North of 60 Mining News - The mining newspaper for Alaska and Canada's North

Northern Dynasty Ltd., would-be developer of the Pebble project, is convinced that the huge copper-gold mineralization in southwestern Alaska can be accessed and brought to market in an environmentally benign manner that promises economic prosperity for the region.

Part of its confidence stems from Hunter Dickinson Inc., the management team that guides the Canadian junior mining company. Hunter Dickinson has a track record of working to develop successful, modern copper-gold deposits. One such venture is the Kemess South Mine, one of two large copper-gold projects in British Columbia to its credit. The other is the Gibraltar mine.

The Kemess South Mine has achieved success since 2000 under the management of Northgate Exploration Ltd. It is in the mountains of north-central British Columbia and is part of an extensive mineralization about 267 miles northwest of Prince George. Kemess South is a large gold-copper porphyry containing proven reserves of 87 million tonnes. The Kemess mining and milling complex consists of the Kemess South open pit mine and a 52,000 tonnes per day mill.

Kemess origins

Hunter Dickinson is credited with the successful discovery, engineering and permitting to a financing and production decision of the Kemess South Mine. Royal Oak Mines brought the mine to production in 1997, but ran into financial difficulty. Investors acquired the project in 2000 and Northgate took over as owner and operator.

The Kemess South deposit is flat-lying and has uniform gold and copper grades throughout. These characteristics make the ore reserve relatively insensitive to changes in metal prices. The deposit contains three principal types of ore: a primary-sulphide hypogene ore; a copper-enriched secondary sulphide ore; and, an oxidized leach cap ore. Currently, the hypogene ore makes up about 85 percent of the ore body.

Kemess South has a conventional mine plan with 15 meter benches and 45 degree slope angles. Two electric cable shovels, a hydraulic shovel, and a loader supply ore and waste to a fleet of 15 Euclid haulage trucks, which move ore to the primary crusher and waste rock to storage dumps. Current mining capacity is about 50 million tonnes per year, 19 million tonnes of which is ore.

The gold-copper concentrate, which contains 20-25 percent copper and 50-150 grams per tonne of gold, is trucked in bulk about 250 miles by gravel road to a rail spur at Mackenzie, B.C. The concentrate is currently sold to Falconbridge Ltd. and transported by rail to a smelter in Quebec.

A major contributor to the northern B.C. economy, Kemess South Mine has pumped about $25 million a year into the region annually since 2002.

"Northgate has done an excellent job improving mine and mill facilities, and improving operating efficiencies," said B.C.'s Ministry of Energy, Mines and Petroleum Resources in a synopsis of mining in the Western Canadian province.

Environmental success

The Kemess Mine continues to operate in compliance with all of its operating permits and successfully produces de-sulphurized tailing sands for use in its tailings storage, a process that has resulted in considerable cost savings and a dramatic reduction in mine tailings that require underwater storage in its tailings impoundment to be safe.

Northgate officials say they have developed a culture of continual improvement at Kemess that has been applied to ensure that compliance with relevant legal requirements are met or exceeded. The implementation of the continual improvement programs at the mine has resulted in some relaxing of regulated monitoring programs and willingness of regulatory agencies to work with Kemess Mines, the company said.

Northgate also has worked to improve its environmental reputation by aggressively pursuing mine reclamation practices and by being proactive in addressing environmental issues, it said.

The company also conducts a comprehensive fisheries compensation program at Kemess Mine. Fish ladders have been constructed by Kemess Mine to increase available fish habitat and fish populations near the mine site and these have far exceeded mandated goals, Northgate said.

Lower risk, cost in modern mining

Despite the modern, safe techniques it uses, Kemess still contends with public misperceptions about copper mining.

"No one in the industry does things today the way they did 20 or 30 years ago, but we are being judged by the sins of our fathers," one Canadian official observed.

Today, the Kemess Mine is considered a low-risk, low-cost core asset from which Northgate hopes to expand its operations. In the fourth quarter of 2004, it posted production of nearly 95,000 ounces of gold at a record cash cost of $59 per ounce, along with record output of 24.7 million pounds of copper . The company expects continued strong production 2006 and proposes to expand operations by developing the Kemess North deposit.