Miner eyes year-end startup at Red Chris
Northern B.C. copper-gold mine plugs into grid, mill testing gets under way; startup requires First Nation, provincial approvals
Last updated 12/21/2014 at Noon
The nearly operational Red Chris Mine is plugged into the electrical grid, and Imperial Metals Corp. is readying all the components for operations in anticipation of final approvals from the local Tahltan First Nation and Government of British Columbia.
By the end of October, the final leg of the power line that connects Red Chris to the affordable and clean power delivered by the 287-kilovolt Northwest Transmission Line was complete. This milestone is allowing Imperial Metals to test all the major electrical components with the goal of a startup at the copper-gold mine by the end of 2014.
"With power now at the Red Chris mine, we expect crushing operations to begin in November and the grinding and flotation circuits to begin operating in December," Imperial Metals said in its third-quarter financials released Nov. 14.
During a Dec. 10 update, Imperial Metals Vice President of Corporate Affairs Steve Robertson told Mining News that the crusher and conveyors have been commissioned and the onsite commissioning team is working its way through the electrical components in the mill building.
Though all the site preparations are progressing according to schedule, the tailings dam breach at Imperial Metals' Mount Polley Mine has added an extra level of scrutiny to the tailings storage facility at Red Chris - an essential element in putting the mine into production.
Tahltan question dam
The August failure of the tailings dam at Imperial Metals' Mount Polley Mine caused many members of the Tahltan Nation to question the integrity of a tailings facility at the nearly complete Red Chris Mine in their traditional territory.
Sitting between the failure of the Mount Polley tailings dam and the impending start-up of a new mine by the owners of Mount Polley, the Tahltan Central Council, the governing body of the Tahltan Nation, conducted a poll to get a better idea of its members' thoughts on Red Chris.
Of the 350 Tahltan members who responded to the survey, 77 percent said the Mount Polley tailings spill affected how they felt about Red Chris. Despite being shaken by the spill, more than 55 percent of the respondents said they still support the mine. An overwhelming 93 percent of the answers to the survey indicated that they wanted more information on the ongoing reviews and potential agreements between the Tahltan and the mine developer.
While the majority of Tahltan are in favor of opening the Red Chris Mine, roughly 26 percent of the respondents are strongly opposed to the new development.
Many of these members are likely to be part of Klabona Keepers, a Tahltan conservationist group that blockaded the roads leading to Red Chris following the dam burst at Mount Polley. By stopping the overland supply of fuel, personnel and equipment, the group comprised of Tahltan elders and families aimed to impede progress until its concerns are met.
In late August, the Tahltan hosted a series of gatherings to discuss the pending Red Chris Mine in the wake of the Mount Polley dam failure.
By the end of the gatherings - which involved two Tahltan-only meetings prior to inviting Imperial Metals and B.C. government to participate - Imperial Metals had agreed to a third-party review of the Red Chris tailings facility to be conducted by an engineering firm chosen by the Tahltan.
Klabona Keepers ended its blockade after the meetings. The group later resumed its protests until Imperial Metals was granted an injunction by the British Columbia Supreme Court Nov. 26 that prevents future blockades of its mine development project.
Klohn Crippen Berger, the engineering firm chosen by the Tahltan First Nation, completed a review of the tailings impoundment design, as well as predictions of the water quality of the facility and the geohazards that might affect the integrity of the dam.
During its site inspection, the engineering firm could only inspect the "North Starter Dam" as the more permanent North and South dams have yet to be constructed.
The engineers that visited Red Chris said the starter dam is appropriately designed and a visual inspection showed none of the telltale signs of instability.
"The dam appears to be well constructed," the engineers concluded in the report.
Though engineers were unable to inspect the yet-to-be constructed permanent dams, they said the general designs being considered for these pending facilities are sound.
"Similar tailings dams have been constructed using centerline construction techniques at several sites in British Columbia. We consider that this design is feasible and will be stable statically and dynamically if constructed properly," according to the report.
The engineering firm, however, raised concerns about the potential of water seeping through soils at the base of the tailings facility, which could cause stability issues.
This permeability issue was taken into account during the original dam design, and it was determined that the very fine material in the tailings themselves would seal the more permeable natural material and prevent seepage.
Klohn Crippen Berger, which won the 2012 Canadian Consulting Engineering Award of Excellence for its work on a recent tailings expansion at the Greens Creek Mine in Southeast Alaska, does not dispute the concept that the tailings will seal the facility but recommends careful monitoring of water balance to ensure that the water is staying in the facility as designed.
All told, the engineering firm listed 22 recommendations for the safe construction and operation of the tailings facility at Red Chris. Most of the suggestions in the report are associated with risk mitigation through diligent monitoring of potential risks; keeping seepage and other models updated based on observations; and finalizing emergency preparation and response plans.
Of these recommendations made by Klohn Crippen Berger, the last one on the list seems to be the one that requires the most immediate attention and would likely be the cornerstone of the other 21 suggestions in the report.
"We strongly consider that the Red Chris site appoints a technical review board immediately that consists of senior, independent engineers and scientists in the following technical areas: geotechnical and tailings engineering;, hydrology, hydrogeology and geochemistry-water quality," the engineering firm commented. "Good practice is to have a management system in place that plans tailings disposal and executes tailings disposal, (and) raises, monitors and improves the performance of the system."
With the report complete, Imperial Metals and the Tahltan Nation are finalizing a plan to ensure that the tailings facility recommendations are addressed.
"There were 22 recommendations that came out of that report, and we have put together a work plan and we've presented that to Tahltan and have had a very positive response, so we will be working with them in order to implement that work plan and make sure those recommendations get attended to," said Robertson.
To start operations at Red Chris, an environmental management act permit to discharge tailings is required. Imperial Metals says it anticipates the permit will be issued in time to begin tailings discharge before the end of the year.
"We continue to work on the discharge permit for the mine, but we don't anticipate that that will in any way impede our ability to commission and get the mine up and running," said Robertson.
Red Chris cash flow
With the Mount Polley Mine being out of commission for an indefinite amount of time, Imperial Metals is looking forward to generating a revenue stream at Red Chris.
Keeping the company solvent is important, not only to management and shareholders, but also to ensure that the company can afford to rehabilitate the damage caused by the failure of the Mount Polley tailings dam.
The breach and resultant shutdown of Mount Polley has reversed the flow of cash at the central British Columbia mine.
Imperial Metals recorded costs of C$67.4 million related to the tailings dam breach during the third quarter. These costs include C$20.3 million for response and recovery as well as initial rehabilitation and restoration activities; and C$47.1 million provision for future costs related to the tailings dam breach.
To help bridge the cash-flow chasm between the tailings dam failure and realizing revenue from Red Chris, Imperial Metals completed a C$115 million financing in early September.
"This financing along with the projected cash flow from the Red Chris mine together with insurance proceeds is expected to fund the estimated rehabilitation and restoration costs of the tailings dam breach at the Mount Polley mine," the company said in its third-quarter report.
Based on reserves of more than 300 million metric tons of ore grading 0.36 percent copper and 0.27 grams per metric ton gold, a mine at Red Chris is projected to produce 2.1 billion pounds of copper and 1.32 million ounces of gold over an initial 28-year mine-life.
The projected construction cost to complete the Red Chris mine is now estimated to be C$643 million versus the previously estimated construction costs of C$631 million.
Mount Polley rehab
With three ongoing investigations, it is still too early to delve into the cause, or more likely, causes of the failure of the tailings dam at Mount Polley. In the meantime, clean-up and stabilization of the site is making strides.
Imperial Metals reported that the highest priority components of the initial phase of stabilization and early recovery efforts were largely completed by the end of October.
Overall, this first phase of a long-term remediation plan for the area impacted by the Mount Polley breach focuses largely on stabilizing the site for the winter. Towards this goal, the primary objectives of this phase is to stop the flow of tailings into Hazeltine Creek; stabilize the site to manage seasonal events such as the spring freshet; and ensure that water reaching Quesnel Lake meets B.C. water quality guidelines.
In a Nov. 24 update, the British Columbia Ministry of Environment reported that Imperial Metals has started or completed many of the phase 1 initiatives needed to meet these objectives.
Two of the biggest tasks - building a berm across the dam breach to hold the remaining tailings in place and lowering the water level of Polley Lake, where the surge from the tailings burst plugged the outlet with debris - have been achieved.
Additionally, a number of erosion mitigation measures are completed or underway, including a silt fence installation at the mouth of Hazeltine Creek, re-contouring, flow diversion, Polley Lake outlet flow control and installation and operation of settling ponds at Lower Hazeltine Creek.
"While full environmental remediation will take years, this first phase of the longer term plan sets a clear path towards the recovery process," explained British Columbia Minister of Environment Mary Polak. "We will continue to work closely with the mine, First Nations and local communities to ensure the necessary mitigation plans are in place to restore the land back to its original state as best we can. The first phase of this plan will stabilize the environment during the spring freshet and ensure cleanup efforts remain on track."
The second phase of the clean-up program, which will begin in the spring and run through the summer of 2016, will focus on remediating the areas impacted by the breach.
As Imperial Metals begins to get a handle on stabilizing and cleaning up the site, the company is beginning to study its options for resuming operations at Mount Polley. However, the company admits that the timeline for such a feat remains unclear.
In the interim, Imperial Metals is hoping that getting Red Chris into operation will stabilize its cash-flow breach, which will help fund the clean-up at Mount Polley.
"While the precise costs of rehabilitation and restoration are presently unknown, the company believes these costs can be managed over time, given the underlying value of Imperial's assets, the convertible debenture financing, the current sources of liquidity, insurance proceeds and the expected cash flow from the Red Chris mine," the company explains on its website.