Vancouver — After years of trying to bring the Tulsequah polymetallic mine back into production,
Redcorp told engineering firms Hatch and AMEC Americas to curtail further work on an updated feasibility after early signs pointed to increased capital and operating costs, in addition to a recently downgraded resource estimate.
The surprise move had investors scrambling as the company’s shares plummeted more than 42% on heavy volume following the announcement in late May. A few days later, Michael Kenyon, the company’s president and CEO, announced he was stepping aside after 26 years with the company.
Tulsequah is situated 100 km south of Atlin in northwestern British Columbia. The initial feasibility study proposed a 2,500-tonne-per-day underground mine, mill and flotation processing plant producing a gold-rich gravity concentrate as well as zinc, lead and copper concentrates.
The recent resource estimate conducted by AMEC Americas in February was based on a net smelter return cutoff of $10 per tonne. The calculation used optimistic metal prices of US$1.40 per lb. copper, US40 lead, US57 zinc; with US$420 per oz. gold and US$6 silver.
AMEC pegged the massive sulphide deposit at 5.38 million tonnes grading, 6.73% zinc, 1.41% copper, 1.32% lead, 2.73 grams gold and 100.8 grams silver per tonne, in compliance with National Instrument 43-101. Inferred resources stand at 1.5 million tonnes grading 1.13% copper, 1.07% lead, 5.44% zinc, 85.1 grams silver and 2.23 grams gold per tonne.
A previous resource calculation, conducted in 1997, estimated Tulsequah at 7.6 million tonnes grading 6.63% zinc, 1.31% copper, 1.24% lead, 105.2 grams silver and 2.51 grams gold per tonne.
Redcorp says it’s considering expanding the resource base or finding ways to cut capital and operating costs.
The project has been fraught with obstacles since Redcorp received its mining approval certificate from the B.C. government in 1998. Many of the problems centered on native issues, most of which appeared to have been settled.
In November 2004, the Supreme Court of Canada declared the government of B.C. had adequately consulted and accommodated the Taku River Tlingit First Nation before providing Redfern Resources, a wholly owned subsidiary of Redcorp, a mining approval certificate.
The Tlingit had complained that there was not proper consultation during the approval process. Concerns centred on the construction of a 160-km access road from the mine to the town of Atlin over traditional fishing and hunting land. The British Columbia Court of Appeals had earlier sided with the Tlingit and ruled that the province had failed to meet its duty to consult with, and accommodate, the First Nation.
The 160-sq.-km property, which last saw production in the 1950s, was acquired from
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