Mining operations at Faro, Y.T., date back to the late 1960s, and, as a result, a significant amount of tailings and waste dump material has accumulated.
Drainage water within the disturbed area is currently collected and run through a water treatment facility to remove solids and metals, and increase the acid or alkaline content (pH).
Kurt Forgaard, president of Anvil Range Mining (TSE), the mine’s current operator, says government studies have pegged the clean-up cost at about $80 million. This will be primarily directed at the estimated 50-60 million tonnes of old tailings. Forgaard adds that he expects the cost to be less, and the company is reviewing several options along these lines.
Tailings from the current milling operation are being pumped into the mined-out Faro pit, which is adjacent to the mill.
As part of the purchase, Anvil entered into a Reclamation Security Agreement (RSA) with the Department of Indian Affairs and Northern Development. The agreement establishes a sliding-scale royalty to fund future reclamation. The royalty starts at 0.5% when zinc reaches US50 cents per lb. and increases by 0.5% increments to 3% when zinc reaches US55 cents per lb.
If zinc trades above US70 cents per lb. during the first six years of production, the royalty under the RSA increases to 4%. Contributions under the RSA are capped at $100 million.
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