Imperial grows Red Chris significantly (May 03, 2010)

Vancouver – With just 22 drill holes, Imperial Metals (III-T) has dramatically increased the contained metal count at its Red Chris project in northwest British Columbia, adding 2.7 billion lbs. of copper and 5.3 million oz. gold.

The resource boost was driven by Imperial’s deep drilling effort at the project. In late 2009 the company embarked on a deep drilling program designed to follow up on a 2007 hole that hit 1,024 metres grading 1.01% copper and 1.26 grams gold per tonne, with most of the intercept sitting below the planned pit. The program tested for mineralization within at least 1,000 metres of surface, which is more than double the depth of past drill holes, though some holes continued to 1,500 metres depth. The first holes probed below the planned pit while later holes tested for lateral depth expansion.

Many of the 22 holes drilled in the program to date returned lengthy intercepts, ranging from 400 metres to more than 1 km. Imperial also learned that the Red Chris deposit changes with depth, displaying increased gold-to-copper ratios, increased bornite occurrence, and decreased pyrite content.

With drills pulling long, well-mineralized intercepts the resource at Red Chris was bound to increase, but the extent of the increase is astonishing. Using a cut-off grade of 0.3% copper, Red Chris now boasts 312.6 million measured and indicated tonnes grading 0.54% copper and 0.55 gram gold, containing 3.7 billion lbs. copper and 5.6 million oz. gold. Inferred resources add 237.7 million tonnes averaging 0.46% copper and 0.5 gram gold, for another 2.4 billion lbs. copper and 3.8 million oz. gold.

Compared to the last resources estimate, which was completed in 2005, the new estimate represents a 31% increase in tonnage in the measured and indicated categories and a 89% increase in terms on inferred tonnes. Grades for both metals have also improved: for the measured and indicated tonnes the copper grade increased from 0.46% to 0.54% and the gold grade rose from 0.37 to 0.55 gram gold.

Not only are the grades increasing with depth at Red Chris but it appears that the ease of recovering metals from the Red Chris rocks also increases with depth. In the first metallurgical assessment of core from the deposit’s new deep zone two samples – one with a high gold-to-copper ratio and the other carrying significant bornite – produced better recovery rates than had previous shallow samples from the East zone. The high gold-to-copper ratio sample some 96% of the copper and 88% of the gold in the sample reported to the appropriate concentrate. With the high bornite sample, flotation testing recovered 90% of the copper and 75% of the gold.

The testwork employed the flowsheet previously developed for Red Chris, which was designed for ores with higher pyrite grades. Imperial says the new information might allow an optimization of the flowsheet: “Adopting coarser primary and regrinding sizes and lower pulp pH could reduce costs, with negligible effect on metallurgical performance,” the company wrote in a statement.

While it may seem odd that Imperial Metals only managed to complete 22 holes at Red Chris since the last estimate five years ago, the company has been anything but neglecting the project. On the contrary, Imperial piled significant time and effort into a drawn-out court case over the validity of the project’s federal environmental assessment certificate.

The company submitted a project description to the B.C. Environmental Assessment Office in 2003 and, following a two-year process that included public consultation, was awarded a provincial environmental assessment certificate in 2005.

In mid-2006, a federal screening process concluded Red Chris was not likely to cause significant adverse environmental effects and the responsible authorities decided the project could proceed. But Mining Watch Canada challenged the decision, arguing the federal government did not have the authority to assess a project using only a screening level review instead of using a comprehensive process.

The legal battle stretched for more than three years, with a final decision reached in January. In its decision the Federal Supreme Court decided the government indeed does not have the authority to re-scope projects in that manner but, given the lack of environmental issues with respect to Red Chris and given that Imperial acted in good faith throughout the flawed process, awarded Imperial an exemption to the ruling. The end result is that Imperial now holds valid provincial and federal environmental assessments for Red Chris, which prompted the company to revitalize its efforts at the site.

Imperial currently has three drill rigs turning at Red Chris and says a fourth rig is on its way to the project. The company says it is working to update the 2005 feasibility study. The project is located near Iskut in northwest B.C., 310 km from tidewater at the port of Stewart. Access from pavement at Highway 37 is 6 km along a forest service road followed by 17 km along the Red Chris access trail.

On news of the new Red Chris resource, Imperial Metals’ share price gained 64¢ to reach $20.36, near its 52-week high of $21. Last summer the company’s shares traded as low as $3.21. Imperial has 36 million shares outstanding.