Vancouver – The latest resource estimate for Western Keltics Kutcho project in northcentral B.C. is in, boosting the sites resources in advance of a feasibility study due out by year-end.
Kutcho holds three deposits, of which the largest is the namesake. According to the new estimate, Kutcho deposit holds measured and indicated resources of 15.7 million tonnes grading 1.65% copper, 2.15% zinc, 26.13 grams silver per tonne and 0.32 gram gold per tonne.
The other two deposits (Esso and Sumac) are smaller and less thoroughly defined. Esso contains 2 million indicated tonnes of 2.24% copper, 3.96% zinc, 37.7 grams silver, and 0.49 gram gold, and Sumac adds 10.6 million inferred tonnes at 0.94% copper, 1.45% zinc, 13.96 grams silver and 0.14 gram gold.
Estimate updates were based on the results of a Fall-2006, 1,870-metre drill program focused on the eastern end of the main deposit, where the open pit of the proposed mine would start. The resource estimate used a 0.75% copper-equivalent cut-off grade, with equivalent grades based on five-year average metal prices, anticipated recoveries, and average smelter terms.
The Kutcho property, located 100 km east of Dease Lake, covers part of the regional-scale Kutcho Formation. Metals are contained in volcanogenic massive sulphide (VMS) deposits within a 4-km-long, gently plunging linear trend. Unlike most VMS deposits, the Kutcho property deposits have not been broken up by significant folding or faulting, resulting in consistent assay results without the need for tightly-spaced drilling.
A prefeasibility study is already underway, and Western Keltic has initiated the B.C. environmental assessment process.
The property was first discovered in 1968 by Imperial Oil, which later became Esso Minerals Canada. Over the next 40 years various companies took on the project and exploration advanced slowly. In 1985 Imperial Oil, working cooperatively with Sumitomo Metal Mining of Japan, completed a pre-feasibility study. Copper prices were too low for the project to be economical at the time, and plans were dropped.
Western Keltic acquired the project in March 2004. Over the next two years the company explored the property aggressively, releasing an updated resource estimated each January. In June 2006 Keltic closed a $5.8 million private placement, and in February 2007 the company closed a $9.97 million private placement. Keltic said the close-to $10 million raised would be used to complete feasibility studies, mine permitting, and for the purchase of long-lead-time-delivery mining equipment.
Two months later the company explained their spending in more detail, announcing a $4.2 million summer field program to advance Kutcho, including construction of a 40-person camp, 5,000 metres of resource upgrade-drilling, preliminary work for infrastructure development and improvement in the access road, and environmental, fisheries, and archeology studies in support of permitting.
And in mid-April the company announced a letter of understanding with Tahltan Nation Development, a corporation owned 100% by the Tahltan Nation, on whose land the Kutcho property sits. In the letter the parties agreed to discuss a contract for upgrading the sites access road.
According to current plans, the company looks to build a two-million-tonne-per-year mine during 2008 and begin producing in 2009, with annual production of 36,000 tonnes copper and 39,000 tonnes zinc, as well as 42,000 kilograms silver and 340 kilograms gold in concentrates. Metallurgical test work indicates recoveries of 90% for copper and 75% for zinc.
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