Sustut gets a boost

Vancouver A newly completed resource estimate has enhanced the economic potential of the Sustut copper deposit some 65 km north of the Kemess gold-copper mine in north-central British Columbia.

Partners Northgate Exploration (NGX-T), Doublestar Resources (DSR-V) and privately owned Procon Mining & Tunneling engaged consulting firm Pincock Allen Holt to complete the study based on the latest drill results.

The Southeast zone now tallies a resource of about 5.3 million tonnes grading 1.87% copper, based on a cutoff grade of 0.7% copper. Of this amount, 3.6 million tonnes grading 1.88% copper are classified as measured, and 1.5 million tonnes averaging 1.88% copper are indicated and 121,000 tonnes grading 1.78% copper are inferred.

The Southwest zone adds another 2.67 million tonnes grading 1.32% copper. Of this amount, 1.26 million tonnes grading 1.38% copper lies in the measured category, 1.26 million tonnes grading 1.28% copper lie in the indicated section and 179,000 tonnes averaging 1.2% copper sit in the inferred category.

The study gives the project 21% more mineable copper (25% at a 0.65% copper cut-off grade) than the 2002 estimate, which used only the results from the Southeast zone.

In early 2002, Doublestar formed a strategic alliance with Northgate and Procon paving the way for a $300,000 feasibility study, which is due for completion by March. The partnership envisions Procon conducting mining operations, Northgate treating the ore at its Kemess mine, and Doublestar and Northgate equally sharing the profit attributable to the project.

Kemess is a 50,000-tonne-per-day operation, with reserves (at the Kemess South deposit) pegged at 145.9 million tonnes grading 0.65 gram gold and 0.24% copper. Last year, the mine posted record production cranking out 282,300 oz of gold and 72.9 million lbs. of copper. For 2003, the operation expects to treat 18.4 million tonnes of ore yielding 294,000 oz of gold and 77.5 million lbs. of copper. Metallurgical recoveries are slated to come in at 71.5% for gold and 82.5% for copper.

The Sustut material would increase Kemess’s copper production by 40%, as well as increase the grade of the concentrate, improve the quality of tailings, and reduce the amount of steel required in the semi-autogenous mills.

Environmentally, the Sustut material is acid-consuming and appears not to leach metals into the environment.Initial scoping studies point to a capital cost in the range of $12-14 million. Based on a copper price of US90 per lb., the project’s internal rate of return would be 69%.

A tabular, volcanic redbed deposit, Sustut was discovered by Falconbridge (FL-T)in the early 1970s. Three deposits mineable by open-pit methods were defined, and the total resource was estimated to be 43.5 million tonnes grading 0.81% copper at a cutoff grade of 0.4% copper. In 1999, Doublestar acquired 13 mineral projects, including Sustut, from Falconbridge in return for $500,000 and 1.5 million shares plus 500,000 warrants.