Scaled back activities at Palmer for 2020
COVID-19, underground permit reviews limit planned activity North of 60 Mining News – June 26, 2020
Last updated 9/26/2020 at 2:53pm
Constantine Metal Resources Ltd. June 24 announced a US$2.15 million budget for 2020 activities related to the Palmer zinc-copper-gold-silver project in Southeast Alaska.
Funded by the Constantine Mining LLC Joint Venture, which is co-owned by Constantine (51%) and Dowa Metals & Mining Co. Ltd. (49%), the program includes summer field work, environmental and project permitting work for future underground exploration development, and continued outreach to keep the Haines Borough and State of Alaska informed on project activities.
In mid-2019, Constantine published a preliminary economic assessment that considers an underground mine providing ore for a 3,500-metric-ton-per-day mill that would produce 1.07 billion pounds of zinc, 196 million lb of copper, 18 million ounces of silver, 91,000 oz of gold and 2.89 million metric tons of barite over an initial 11-year mine life.
The capital costs to build this mine are calculated to be US$278 million, which would be split between the Constantine Mining LLC Joint Venture partners
A wide margin between operating costs and the value of the metals being mined creates compelling economics and a quick payback of the capital needed to develop this mine.
The PEA forecasts the Palmer Mine to have a post-tax net present value (7% discount rate) of US$266 million; a 21% post-tax internal rate of return; and a payback period of 3.3 years.
There has been limited activity at Palmer so far this year due to COVID-19 considerations and travel restrictions.
"Although 2020 is a period of reduced project expenditures and challenges due to the COVID-19 pandemic, the CMJV (Constantine Mining Joint Venture) continues to make meaningful progress to advance the project towards underground exploration and feasibility studies," said Constantine Metal Resources President and CEO Garfield MacVeigh. "We also continue to be excited about the exploration potential on both the CMJV property as well as the immediately surrounding district controlled 100% by Constantine. Finding the offset of the thickest part of the South Wall zone and new deposit discoveries on CMJV lands or 100% Constantine land are obvious opportunities to add value."
Most of the field work is planned for mid- to late-summer to reduce the concerns of COVID-19 exposure and transmission with an emphasis on using local Haines employees for as much of the work as possible.
A new road to the underground exploration portal location at Palmer provides access to several surface mineral prospects that have seen limited historical work. These include Jasper Mountain; Red Creek; EM 37 Zone, where sampling returned 12% zinc, 2.7% lead, and 47.6 g/t silver; and Christmas Creek. All of these prospects will be evaluated for future drill targeting.
The AG deposit is the subject of a Master of Science dissertation and will receive additional geological work comprising surface mapping, core logging and selective sampling for research study.
A five-acre land purchase in the project area will be prepared for a future underground exploration base and expanded core storage area.
The 2020 program will also include work to fulfill environmental monitoring requirements, continue to build the environmental baseline database, and advance project permitting for future underground exploration at Palmer.
Last year, Constantine received all the necessary authorizations to proceed with an underground exploration plan for Palmer, including the Alaska Department of Environmental Conservation approvals of the plan of operations and waste management permit to manage wastewater and waste rock.
DEC staff, however, later remanded the permits for further review due to a 9th Circuit Court decision in the County of Maui vs. Hawaii Wildlife Fund case. An April Supreme Court Opinion reached the same result as the 9th Circuit decision in the Maui vs. Hawaii Wildlife case, but takes somewhat of a middle ground and offered some guidance in how it should be applied to other situations. DEC is currently waiting to receive additional project study information requested before deciding on the remand of the WMP for the underground exploration.
Constantine also said Elizabeth Cornejo will be stepping down from her role as vice-president of community and external affairs but will remain with the company as a part-time consultant. She will also continue to serve the Palmer project as a Haines-based community liaison.
Dowa has agreed to fund this year's program, which will result in minor dilution of Constantine's interest in the project.