Vancouver-based New Gold plans to develop its New Afton copper-gold project into an underground block cave mine, based on a feasibility study the company released April 2. New Afton is located six miles west of Kamloops in south-central British Columbia, at the site of the former Afton open pit mine. That mine operated from 1978 to 1987, producing approximately 500 million pounds of copper, 500,000 ounces of gold and 3 million ounces of silver.

New Afton's reserves contain almost 1 billion pounds of copper, more than 1 million ounces of gold and more than 3 million ounces of silver. The feasibility study envisages an initial 12-year mine life, with a maximum mining rate of 11,000 metric tons per day. Initial capital expenditures would amount to US$268 million, with additional life of mine expenditures of $215 million. If New Gold keeps to its intended schedule, the mine could start production in 2009.

The project's location is "very, very unique," New Gold's president and CEO, Chris Bradbrook, said at the BMO Capital Markets Global Resources Conference in Tampa, Fla., Feb. 26. "The power is right there, the road is right there, the location is really quite something," he explained. "We've got an available labor force. … If you can't get people to work at this site, at this location, I don't know where you can get them to work at mines around the world."

New Afton is one of the world's highest-grade copper porphyries and block caving is the lowest-cost underground mining method, according to Bradbrook. "Think of the ore body as a high-rise, and you go in and blast out the lobby," he said. This method is also being considered by Northern Dynasty for use at the Pebble project in Alaska. New Afton's mine plan is based around three cave blocks. Mining will commence from block 2, the central block, allowing time to remove water from the Afton pit and stabilize accumulated rock debris at the bottom of it. The eastern and western blocks 1 and 3 will be mined simultaneously.

For the first two years of New Afton's operations, ore will be trucked to the surface and processed on site to produce a concentrate, which will be transported by rail to smelters in eastern Canada or to Vancouver and then by ship to smelters in Asia. Once the ramp-up period is completed, ore will be crushed underground before being transported to surface by conveyor. For the entire mine life, tailings will be deposited in a new facility. Water will be supplied initially from the Afton open pit, and subsequently from Kamloops Lake to the north.

The underground mining contractor, Cementation Canada, was scheduled to begin work at the beginning of April. Power to the site will be supplied by a 300-meter connection to the British Columbia Hydro 138kV grid located to the north of the Trans-Canada Highway. New Gold submitted the formal Mine Permit application in January and the application is currently being reviewed by British Columbia agencies.