeast zone, or Wight pit. During a projected mine life of just over six years, about 250 workers will be employed.
Roughly 35 km south of Mount Polley, drilling by
The initial hole saw 361.2 metres grading 0.84 grams gold per tonne and 0.12% copper from surface on the Megabuck zone. The intercept hints at a significant mineralized system.
Imperial Metals aligned itself with Fjordland by participating in a private placement and holds a right of first refusal for future financings.
Gibraltar
After several dormant years, mining recently resumed at the Gibraltar copper mine of
Mining and processing of copper ore from the open pit began in October 2004, and the first shipment of concentrate to an Asian smelter was recently completed. Initial production is coming from the Polyanna pit.
The 35,000-tonne-per-day operation is expected to produce an average of 32,000 tonnes copper and 450 tonnes molybdenum in concentrates annually from sulphide ore. An additional 4,500 tonnes cathode copper annually are anticipated as a result of solvent extraction-electrowinning of oxide ore. Present in-pit resources will sustain at least 15 years of operation, with significant potential for increase.
Taseko acquired the mine in 1999 from Swedish mining giant
Gibraltar started producing copper in 1972 and continued doing so for 27 years.
Kemess
In 2004,
Production for 2004 at Kemess South is expected to have exceeded 300,000 oz. gold and 34,000 tonnes copper. Lower stripping ratios, improved recoveries and increased mill throughput are reported.
Meanwhile, Northgate has completed a positive feasibility study of the Kemess North project, 6 km north of Kemess South. The study outlines potential development of Kemess North starting late in 2006, with the mine life pegged at 13 years. Initially, ore would be blended with that from the present Kemess South operation until its reserves are exhausted in 2012. Plans call for on-site crushing of Kemess North ore; the material would be transported via an 8.8-km conveyor to the Kemess South mill.
Northgate estimates the mine will require an initial capital investment of US$190 million, which is US$30 million more than outlined in the prefeasibility study. The increase reflects a proposed rise in daily milling capacity to 96,000 tonnes from 86,000 tonnes.
Average
cash costs are pegged at US$180 per oz. during Kemess North’s projected lifespan of 2007-2019. Once Kemess South is depleted and high-grade ore from Kemess North starts being mined, cash costs will drop to about US$110 per oz. About 2.6 million oz. gold and 590,000 tonnes copper are to be produced from Kemess North, where proven minable reserves stand at 282 million tonnes grading 0.306 grams gold and 0.159% copper. There are also probable reserves of 132 million tonnes grading 0.31 gram gold and 0.16% copper.
Northgate is pressing ahead with permitting and financing options for development of the new Kemess mine. One option being reviewed includes selling an interest in the project to an Asian group along with a concentrate supply, or offtake agreement.
Galore Creek
Throughout 2004,
The deposit hosts an indicated resource of 285.9 million tonnes grading 0.44 grams gold and 5.7 grams silver per tonne, plus and 0.73% copper. The inferred resource is believed to be 98.8 million tonnes grading 0.37 gram gold, 4.8 grams silver and 0.54% copper.
During the year, the company completed an independent scoping study that shows the project has potential for a 23-year mine life, along with a fairly quick mine capital cost payback of 3.4 years using long-term metal prices. The report projects annual production at Galore Creek of 270,000 oz. gold, 1.8 million oz. silver and 91,000 tonnes copper over the initial five years of operation. Estimated total cash costs are US15 per lb. copper (US$330 per tonne), when gold and silver values are factored-in as credits.
Within the project area, an 8-hole, 2,700-metre drill program on the Copper Canyon property, under option from
The minerals industry in British Columbia generates more than $3 billion in revenue and employs tens of thousands at high wages.
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