JV approves US$25.5M budget for Palmer
Largest budget ever for VMS mine project in Southeast Alaska North of 60 Mining News - April 24, 2023
Last updated 5/11/2023 at 2:38pm
American Pacific Mining Corp. April 24 announced that a US$25.5 million (C$34.5 million) budget has been approved for the 2023 work program at Palmer, which will be the largest single-season program ever carried out at this high-grade volcanogenic massive sulfide project in Southeast Alaska.
A 2019 preliminary economic assessment that was updated early in 2022 outlines plans for an underground mine and 3,500-metric-ton-per-day mill at Palmer 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.
American Pacific gained a roughly 41% interest in this advanced-stage polymetallic mine project through the acquisition of Constantine Metal Resources Ltd. in October of last year. Dowa Metals & Mining Company Ltd. owns the remaining 59% of Constantine Mining LLC, a joint venture formed to advance exploration, permitting, development, and production at Palmer.
This year's US$25.5 million program is slated to include 9,000 meters of surface exploration drilling, 2,500 meters of geotechnical drilling, camp construction, ongoing baseline environmental and site engineering work.
"This is the single largest Palmer Project program and budget to date and sets the stage for us to continue de-risking the asset as we work with our joint venture partner to strategically move the Palmer Project forward towards a feasibility study," said American Pacific Mining CEO Warwick Smith.
According to a 2018 calculation, the Southwall and RW zones that make up the main Palmer deposit host 4.68 million metric tons of indicated resource averaging 5.23% (539 million lb) zinc, 1.49% (154 million lb) copper, 30.8 grams per metric ton (4.6 million oz) silver, 0.3 g/t (451,000 oz) gold, and 23.9% (1.12 million metric tons) barite; plus 5.34 million metric tons of inferred resource averaging 5.2% (612 million lb) zinc, 0.96% (113 million lb) copper, 29.2 g/t (5 million oz) silver, 0.28 g/t (48,100 oz) gold, and 22% (1.18 million metric tons) barite.
The exploration drilling will focus on upgrading inferred resources within the Southwall zone to the higher confidence measured and indicated resource categories.
The geotechnical drilling is slated to include nine holes aimed at providing a better understanding of the hydrogeology at Palmer, including water volume and quality.
In preparation for advancing a feasibility study for developing an underground mine at Palmer, the 2023 program will include engineering studies, metallurgical programs on the Southwall and RW zone mineralization, a site evaluation that provides an alternate production portal, and further analysis of mill and tailings management at the site.
Ongoing environmental baseline studies will also continue to support permitting of a mine at Palmer.
Dowa Metals & Mining has agreed to fully fund the 2023 program.
"American Pacific has a roughly $65 million CAD market capitalization and will see more than $30 million CAD spent by its partner on exploration and development in 2023," said Smith.
American Pacific has the option to pay a portion or all of its share of the expenses by the end of October to minimize or eliminate dilution of its interest in the Constantine Mining JV.
As operator of the Palmer project, American Pacific will receive 7% of program expenditures for managing the 2023 work program.