Coal And Copper Boost BC

Mining has been an integral part of British Columbia’s economy for more than 150 years. The industry was a strong performer again in 2009 with value of solid mineral production of about $5.7 billion from eight metal mines, nine coal mines and numerous industrial minerals and aggregate quarries. Coal is the province’s most valuable solid mineral product, accounting for nearly $3 billion, followed by copper, industrial minerals, aggregates, gold, molybdenum and other metals such as zinc. The coal fields of the southeast lead the coal production, but coal mines and development projects are also found in the northeast and on Vancouver Island. Porphyry deposits are the source of most of the province’s metal production with most of the current production from B.C.’s central regions

Exploration spending in 2009 is estimated at $154 million, well below 2007 and 2008 levels. However, rising commodities prices led to an increase in activity late in the year and some notable exploration successes, so that 2010 began on a positive note. More than 20 mineral discoveries were reported around the province. As well, a number of mine development projects advanced, including expansion projects at operating mines and construction at Copper Mountain and New Afton. In 2009, there were 23 projects in the environmental assessment (EA) review process, another seven in the mine permitting process and six under development. In 2009, there were 88 major exploration projects out of a total of more than 350 projects. B.C.’s regional geologists monitor this activity and advise clients on the many opportunities to find mineral resources in the province. This article highlights some of the most significant projects. For more information, check out the British Columbia Mines and Mineral Exploration Overview 2009 at www.empr.gov.bc.ca/Geology .

The northwestern region of the province hosts a number of very large undeveloped and developing deposits. Among these is the Sulphurets gold camp, where the global resource continues to expand. The largest exploration project in the province in 2009 was at the Snowfield property, where Silver Standard Resources mobilized seven drills in a resource definition program. Measured and indicated resources at Snowfield North increased to 861.7 million tonnes at 0.7 gram gold per tonne, 0.12% copper and 92 ppm molybdenum. Work at Seabridge Gold’s Kerr-Sulphurets- Mitchell (KSM) property, located immediately west of Snowfield, consisted of infill drilling, engineering and baseline environmental studies. The measured and indicated resource now stands at more than 2.1 billion tonnes grading 0.57 gram gold and 0.21% copper. A preliminary feasibility study is in progress. At the nearby Brucejack project (southeast of KSM), Silver Standard now has a measured and indicated resource of 120.5 million tonnes averaging 1.04 grams gold per tonne and 16.9 grams silver.

Also in the northwest, exploration at Imperial Metals’ Red Chris copper-gold project included deep drilling below a proposed open pit. Impressive results follow 2007 successes with the highest-grade intercept to date 4.12% copper and 8.83 grams gold per tonne over 152.5 metres. These higher-grade intersections are drawing attention internationally as exploration companies are starting to think about the potential to mine porphyry deposits underground in B.C. The overlying proposed open- pit mine has provincial and federal environmental assessment certificates for a 30,000-tonne-per-day operation.

The northeastern coal fields continued their resurgence with more than $20 million in exploration spending, marginally lower than 2008. One of the active projects was Goodrich Central South, where First Coal Corp. began excavation for a 100,000-tonne bulk sample using a modified Addcar system. The metallurgical coal resource is estimated at about 41 million measured and indicated tonnes and 32 million inferred tonnes.

Also in the northeast, Peace River Coal conducted a large drill program at Roman Mountain. That deposit would supplement production at the Trend mine. The Trend mine extension also saw a significant program in 2009. Western Canadian Coal Corp. continued work at the Wolverine project (Perry Creek mine) in an on-lease drill program designed to supplement reserves and extend the mine life. Canadian Dehua International Mines Group conducted definition drilling at its Gething coal project, a proposed underground operation.

In the central part of the province, porphyry copper projects included Serengeti Resources’ Kwanika project. Drilling from 2006 to 2009 has resulted in an inferred resource at the Kwanika South zone of 129.1 million tonnes averaging 0.3% copper, 0.09 gram gold per tonne, 1.76 grams silver and 0.01% molybdenum. This is separate from the Central zone, which has an indicated resource of 183 million tonnes at 0.29% copper and 0.2 gram gold.

Southwest of Vanderhoof, Richfield Ventures drilled its Blackwater- Davidson property, confirming a bulk-tonnage gold target. Among the highlights was a 329-metre interval of 1.25 grams gold.

In the Cariboo region, Spanish Mountain Gold (formerly Skygold Ventures) conducted infill drilling on the main zone at Spanish Mountain, a sediment-hosted gold system. The company also tested regional targets. Early in the year it announced a measured and indicated resource of 102.26 million tonnes averaging 0.785 gram gold. East of Williams Lake, Gold Fields Horsefly Exploration drilled the Woodjam North project, which returned up to 101 metres of 0.58 gram gold and 0.43% copper.

Farther east, Commerce Resources continued work at its Blue River tantalum-niobium project. The Upper Fir carbonatite has an indicated resource of 7.38 million tonnes averaging 217 grams Ta2O5 per tonne and 1,202 grams Nb205 at a 175 grams Ta2O5 per tonne cutoff. This does not incorporate results of 2009 drilling. A preliminary economic evaluation is under way. Rare earth elements attracted attention elsewhere along the Rocky Mountain Trench. Among the other carbonatites investigated in 2009 was the Wicheeda rare earths project northeast of Prince George, a 2008 discovery owned by Spectrum Mining.

To the south, the Ruddock Creek zinc-lead project, now owned by Imperial Metals, entered the provincial environmental assessment process late in 2008. A 2009 resource estimate stands at 2.3 million indicated tonnes grading 7.8% zinc and 1.6% lead, plus 1.5 million inferred tonnes at slightly lower grades.

In the province’s southwest, Bralorne Gold Mines discovered three new veins and delineated extensions to the BK zone and Alhambra veins at the past-producing Bralorne mine.

Near Kamloops, Abacus Mining & Exploration completed a positive scoping study of a 60,000-tonne-per- day operation at the Ajax copper gold porphyry. A drill program began late in the year on the Ajax East Extension, a near-surface copper-gold-rich zone. The objective was to upgrade an 80-million-tonne inferred resource for addition to the measured and indicated resource of 442 million tonnes grading 0.3% copper and 0.19 gram gold at the main Ajax deposit.

The largest program on Vancouver Island in 2009 was the Raven coal project, operated jointly by majority partner Compliance Energy with Itochu Corp. and LG International. They carried out a drill program to upgrade a 59-million-tonne inferred resource (Raven already hosts 39 million measured and indicated tonnes) and began baseline environmental and feasibility studies. Another major project was Bitterroot Resources’ drilling and bulk-sampling program on the Min
eral Creek gold project, near Port Alberni. Delineation of a high-grade vein discovered in 2008 was a focus. Drilling on the Port Renfrew area Pearson iron project by Pacific Iron Ore Corp. was designed to expand an existing resource and test new targets.

The Kootenay region was active with a number of metals exploration projects in addition to large coal development projects (discussed below). Sultan Minerals continues to explore the Jersey-Emerald property, which includes past-producing tungsten skarn and lead-zinc replacement deposits as well as porphyry molybdenum mineralization. A resource estimate released in 2009 reports 2.72 million measured and indicated tonnes at 0.358% WO3.

Anglo Swiss Resources was active at the Kenville mine, a past-producer of gold and silver, with underground and surface drilling. The company has a new resource estimate at part of the former mine, and continues to explore for vein extensions, new vein systems and deeper source zones.

Development projects

Three proposed mine projects entered the environmental assessment process in 2009: the Line Creek Phase II Expansion project (coal mine expansion in the Elk Valley) the Raven coal project on Vancouver Island and the Chu molybdenum project near Vanderhoof. The Mount Milligan copper-gold mine project received provincial and federal environmental approvals, the Prosperity copper- gold project received a provincial EA certificate and construction progressed at New Afton and Copper Mountain.

In the northwest, the permitting process continues at KSM. Seabridge received an order indicating the scope of the required environmental assessment. A recent Supreme Court decision indicates the Red Chris project can proceed with its existing federal environmental approval. Avanti Mining Corp. received a positive preliminary feasibility for the Kitsault molybdenum project. Development of the Galore Creek copper-gold mine remains on hold pending a redesign of the project, but construction of its access road continued in 2009.

In central B.C., Terrane Metals updated the feasibility study for its Mount Milligan project, which now has provincial and federal environmental assessment certificates for a 60,000-tonne-per-day open-pit mine. Proven and probable reserves are 482 million tonnes averaging 0.2% copper and 0.39 gram gold per tonne. Terrane is proceeding with construction, with capital costs estimated at $915 million.

Taseko Mines received a provincial EA certificate for its proposed Prosperity mine in early 2010 and is still involved in the federal process. Prosperity has proven and probable reserves totalling 831 million tonnes averaging 0.23% copper and 0.41 gram gold per tonne.

In south-central B.C., Copper Mountain Mining began pouring foundations for the mill building at its Copper Mountain mine, a copper- gold porphyry deposit. It has also ordered mining equipment. Preproduction mining is scheduled to start in 2010. In 2009, Mitsubishi Materials acquired a 25% stake in Copper Mountain Mining, arranged loan financing and negotiated a 10-year purchase agreement for the concentrates.

Also under construction is the New Afton copper-gold mine of New Gold. The mill building is complete and some components installed. Most of the 2009 development work was underground, including development drifts and the conveyor decline. Production is scheduled for 2012.

Mine expansions

Several mine expansion projects that had been temporarily halted resumed in 2009, including a major expansion of the Endako open-pit molybdenum mine, owned by Thompson Creek Metals (75%) and Sojitz Corp. (25%). The project will increase the capacity of the mill to 50,000 tonnes per day from 28,000 tonnes.

The Huckleberry porphyry copper- molybdenum mine has extended its mine life to 2012. Huckleberry is owned by Imperial Metals and a consortium of Japanese companies.

Taseko Mines is expanding and modernizing the Gibraltar copper- molybdenum open-pit operation. The new milling rate is 49,000 tonnes per day. Late in the year, the company announced an agreement to sell 25% of the mine to Sojitz Corp.

Highland Valley Copper, a partnership of Teck Resources (97.5%) and Highmont Mining, has been carrying out a $300-million development project to extend the life of its mine near Logan Lake to 2019. Preproduction stripping is to continue for several years. A study is looking at extending Canada’s largest copper mine beyond the current 2019 mine plan.

In the southeastern coalfields, Teck Coal conducted an infill drill program at the Mount Michael property, part of the second-phase expansion of the company’s Line Creek operations. The expansion is intended to replace reserves. Teck drilled at its Elkview Operations (Baldy Ridge and Natal Ridge) to expand reserves.

Roca Mines applied to expand production at the underground MAX molybdenum mine to 1,000 tonnes per day. MAX currently exploits a high-grade resource within a 42.9-million- tonne measured and indicated resource grading 0.2% MoS2.

B.C. supports the mineral industry

A centre of excellence has developed alongside B.C.’s rich natural resources. Its mining industry has ready access to engineering and consulting firms, geoscientists, mine and mill workers, legal advisers, health and safety providers, academic institutions and an extensive collection of publicly available geoscience data. Vancouver is one of the world’s major mining centres, with more than 700 mineral exploration and mining company offices, many with projects worldwide.

The provincial government has taken recent steps to support the industry. Provincial and federal governments are committed to sharing the cost of a proposed Northwest Transmission Line along Highway 37, which would bring the 287-kilovolt power grid closer to a number of development projects in the northwest. Private sector funding is also anticipated. The Crown corporation responsible for the line has applied for an environmental assessment certificate.

The province intends to introduce legislation to extend the BC Mining Flow-Through Share Tax Credit for another three years to 2013. The credit was introduced in B.C. in 2001, paralleling a federal program. The province extended both the Mining Exploration Tax Credit and the New Mine Allowance through 2016. Companies can access a refundable mineral exploration tax credit of an additional 10% in prescribed areas affected by the Mountain Pine Beetle. The province has very competitive corporate tax rates at 11%, no corporation capital tax, and no sales tax on machinery and equipment. The corporate tax rate will be further reduced to 10.5% in 2010.

International investors continue to demonstrate interest and confidence in the province’s resources and talent. The largest example was China Investment Corp.’s $1.7-billion purchase of a 17% stake in Teck Resources in 2009. Other key deals include Mitsubishi’s stake in Copper Mountain and Itochu and LG in the Raven coal project. In both cases, the partners provided capital that allowed the projects to advance in 2009.

Ministry of Energy, Mines and Petroleum Resources staff work with companies, industry associations and other government agencies to attract Asian companies seeking investment and partnership opportunities to B.C. and to co-ordinate matchmaking with foreign delegations. For example, the ministry helps the mineral industry by distributing standardized company profiles and assists and publishes various brochures and documents in Asian languages. For the last four years, the ministry has sponsored Asia investment missions to coincide with the China Mining Congress.

That the mineral industry remains an economic leader in B.C. is due largely to the capability and persistence of t
he provincial mining community. Above all, the authors wish to recognize the work of its individuals in developing B.C.’s mineral wealth.