Canarc Resource (TSE) is proceeding with a $5-million feasibility study on its fully owned Polaris-Taku gold project in northwestern British Columbia, following a positive assessment of the project’s economics.
The deposit contains a geological resource of 2.6 million tons grading 0.43 oz. gold per ton, based on a 0.2 oz. cutoff grade. The ore is refractory and contained within three main vein systems — AB, Y and C.
During 1995, Canarc further tested the C vein system at depth and successfully intersected multiple high-grade veins up to half a mile deep (more than doubling the known depth).
The significance of the 1995 drilling is that reserves could increase twofold.
Polaris-Taku is 40 miles northeast of Juneau, Alaska, near the Tulsequah River. From 1938 to 1951, a high-grade underground operation produced 231,000 oz. Canarc acquired the 2,100-acre property in 1991 and has since focused on drilling below and beyond the old mine workings.
The company intends to reopen the former producer in June, dewater the underground workings and carry out 4,000 ft. of drifting and 150,000 ft. of drilling. The work will be aimed at proving up part of the contained resource of 1.1 million oz. gold.
A technical review by Fluor Daniel Wright assessed the economics of a 750-ton-per-day operation that employs on-site autoclave processing. It is estimated that yearly output of 90,000 oz. over a mine life of 10 years and at an operating cost of US$200-240 per oz. would generate gross revenue of US$346 million. Pretax operating profit is estimated at US$137 million.
The evaluation assumes a mine dilution factor of 17%, a head grade of 0.35-0.4 oz. and a 90-95% gold recovery rate. These figures are based on a gold price of US$389 per oz. and an exchange rate of $0.73. The capital cost of the project is estimated at US$47 million with a payback period of 3.3 years.
Increasing plant capacity is just one of several ways the overall economics of the project can be improved. The feasibility of a 1,200-ton-per-day operation will be considered, based on an updated reserve estimate.
In the meantime, engineering, metallurgical and environmental studies are in progress, and a final prefeasibility study is expected by May. Canarc intends to apply for a mine development certificate as early as June.
To secure financing for underground development, Canarc is involved in ongoing discussions with various major companies interested in forming a joint venture.
The company has 29.8 million shares outstanding and working capital of $6.5 million.
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