Mine expansion approved at Huckleberry

The board of Huckleberry Mines, in which Imperial Metals (III-T) holds a 50% stake and a consortium of Asian companies (Materials Corp., Marubeni Corp., Dowa Mining Co. and Furukawa Co.) owns the remainder, has approved a plan to extend the life of its Huckleberry mine to 2021.

Imperial Metals estimated in a press release that the main zone optimization or MZO plan will have a net present value of $150 million at a discount rate of 8% based on US$3.40 per lb. copper in 2012 and US$3.14 per lb. copper from 2013 to 2021.

The MZO plan is based on the development of a mineral reserve beneath the original main zone pit of 39.7 million tonnes grading 0.343% copper. The strip ratio for the MZO plan, including the Main Zone extension pit, is 1.46 to 1.0. With the implementation of the MZO plan, production from 2011 to 2021 is estimated to be 424 million lbs. copper, with copper production averaging 43.2 million lbs. per year from 2011 to 2019. Production in 2020 and 2021 will be reduced as low grade stockpiles are milled.

From start-up in 1997 to Dec. 31, 2010 aggregate production reached about 870 lbs. copper, 8 million lbs. molybdenum, 105,000 oz. gold and 3.4 million oz. silver.

News of the expansion approval sent shares of Imperial Metals up 3.76% or 47¢ to close at $12.97 on Jan. 3. At presstime in Toronto shares were trading at $12.94 apiece.

In addition to its 50% share in the copper/molybdenum Huckleberry mine near Houston in British Columbia, Imperial Metals owns and operates the Mount Polley open-pit copper/gold mine near Williams Lake. It also owns the large, development-stage Red Chris copper/gold property.

In December the company released the first set of drill holes from the Gully zone, about 1 km to the west of the current pit design at the Red Chris project. The longest mineralized intercept was 807.5 metres grading 0.31% copper and 0.29 gram gold per tonne, including 427.5 metres of 0.39% copper and 0.35 gram gold from hole 477. Drill hole 539 returned 587.1 metres of 0.41% copper and 0.41 gram gold.

The drilling indicates that the mineralized system extends at least 1 km west of the current Red Chris project pit design, the company says, and represents the first significant deep drilling step out from the proposed open pit since Imperial Metals acquired the property in 2007.

The Red Chris project in northwestern British Columbia sits at an elevation of 1,500 metres above sea-level on a plateau with topography and climate favourable to mining operations, Imperial Metals says.