Resources at Northern Dynasty Minerals‘ (NDM-V) Pebble gold-copper project, 380 km southwest of Anchorage, Alaska, have swelled thanks to some 19,948 metres worth of drilling in 59 holes in 2003.
Completed by Norwest Corp., an independent engineering services company, the updated estimate of Pebble’s inferred resource totals 2.74 billion tonnes grading 0.55% copper-equivalent (or 0.3 grams gold per tonne, 0.27% copper and 0.015% molybdenum), based on a cut-off grade of 0.30% copper-equivalent. The estimate also employs 18,353 metres in 110 holes sunk by Cominco American in the early 1990s.
The new resource figure nearly triples the 1 billion tonnes grading 0.3% copper and 0.4 gram gold per tonne (at the same cutoff grade) estimated last March by Australian-based Snowden Mining Industry Consultants.
The new tally represents 16.5 billion lbs. of contained copper and 26.5 million oz. of contained gold, enough to rank Pebble as North America’s largest deposit of contained gold and the continent’s second-largest deposit of contained copper resources, according to Metals Economics Group, a Halifax-based minerals information and consulting company.
Globally, Pebble’s contained gold resource trails only Freeport-McMoRan Copper & Gold‘s (FCX-N) massive Grasberg mine in Indonesia and is a shade shy of Newcrest Mining‘s Telfer gold-copper project in Western Australia.
When the cutoff grade is more than doubled to 0.7% copper-equiv. resources come to 435 million tonnes running 0.49 grams gold, 0.42% copper and 0.021% molybdenum, or 0.84% copper-equiv. Northern Dynasty says that this higher-grade core means a quick payback of capital required to build and operate a large-scale mining operation.
Under Snowden’s previous calculation the high-grade core amounted to 141 million tonnes grading 0.48% copper and 0.67 gram gold per tonne.
Northern Dynasty envisages very low operating costs since mineralization averaging 350 metres in thickness is persistent over a 3-by-2-km area. Waste stripping will be low thanks to just 5-25 metres of gravel overburden. The deposit remains open to the south, west and east under thickening cover.
The latest estimates employ metal prices of US80 per lb. copper, US$350 per oz. of gold and US$4.50 per lb. of molybdenum. Adjustments to account for differences in metal recoveries await definitive metallurgical testing.
The company plans definition drilling followed by a preliminary sizing study and environmental base line measurements in anticipation of the permitting process. The company has also begun work on mine, mill and infrastructure design.
Northern Dynasty can acquire the 36 claims covering the Pebble deposit by paying Teck Cominco US$10 million in cash or stock by Nov. 30, 2004, and purchasing Hunter-Dickinson’s 20% interest in shares at an independently appraised value.
Thereafter, the junior can earn a half-interest in the surrounding property by drilling 18,290 metres before Nov. 30, 2004 (About two-thirds of that is complete). A two-year extension is available at a cost of 100,000 shares per year. Teck Cominco can enter into a 50-50 joint venture on the surrounding property or sell its 50% interest to Northern Dynasty for US$4 million and a 5% net profits interest. Exploration potential is high with the Pebble deposit covering just about 5% of an 89-sq.-km hydrothermal sulphide system on the land package (T.N.M, Jul. 7-13/03).
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