Vancouver — The government of British Columbia has finally issued a project approval certificate to
The approval, which follows 15 years of exploration and research as well as an 8-year environmental assessment review process, represents the culmination of the most exhaustive mine development review and permitting process ever undertaken in British Columbia.
The 150-sq.-km property consists of two past producing underground mines, Tulsequah Chief and Big Bull, which lie alongside the Tulsequah River, 100 km south of the town of Atlin, B.C., and 65 km northeast of Juneau, Alaska.
The base and precious metals project has sat idle since June 2000, when the original project approval certificate was rescinded. The certificate provides the company with the authority to apply for and obtain specific operating permits required for construction, development and operation. Tulsequah originally received such a certificate in March 1998, after a 3.5-year environmental assessment review under the former New Democratic Party government. Subsequent litigation by the local Taku River Tlingit First Nation resulted in a decision by the British Columbia Supreme Court to quash the certificate on the basis of deemed procedural errors. The court ruled that the company had failed to consult adequately with the Taku River Tlingit First Nation, which maintains that the site is on its historic territory.
The province’s Court of Appeal later determined there had been no procedural errors and ordered the project remitted once again to the government for decision on a new certificate, including consideration of the potential for impact on the asserted rights and title of the First Nation.
The fate of the document had been in the hands of the provincial government since late May. Under the guidelines of the Environmental Assessment Act, the Ministry of Energy and Mines and the Ministry of Sustainable Resource Management had 45 days in which to render a decision. The decision was finally made after 196 days.
The ministries have now stated that the project can be constructed, operated and closed in a manner that minimizes the impact on the environment and accommodates the concerns and asserted rights of the Tlingits.
“The mineral exploration sector has been eagerly awaiting a clear indication that investment in exploration and the subsequent discovery of mineral deposits can lead to the government’s approving the responsible development of mines in British Columbia,” says Shari Gardiner, president of the British Columbia & Yukon Chamber of Mines.
Annual investment in mineral exploration reached a historic low of $25 million in 1999. Despite recent improvements, the Chamber of Mines reports investment is still well below the $100-million threshold required to sustain the province’s mining industry.
“There are only 13 operating mines left in the province,” says Gary Livingstone, president of the Mining Association of British Columbia. “Yet those 13 mines, along with our two refiners, generate more than $4 billion in annual revenue. The addition of just one new mine, like Tulsequah Chief, can have a large influence on the overall contribution the industry is able to make to British Columbia.”
Development of Tulsequah Chief will bring an estimated $150 million of capital investment, 260 direct high-paying jobs, and 550 indirect and induced jobs to a depressed region of the province.
To date, Redfern Resources, the wholly owned subsidiary of Redcorp Ventures, has spent almost $30 million defining the deposit and designing a re-development plan that meets the environmental standards for mining in the province.
Taku River
Critics of the project believe the mine is a threat to the Taku River, which is a source of a commercial salmon fishery worth $2.7 million a year to Alaskans. Acid rock drainage is a problem related to the previous mining activities in the 1950s. Acid generated from surface and underground mine wastes is contributing to the discharge of unacceptable levels of certain metals (primarily copper) into the river. A preliminary rehabilitation plan was outlined in a 1992 environmental assessment of the project by SRK Consulting, and its conclusions and recommendations were accepted in principle by the province’s Ministry of the Environment, Lands and Parks. The ministry agreed to delay implementation of the remediation plan pending review of Redfern’s application for a project approval certificate.
As part of the proposed operating plan, Redfern will apply for a reclamation permit, which will specify the remediation process over the mine life and during closure and abandonment. In late 1998, Environment Canada warned Redfern about violations to the Fisheries Act with respect to the untreated minewater drainage. Redfern conducted some interim mitigation at the Tulsequah site in 1999 and 2000 while waiting to proceed with full mine development.
Other critics argue that development of a 162-km-long access road poses a danger to wildlife by allowing people an easier route into the wilderness. In response, Redfern has agreed to limit public access to the road and prohibit hunting in the right of way.
With the approval certificate now in hand, Redfern plans to carry out drilling in an attempt to expand the known resource by targeting possible extensions of the deposit. Data from this work will be used to revise the resource and reserve estimates to comply with current standards. Redfern is currently investigating various avenues for funding the work, including discussions with potential partners.
Tulsequah Chief is a past producer of gold, silver, copper and zinc. It hosts a reserve of about 7.6 million tonnes grading 6.63% zinc, 1.31% copper and 1.24% lead, plus 105.2 grams silver and 2.51 grams gold per tonne. These calcuations were made in 1997.
1995 feasibility
Based on the previous feasibility study, completed in December 1995 by Rescan Engineering, Redfern envisages a 2,470-tonne-per-day (900,000-tonne-per-year) underground mining and milling operation capable of producing a gold-rich gravity concentrate as well as zinc, lead and copper concentrates. The study used metal prices of US53 per lb. zinc, US25 per lb. lead, US90 per lb. copper, US$300 per oz. gold and US$5.80 per oz. silver. These prices projected a 3.6-year payback and annual operating profits of $50 million. Zinc production accounts for half the project’s projected revenue.
It is not clear how today’s metal prices affect the project’s economic potential. The spot price of zinc is currently hovering at US37 per lb.
Average annual production of payable metals is forecast to be 52,620 tonnes zinc, 4,990 tonnes lead and 10,430 tonnes copper, plus 59,000 oz. gold and 2.4 million oz. silver.
Total recoveries are expected to average 96% for zinc, 91% for lead, 92% for copper, 87% for silver and 85% for gold. About 29% of the gold is recoverable to a high-grade gravity concentrate.
The two mines, Tulsequah Chief and Big Bull, were operated by Cominco between 1951 and 1957. During those years, the mines produced a a total of 936,000 tonnes of ore before closing as a result of depressed metal prices. The ore was transported across the Tulsequah River and processed in a leased mill at the nearby Polaris-Taku gold mine, which operated from 1937 to 1951. Polaris-Taku closed just as Cominco was starting up.
Both past-producing mines are precious-metal-rich volcanogenic massive sulphide deposits associated with Mississippian-age felsic rocks. The Tulsequah deposit remains open at depth, as well as laterally, and there is excellent potential for the discovery of new deposits on the property. The Big Bull mine has seen only limited exploration drilling since it shut down in 1956. There has been no significant exploration or drilling anywhere on the 150-sq.-km property since permitting began, in 1994.
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