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

Blackwolf Copper and Gold Ltd. Jan 31 announced that it reached an agreement with Dolly Varden Silver Corp. and New Moly LLC to study the viability of building a mill on New Moly's Kitsault project that could process ore from the three companies' projects in Northern British Columbia and Southeast Alaska.

"We are optimistic about the potential synergies of working with the companies in a scenario to reduce respective capital costs as well as reduce permitting timelines and risks by using a permitted site located on tidewater," said Blackwolf Copper and Gold President and CEO Robert McLeod.

Located about 65 kilometers (40 miles) southeast of Stewart, BC, Kitsault is the site of a historical mining operation that produced roughly 30 million pounds of molybdenum during intermittent mining from 1968 until 1982.

This Northern BC project, which is owned by New Moly subsidiary Avanti Kitsault Mine Ltd., continues to host one of the largest and highest-grade primary molybdenum deposits in the world. Because this property is home to legacy mining, a mill could be built there without further disturbances to the land.

Avanti has been advancing toward development at Kitsault since it acquired the world-class molybdenum project in 2008. Today, the company has been issued key federal and provincial permits for a proposed operation that would process 16.2 million metric tons of ore annually for 15 years. Avanti also has cooperation, benefits, and environmental agreements with the Nisga'a First Nation.

McLeod, who is a lifelong resident of Stewart in Nisga'a traditional territory, has already talked with the First Nation about the idea of establishing a centralized mill at Kitsault.

"Nisga'a Lisims Government has had initial discussions with the company on the concept of a hub and spoke mill at the site of the Kitsault project," said Charles Morven, secretary and treasurer for Nisga'a Lisims Government. "We look forward to further consultation on this and other natural resource opportunities within the Nass Area which is subject to the Nisga'a Final Agreement where we have constitutionally protected title and rights."

Now, New Moly is considering funding requirements to restart mining on this project that enjoys access to clean hydropower, as well as road and tidewater access.

Blackwolf, Dolly Varden, and New Moly have engaged Fuse Advisors Inc. to complete an initial assessment of the technical viability of establishing a polymetallic mill at Kitsault that could process ore from the companies' nearby projects.

Dolly Varden's Kitsault Valley silver-gold project is located just a few miles north of New Moly's Kitsault, and Blackwolf's Niblack project hosts multiple copper-zinc-gold-silver deposits on Prince of Wales Island in Southeast Alaska.

For Niblack, it would only be a short barge trip to deliver ore to the Kitsault hub mill. This would help Blackwolf resolve the issue of having too little available space at the mine site to build a mill and associated infrastructure.

Blackwolf Copper and Gold Ltd.

"With the Niblack Cu-Au-Zn-Ag deposit also located on tidewater and marine bulk transport being reasonably cost effective, we believe that the Kitsault site could be a potential good fit for Blackwolf," said McLeod. "Other companies with projects near tidewater in Alaska and B.C. have also expressed interest in participating."

After reviewing the metallurgical test work completed on mineralized materials from each of the projects, Fuse Advisors will assess the potential for blending or batching material, potential process flow sheets, potential throughputs from the various deposits and associated mill sizing and timelines.

The mining consultant assesses similar polymetallic mines and mills, including Boliden's operations in Scandinavia and the Jiama Project in China.

Blackwolf, Dolly Varden, and New Moly will share the costs of this Kitsault hub-and-spoke milling study.