Imperial hitting long intercepts below planned pit at Red Chris

Vancouver – The open-pit resource at Red Chris, a copper-gold project in northwest British Columbia, is already enough to support a mine for 25 years but now owner Imperial Metals (III-T) is pulling long, mineralized intercepts from beneath the proposed pit, signalling the potential for significant resource growth.

Imperial is working through an eight-hole program at Red Chris to test for deep mineralization. The holes, which are targeting 1,500 metres depth, are all step-outs from a late-2007 hit that first indicated the presence of deep mineralization in the eastern portion of the deposit: hole 335 returned 1,024 metres grading 1.01% copper, 1.26 grams gold per tonne, and 3.92 grams silver per tonne, from surface.

The company has completed five holes, four of which reached their target depths, and recently received results for the first three.

Hole 346 was an angled hole collared 270 metres north of hole 335 and drilled southward; it returned 513.6 metres grading 0.61% copper and 0.91 gram gold starting 530 metres downhole, including two higher-grade segments. At 615 metres downhole, or directly beneath the base of the proposed open pit, the hole hit 191.1 metres averaging 0.92% copper and 1.53 grams gold. And at 995 metres downhole the drill cut 48.6 metres of 1.01% copper and 1.8 grams gold.

Hole 345, a vertical hole collared 110 metres north of hole 335, returned 526.5 metres grading 0.77% copper and 1.37 grams gold from 426 metres depth. Several intervals carried higher grades, such as 44 metres of 2.22% copper and 3.22 grams gold from 475 metres depth and 116 metres of 1.06% copper and 3.11 grams gold from 834 metres depth.

Hole 344 was terminated at just 331 metres depth because of technical difficulties. To that point the core returned 329.7 metres averaging 0.37% copper and 0.4 gram gold, an intercept from within the bounds of the open-pit shell.

Imperial plans to drill at Red Chris through the winter, with further deep drilling to be guided by full results from the current program. Winter work is now possible, after Imperial spent some $3 million in 2008 constructing an access road into the project.

A 2005 feasibility study of Red Chris estimated proven and probable reserves of 276 million tonnes grading 0.349% copper and 0.266 gram gold. The reserves support 30,000-tonne-per-day operation for 25 years. The planned pit is some 1.8 km long and up to 1 km wide, covering two zones known as the Main and East zones.

The study assumed access to grid power, an assumption that came much closer to being a reality when the B.C. and federal governments in September announced concrete plans to build the Northwest Transmission Line along highway 37 to Bob Quinn Lake. Red Chris sits another 120 km north along highway 37 from Bob Quinn Lake but the new line will bring power significantly closer to the project.

The final obstacle in Imperial’s path is the continuing legal battle over the federal government’s approval of the project. The federal departments responsible for assessing the environmental impact of a mine at Red Chris, which are Fisheries and Oceans Canada and Natural Resources Canada, issued a screening report in 2006 concluding the project was not likely to cause significant adverse environmental effects and authorized mine development. They did so after deciding to forgo a comprehensive review and public consultation process for Red Chris because the B.C. government had already undertaken a full-scale review, which the federal departments used to come to their conclusions. Environmental groups opposed to the mine challenged the federal government’s authority to decide that a project can be approved through a screening rather than a full review.

The Federal Court of Appeals already heard the argument and, overturning a lower court decision that had invalidated the federal environmental assessment approval, supported the federal government’s authority to reclassify the project’s assessment as a screening review. The case then moved to the Supreme Court of Canada, which heard arguments on October 16. A decision is expected in early 2010.

On news of the deep drilling results Imperial’s share price gained 13¢ to close at $5.63. The company has a 52-week trading range of 93¢ to $6.15 and has 32 million shares outstanding, 35.6 million fully diluted.