Miners chase myriad BC mineral deposits
Geologist: Drilling, exploration and mining development climbed to new heights in province's northern and central regions in 2010
Last updated 1/23/2011 at Noon
Mining exploration activity in northern British Columbia approached record levels in 2010 with explorers setting a new drilling record and spending about C$168 million in pursuit of a wide range of minerals, including gold, copper, silver, molybdenum, and rare earth elements, according to a top provincial geologist.
Paul Wojdak, regional geologist for the Northwest Region of British Columbia's Ministry of Energy, Mines and Petroleum Resources, said the major good news mining story in 2010 for central and northern British Columbia was the acquisition of Terrane Metals Co., owner of the Mt. Milligan gold-copper project, by Denver-based Thompson Creek Metals Co.
"I get a real kick out of this. Of all the gold companies that might have been looking at Mt. Milligan, it was a moly miner that came in and made the deal," Wojdak told a capacity crowd attending the Yukon Geoscience Forum in Whitehorse in late November.
Since the acquisition, Thompson Creek has begun development of the C$915 million conventional truck-shovel open pit mine with the building of a road, power line and construction camp. The miner is also looking for higher grade material at depth under the pit area at Mt. Milligan with the help of a Titan 24 IP survey and also under Camp Hill where higher grade mineralization was identified recently, Wojdak said.
Located some 145 kilometers, or 90 miles, northwest of Prince George, B.C., the mine is expected to be in full production in 2013 with average annual metal production over a 22-year mine life forecast to be 81 million pounds of copper and 194,500 ounces gold and 400 workers. The mine plan has been designed for extraction of higher grade and gold rich reserves in the early years. In the first six years of the mine plan, gold production will account for 55 percent of the revenue. Mt. Milligan recently received its final authorizations from the Canada's Ministry of Environment, enabling construction to forge ahead.
New life in older mines
Meanwhile, established mines such as Huckleberry and Endako began expansion projects, while advanced copper-gold projects already through the permitting process like Red Chris, Galore Creek and others in the midst of permitting such as the KSM and Schaft Creek gold-copper projects made considerable progress toward development.
Wojdak said the 15,000 metric-tons-per-day Huckleberry copper-gold-silver-molybdenum mine, located about 123 kilometers, or 75 miles, southwest of Houston, B.C., went from being on the brink of closure to preparing for a 10-year extension of its mine life.
Exploration to find additional reserves on the Huckleberry property and on adjacent mineral leases recently acquired by operator Huckleberry Mines Ltd. to the north is ongoing. The mine employs more than 230 full time workers.
At the 31,000-tons-per-day Endako molybdenum mine, owners are pursuing a C$500 million expansion and modernization designed to boost production to a rate of 55,000 tpd. Thompson Creek, a 75 percent owner and operator of Endako, also drilled west of the current mining area looking for new molybdenum deposits. Located near Fraser Lake, the mine employs 315 permanent workers and 400 more in temporary construction jobs.
Wojdak said the existing resource Kemess South copper-gold mine was expected to be mined out in January, but Northgate Minerals Corp. is reconsidering the proposed Kemess North Project as an underground mine.
In a 30-hole 2010 drill program totaling 16,439 meters, Northgate said it gained further confirmation a compact, continuous higher grade zone of gold and copper mineralization exists beneath the eastern third of the resource area currently being considered for a bulk underground mining operation. The Kemess North deposit was estimated from previous drilling to contain more than 1.4 million ounces of gold and 500 million pounds of copper.
Key power grid extension
At Red Chris, Imperial Metals Corp. completed a feasibility study that estimated construction costs of C$443 million for a 30,000 tpd open-pit mine, but apparently had difficulty convincing bankers that it can build a mine that cheaply these days, said Wojdak.
"But these are the guys who built Huckleberry just 14 years ago for C$135 million, so I think they are probably on track," he observed.
Imperial is working toward construction of a mine at Red Chris upon completion of the Northwest Transmission Line.
"The key is when the northern extension of the BC power grid gets under way. That's when they will make a construction decision," said Wojdak.
"They have done a lot of engineering work toward a project redesign, so they're in a position to determine where a revised tailings site will be. I think we will see this project go back into construction soon. The 40 kilometers of access road that they've built is a pretty impressive feat of construction and engineering," Wojdak observed.
At the huge KSM copper-gold project, Seabridge Gold Dec. 9 said it expects to issue a new resource estimate in January incorporating results from the drilling of 46 core holes at its recently identified Iron Cap deposit. Every hole intersected ore grade mineralization over widths up to 313 meters.
New impetus for mega-projects
A big corporate side story in northern British Columbia is that newly created Pretium Resources purchased the huge Snowfield and Brucejack properties adjacent to the KSM Project for C$450 million from Silver Standard Resources in October. The Snowfield deposit is a near-surface, low-grade, bulk-tonnage, porphyry-style gold deposit with additional potential for copper-gold and molybdenum, and Brucejack is primarily a gold-silver deposit that may also contain variable amounts of base metals such as copper, lead and zinc.
Pretium, led by CEO Robert Quartermain, issued 44.2 million shares in December in an initial public offering and raised C$265 million.
Snowfield and Brucejack are adjoining claims totaling more than 4,450 hectares, or 11,000 acres. The property is located 64 kilometers, or 40 miles, north of Stewart, B.C., and just east of the Alaska panhandle.
A proposed C$3.47 billion Snowfield-Brucejack open-pit mine would have a 27-year life, according to an October report on the site by Wardrop Engineering Inc.
Wojdak said Silver Standard did considerable drilling at Brucejack in 2010 and got spectacular results. "Prior to that, the property had a resource of 320 million metric tons of ore at a gram per ton gold, but I didn't want to even put that number out there because it's going to get blown out of the water by the results of drilling this year," he said.
Like KSM, "the Snowfield/Brucejack properties present significant development challenges in an area of British Columbia that has gone from nowhere to being No. 4 in global copper-gold resources," Wojdak said.
"And I think the results of work in the area this year will take BC to the top of the list," he said. "I need to emphasize the magnitude of work done there this year. Is it a mine or not? I don't know."
Another large deposit in the area is on the Schaft Creek Project where Copper Fox Metals Inc. worked in 2010 on elements of a mine design and getting a better handle on the high-grade porphyry copper-gold-molybdenum-silver mineralization on the property. Under a
2002 option agreement with Teck, Copper Fox has acquired a 100 percent working interest in the Schaft Creek Project subject to a 30 percent net proceeds interest held by Liard Copper Mines Ltd., a private company 78 percent owned by Teck and an earn-back option held by Teck.
Over a 22.6-year lifespan Schaft Creek was estimated to produce 4.76 billion pounds copper, 255 million pounds molybdenum, 4.5 million ounces gold, and 32.5 million ounces silver. Rhenium also would be recovered in the moly concentrate, though its value as a by-product has not yet been assessed.
Drilling was expected to continue through the winter with a short hiatus during the holidays, but Wojdak said the key thing happening behind the scenes at Schaft Creek is a feasibility study.
In mid-November, Copper Fox President Elmer Stewart said results of a recent deep imaging induced polarization survey and 2010 diamond drilling results suggest the property has the potential to host substantial additional quantities of copper-gold-molybdenum mineralization at depth and along strike.
"The geophysical data suggests that the majority of the drilling, which was completed on the south flank of the deposit, was too shallow to test the deeper part of the new chargeability anomaly coincident with the higher copper and gold grades intersected at the bottom of (hole) DDH 398," Stewart said. "The positive drill results could have a significant effect on several key areas of the feasibility study and cannot be excluded if the real value of the Schaft Creek deposit is to be established."
If Copper Fox does complete the feasibility study and earn itself 93.4 percent of the project, Teck has 120 days to decide whether to exercise its back-in right. The major could buy back up to 75 percent,of Schaft Creek by matching up to four times Copper Fox's expenditures. At the 75 percent level, Teck also would assume responsibility for arranging all production financing.
"It is a key decision point for Teck," Wojdak added.
Exploration projects abound
The biggest exploration results of 2010 came from Richfield Ventures Inc.'s Blackwater Project located about 100 kilometers, or 62 miles, south of Vanderhoof in the Nechako Plateau area of central British Columbia, Wojdak said.
Richfield reported long intersections of gold and silver mineralization such as hole BW 91, which cut 171 meters starting at 8 meters averaging 3.13 g/t gold and 10.8 g/t silver and including 7 meters averaging 22.62 g/t gold and 80 g/t silver, 10 meters averaging 5.29 g/t gold and 20 g/t silver, and 17 meters averaging 9.7 g/t gold and 9.0 g/t silver, along with significant lower grade intervals of gold and silver mineralization at depths of 293 meters and 440 meters. Hole BW 91 is located 50 meters south of BW 87 (115 meters averaging 2.59 g/t gold including 57 meters of 4.79 g/t gold).
"They drilled quite a series of holes of this caliber with (more than) a gram of gold over 300 meters," Wojdak said. He said Richfield is in the midst of a 50,000-meter drilling program and expects to complete a mineral resource estimate for Blackwater by mid-2011.
He also said the Blackwater property has interesting 70-million-year-old rocks that are similar to the geology of the Newton Project 100 miles to the south where Amarc Resources Ltd. recently reported a gold discovery and the Coles Creek Property 165 kilometers to the west that is being explored by Callinan Mines Inc.
Callinan said in December that samples from a 20-hole drilling program conducted on the Coles Creek property in a sulphide-bearing volcano-sedimentary structure were still being assayed and evaluated. One hole, COLE 28, intersected a 21.25-meter section grading 3.368 g/t gold, 15.33 g/t silver, 2.04 percent zinc and 0.15 percent lead. Assays from six drill holes were still being analyzed.
Due east from Coles Creek and 75 kilometers, or nearly 47 miles, from the Endako Mine is the Chu Project where TTM Resources Inc. is exploring for molybdenum and copper. To date the drilling on the Chu project has outlined mineralization exceeding 1.7 kilometers long, 650 meters deep, and 400 meters wide. The deposit remains open to depth. TTM advanced the project to the pre-feasibility stage in fall 2010.
Other projects in northern British Columbia that attracted exploration dollars in 2010 include Xstrata Inc.'s Bell Copper Mine, which closed in 1992 with a substantial known resource; Avanti Mining Corp.'s Kitsault Project on the province's northern coast, one of the top five primary molybdenum development assets worldwide, along with the nearby Roundy Creek deposit, which is in the federal and provincial permitting process; the Lone Pine Project where Bard Ventures Ltd. has identified a substantial molybdenum and rhenium resources and plans additional drilling in 2011; and the Jennings property, where Agnico-Eagle Mines Ltd. conducted a major drill program in a potentially large tungsten-molybdenum deposit on the B.C.-Yukon Territory border.
Development strategy from China
Wojdak said a cluster of exploration projects in the Stewart and Cassiar-Atlin areas drew considerable interest in 2010.
The Silvertip Project, for example, is being explored by Silvercorp Metals Inc., a Chinese-Canadian company with an aggressive business plan it is bringing from China. In 36 diamond drill holes covering 10,913 meters, Silvercorp reported intercepts of up 13.30 meters grading 289 grams per metric ton (9.3 ounces per ton) silver, 5.33 percent lead, and 8.65 percent zinc along with shorter intervals of higher grade ore up to 2.51 meters of 696 g/t (22.4 oz/t) silver, 12.96 percent lead and 14.48 percent zinc.
"The approach is to get into production as fast as possible, build relationships with governments and the regulatory community and grow the mine over time," he said.
Toward that goal, Wojdak said Silvercorp is working toward construction of a 200-metric-ton-per-day mine at Silvertip to develop the property's high-grade silver-lead-zinc resource.
Among other significant projects in north and central British Columbia:
The Yellowjacket gold project where Eagle Plains Resources bought out its partner, Prize Mining Inc., and is following up on modest gold production with additional exploration using a percussion drill capable of drilling holes at an angle and placer mining stripped to bedrock that exposed some high-grade ore.
BCGold Corp. also carried out an underground drilling program at the Engineer Mine in 2010 that targeted spectacular wire gold.
In October, the explorer completed 578 meters of 1,500 meters of planned drilling below Level 5, the main access level, and reported Intersections of coarse visible electrum in a quartz-calcite breccia vein that assayed up to 344 g/t gold (10.03 oz/t) and 328.0 g/t silver (9.57 oz/t) over a core length of 0.35 meters.
The junior said the drilling results substantiate, for the first time, the gold and silver grades of historic chip and channel samples from Engineer Mine, which now will be incorporated into a NI 43-101-compliant inferred mineral resource estimate due in April.
At the Bronson Slope porphyry copper-gold project 80 kilometers, or 50 miles, east of Wrangell, Alaska, Skyline Gold Corp. reported significant results Dec. 22 from a 1,063-meter drill program in October. Assays included 1.0 meter grading 27.4 g/t gold and 9.8 g/t silver with measurable amounts of copper, lead and zinc in definition drilling on the Snip-1 high-grade gold zone. The historic Snip Gold Mine (with production of over 1 million ounces of gold), is located about 3.0 kilometers, or 1.5 miles, along strike to the northwest.
Bravo Gold Corp. is advancing the high-grade gold-silver Homestake Ridge Project as a potential underground mining operation with a current NI 43-101-compliant indicated resource, at a 3.0 g/t gold-equivalent cut-off, of 191,000 ounces gold and 1.35 million ounces silver, plus an inferred resource of 348,000 ounces gold and nearly 8 million ounces silver.
Two deposits have been indentified to date and multiple exploration targets remain to be tested on the 2,585-hectare, or 6,385-acre, property.
Bravo Gold reported assay results from 2010 drilling of 48 core holes covering 17,924 meters that included 45.5 meters averaging 2.1 g/t gold and 16.5 g/t silver that encompasses a 2.1-meter interval averaging 7.9 g/t gold with 52.8 g/t silver and a 4.4-meter interval averaging 3.4 g/t gold with 38.5 g/t silver.
The junior also reported intersecting high-grade and silver-enriched, copper-lead-zinc mineralization including 0.7 meters (down hole thickness) averaging 0.7 g/t gold, 64.4 g/t silver, 1.9 percent copper, 12.5 percent zinc and 5.3 percent lead, which extends mineralization in the Fox Reef Zone an additional 70 meters down-dip and along strike to the northwest.
Metal Mountain Resources Inc. began initial construction of a 205-tpd mine in November at the high-grade gold and silver Dome Mountain Project located about 38 kilometers, or 24 miles, east of Smithers, B.C. The project has an estimated mine life of two years; however the company sees potential to increase the 10,970.9-hectare, or 27,099-acre, property's mineral resources through further exploration. In August, Mines Act and Environmental Management Act permits were issued to the company, and a favorable prefeasibility study was completed in September. Wojdak said Metal Mountain plans to truck ore from the project to an undisclosed location for processing.