Duck Pond feasibility study tabled

Partners Thundermin Resources (THR-T) and Queenston Mining (QMI-T) have tabled the results of a detailed feasibility study on their Duck Pond copper-zinc project in central Newfoundland.

The study envisages a production rate of 1,500 tonnes per day over a 10.2-year mine life.

Initially, open-pit mining would target the Boundary deposit. Boundary’s ore would be trucked 4 km to a concentrator to be constructed near the Duck Pond deposit.

In the second year, underground mining would commence at the Duck Pond deposit, where drift and fill mining would employ trackless mechanized equipment. About 55% of tailings would be directed to the fill operation and the rest would submersed.

Ore would be processed using differential flotation to produce copper and zinc concentrates. Recovery rates for copper and zinc are pegged at 83.1% and 84.4%, respectively. Copper concentrates are expected to bear 24.1% copper, 134 grams silver and 1 gram gold per tonne. Zinc concentrates are expected to contain 56% zinc, 78 grams silver and 0.6 gram gold.

Annually, the mine would produce about 32 million lbs. copper, 60 million lbs. zinc, 2,100 oz. gold and 400,000 oz. silver in concentrate. Over its life, production would total 616,000 tonnes copper concentrate and 483,000 tonnes zinc concentrate.

The total pre-production capital necessary to bring the Boundary deposit to commercial production is pegged at $79.6 million, including an 11% contingency. Mine and mill construction would take between 18 and 20 months from the time of production decision. Another $11.3 million would be required for underground mine development of the Duck Pond deposit. That cost would be partially offset by $22 million in production revenue from Boundary.

Cash costs over the life of the mine are expected to ring in at $42 per tonne. Cash production costs (net of byproduct credits) are estimated at US32 per lb. copper.

At full steam, 166 people (44 staff and 122 hourly employees) would operate the mine. Another 15 contractors would perform underground development, diamond drilling, road maintenance and concentrate haulage.

Under the base case, the project’s after-tax internal rate of return is 18% and the net present value, at a 7.5% discount rate, is $44.5 million. Cash flow is $118.3 million and the payback period is 4.3 years. The study projected 10-year average metal prices of US95 per lb. copper, US50 per lb. zinc, US20 per lb. lead, US$5 per oz. silver and US$275 per oz. gold.

In the study, MRDI Canada pegged the project’s proven and probable reserves in the Duck Pond and Boundary deposits at 5.2 million tonnes grading 3.3% copper, 5.8% zinc, 0.9% lead, 59 grams silver and 0.8 gram gold. Another 1.1 million tonnes of material grading 2.6% copper, 5.6% zinc, 1.2% lead, 58 grams silver and 0.6 gram gold lie in the inferred category at the Duck Pond deposit. The mining plan included the proven and probable mineral reserves at the Duck Pond and Boundary deposits and another 269,300 tonnes of inferred mineral resources from Duck Pond grading.

The partners plan to pursue final environmental permitting and project financing. An environmental impact statement will be filed shortly.