BC’s miners and explorers recovered from recession to keep industry ticking in 2009

Vancouver – The global economic downturn pulled the value of British Columbia’s mining and exploration down in 2009 from the lofty heights it reached in 2008 but the sector remains strong, with eight metal mines and nine coal mines in operation and 88 significant exploration projects in the works.

Bruce Madu, regional geologist for South Central B.C., was upbeat as he addressed the crowds in the speaker hall at the Mineral Exploration Roundup in Vancouver. In his overview of mines and mineral exploration in B.C. in 2009, Madu emphasized that B.C. remains Canada’s largest producer of copper, the country’s only producer of molybdenum, and its largest exporter of coal. Despite falling metal prices early in the year, only one mine – the QR gold mine near Barkerville – ceased operations.

Expansion plans as several major B.C. mines were delayed as the recession rocked the mining world, but have since gotten underway. Thompson Creek Metals (TCM-T) resumed its expansion work at the Endako molybdenum mine, Taseko Mines (TKO-T) continued expanding its Gibraltar copper-molybdenum operation, and the Highland Valley Copper mine, majority-owned by Teck Resources (TCK.B-T, TCK-N), invested $120 million in expansion studies. The Gibraltar expansion should increase copper production by 50% by milling almost 50,000 tonne of ore daily.

Teck, which operates half of the province’s coal mines, also anticipates an increase in coal production in 2010.

Other mines added new reserves to extend their active lives. At the Huckleberry porphyry copper mine in west-central B.C., which is co-owned by Imperial Metals (III-T) and a Japanese consortium, drilling identifies sufficient reserves to extend the mine’s life to 2012, an addition of two years. Imperial also operates the Mount Polley copper-gold mine near Williams Lake, where reserves are expected to last until 2015, but exploration drilling of late has identified deep, higher-grade mineralization that will be considered within an underground mining scenario.

In total, the province’s mineral production in 2009 was valued at $5.7 billion. Retaining the same ranking as in recent years, coal was the most important product by value, followed by copper and then molybdenum. Some 21.7 million tonnes of coal, most of it metallurgical, was produced in the last year.

Exploration spending was down from the soaring heights it reached in 2008, totalling $154 million compared to a record-breaking $367 million a year prior, but still ranked sixth in terms of provincial exploration spending in the last 20 years.

There are some 22 projects currently under consideration for mine development, of which eight are coal properties and the rest metal. Some of the biggest are Galore Creek, the Teck-NovaGold Resources (NG-T) joint venture where construction was halted when capital costs more than doubled to $5 billion; Imperial Metals’ Red Chris project, where deep drilling results look set to increase the already-sizeable resource significantly; the Schaft Creek porphyry copper project of Copper Fox Metals (CUU-V), which remains in the early stages of an environmental assessment for a 100,000-tonne-per-day operation; and Seabridge Gold’s (SEA-T) KSM project, home to the biggest gold deposit ever found in Canada, which is advancing towards a prefeasibility study. And Taseko Mines received a provincial environmental green light to develop its Prosperity project shortly after boosting its reserve base significantly. Federal approval is still needed.

Development work is already underway at the New Afton mine near Kamloops, under the guidance of New Gold (NGD-T). The underground gold operation should be in production by 2012; the mill building is complete, the underground development is progressing well, and the conveyor to the deposit is more than half built. In central B.C. Terrane Metals (TRX-V) updated the feasibility study for its Mount Milligan project and now has in hand all needed permits to start development of a 60,000-tonne-per-day operation.

To even touch on all of the interesting exploration project in B.C. would take pages of type. According to the Ministry of Energy, Mines, and Petroleum Resources there were 23 mineral discoveries in 2009 and there are hundreds being explored. Hard Creek Nickel (HNC-T) is expected to update the resource at its massive Tournagain nickel project in the province’s northwest shortly. Silver Standard Resources (SSO-T) continues to grow the resources at its Snowfield project, which is adjacent to Seabridge’s KSM project. Bravo Venture Group (BVG-T) drilled 13,000 metres into its Homestake Ridge gold discovery.

A regional exploration program by Canada Zinc Metals (CZX-V) resulted in two new sedimentary-exhalative discoveries in the Gunsteel Formation of north-central B.C. In central B.C., Serengeti Resources (SIR-V) upgraded the copper-gold resource at its Kwanika project. Richfield Ventures (RVC-V) acquired the Blackwater-Davidson project on the Nechako plateau and, by interpreting the geology in a new manner, hit some impressive gold intercepts. Skygold Ventures (SKV-V) continues to grow its Spanish Mountain gold project near Williams Lake. Abacus Mining and Exploration (AME-V) completed a preliminary economic assessment of its Ajax property, where the company plans to develop a 60,000-tonne-per-day open pit mine encompassing the former pits of the Afton Mine near Kamloops.

There are many, many other projects worthy of mention. There is insufficient space here, but the Ministry’s new Mines and Mineral Exploration Overview 2009 handbook, which contains a comprehensive round up of mining and exploration in the province, is available at Roundup and online.