SpongeG
Apr 1, 2008, 5:31 AM
Billion-dollar mine proposed for northeast B.C.
British Columbia's next mine could be a $917-million copper-gold property in the northeast part of the province.
Terrane Metals announced on Monday that the final feasibility study for its Mount Milligan project near Mackenzie favours it as economically and environmentally sound.
A final feasibility study is the single-most important document in the development of a mining project - confirming or denying that it can emerge as a viable mine - although Terrane still must conclude negotiations with local first nations and obtain environmental approvals from the federal and provincial governments.
It will also need financing.
Pending those approvals, the mine could be in commercial production by early 2012, Terrane president and CEO Rob Pease said in an interview.
Pease is a former executive with Placer Dome, who scooped up the Mount Milligan property shortly after Placer was taken over by Barrick in 2006.
"I could see that in a strong copper-gold price environment, Mount Milligan really is a very interesting project. It's not every day that a potential billion-dollar project gets announced in British Columbia. We are very excited about it."
The mine would be an open pit, with permanent employment for 400 workers over a 15-year lifespan - although Pease said drilling results indicate that the resource is more extensive and the mine could be expanded depending on future metal prices.
Pease acknowledged that the mine will have to work to attract staff, but noted a sharp decline in employment in the region's forest sector. He also noted that the mine is within commuting distance of Mackenzie and Fort St. James, which should make it attractive for prospective workers.
It's a typical B.C. porphyry copper-gold deposit, with a projected annual production cost of 36 cents per pound for copper net of gold credits - or $268 for gold net of copper credits.
Those projections are based on commodity pricing of copper at $2.75 US per pound and gold at $600 US per ounce - the average commodity price of those metals over the past three years.
Pease said those prices are substantially different than what Terrane expects to see over the life of the mine and the pit - lower copper prices and higher gold prices than the projections suggest.
The property has a proven and probable mineral reserve of 333.7 million tonnes, containing 1.6 billion pounds of copper and 4.59 million ounces of gold - with a cut-off value for those resources of $1.60 copper and $550 gold.
Those values take into account metallurgical recoveries, concentrate grades, transportation costs, smelter treatment charges, and an 88-cent Canadian dollar versus U.S. currency.
The annual internal rate of return at Mount Milligan is projected at 18.1 per cent over 15 years.
Infrastructure requirements are comparatively small - the area is criss-crossed with old logging roads, the minesite itself is a former clearcut, and there's a high voltage substation in the region to provide power for milling operations.
"This is not pristine wilderness," Pease said. "This is an area that has been used industrially for years. We've gone to great lengths to compact the footprint of the mine, to a three by four kilometre square area.
"All of the area from the open pits to the plant area would naturally drain into the tailings pond.
"It has low geotechnical risk. It's our water storage area. As we envision the mine now, we would never be in a position where we have to discharge water, ever."
Pease said the McLeod Lake Indian Band, which has a government-recognized treaty right in the Mount Milligan area, has indicated its support for the project.
A Fort St. James band, the Nak'azdli First Nation, has also expressed an interest.
Nak'azdli advisor Leonard Thomas said in a telephone interview that the first nation is looking for some reassurance that the project will be halted if it is determined that it would cause long-lasting environment damage.
"We support economic development and we understand the dynamics of creating opportunities other than forestry," Thomas said. "[But] mining is a new field that we've never before been directly involved in."
http://www.canada.com/vancouversun/news/business/story.html?id=325ea2c4-f8c9-4f96-9b5b-f501779827f6&k=20115
British Columbia's next mine could be a $917-million copper-gold property in the northeast part of the province.
Terrane Metals announced on Monday that the final feasibility study for its Mount Milligan project near Mackenzie favours it as economically and environmentally sound.
A final feasibility study is the single-most important document in the development of a mining project - confirming or denying that it can emerge as a viable mine - although Terrane still must conclude negotiations with local first nations and obtain environmental approvals from the federal and provincial governments.
It will also need financing.
Pending those approvals, the mine could be in commercial production by early 2012, Terrane president and CEO Rob Pease said in an interview.
Pease is a former executive with Placer Dome, who scooped up the Mount Milligan property shortly after Placer was taken over by Barrick in 2006.
"I could see that in a strong copper-gold price environment, Mount Milligan really is a very interesting project. It's not every day that a potential billion-dollar project gets announced in British Columbia. We are very excited about it."
The mine would be an open pit, with permanent employment for 400 workers over a 15-year lifespan - although Pease said drilling results indicate that the resource is more extensive and the mine could be expanded depending on future metal prices.
Pease acknowledged that the mine will have to work to attract staff, but noted a sharp decline in employment in the region's forest sector. He also noted that the mine is within commuting distance of Mackenzie and Fort St. James, which should make it attractive for prospective workers.
It's a typical B.C. porphyry copper-gold deposit, with a projected annual production cost of 36 cents per pound for copper net of gold credits - or $268 for gold net of copper credits.
Those projections are based on commodity pricing of copper at $2.75 US per pound and gold at $600 US per ounce - the average commodity price of those metals over the past three years.
Pease said those prices are substantially different than what Terrane expects to see over the life of the mine and the pit - lower copper prices and higher gold prices than the projections suggest.
The property has a proven and probable mineral reserve of 333.7 million tonnes, containing 1.6 billion pounds of copper and 4.59 million ounces of gold - with a cut-off value for those resources of $1.60 copper and $550 gold.
Those values take into account metallurgical recoveries, concentrate grades, transportation costs, smelter treatment charges, and an 88-cent Canadian dollar versus U.S. currency.
The annual internal rate of return at Mount Milligan is projected at 18.1 per cent over 15 years.
Infrastructure requirements are comparatively small - the area is criss-crossed with old logging roads, the minesite itself is a former clearcut, and there's a high voltage substation in the region to provide power for milling operations.
"This is not pristine wilderness," Pease said. "This is an area that has been used industrially for years. We've gone to great lengths to compact the footprint of the mine, to a three by four kilometre square area.
"All of the area from the open pits to the plant area would naturally drain into the tailings pond.
"It has low geotechnical risk. It's our water storage area. As we envision the mine now, we would never be in a position where we have to discharge water, ever."
Pease said the McLeod Lake Indian Band, which has a government-recognized treaty right in the Mount Milligan area, has indicated its support for the project.
A Fort St. James band, the Nak'azdli First Nation, has also expressed an interest.
Nak'azdli advisor Leonard Thomas said in a telephone interview that the first nation is looking for some reassurance that the project will be halted if it is determined that it would cause long-lasting environment damage.
"We support economic development and we understand the dynamics of creating opportunities other than forestry," Thomas said. "[But] mining is a new field that we've never before been directly involved in."
http://www.canada.com/vancouversun/news/business/story.html?id=325ea2c4-f8c9-4f96-9b5b-f501779827f6&k=20115