Carmacks project inches toward startup

Western Copper Corp., the spinoff from Western Silver Corp. charged with bringing the Yukon Territory's Carmacks copper deposit into production, cleared a significant regulatory hurdle recently.

The Yukon Environmental and Socioeconomic Assessment Board notified Western Copper in February that its proposal for the Carmacks Copper Project was adequate, under terms of the Yukon Environmental and Socioeconomic Assessment Act and opened the review to public comments on the proposal.

Carmacks, which is 100 percent owned by Western Copper, is about 130 miles north of Whitehorse near the Yukon River and the Klondike Highway. The main deposit at Carmacks, known as the No. 1 Zone, contains a measured and indicated resource of 14.4 million tonnes at a grade of 1.10 percent total copper at a 0.5 percent total copper cutoff grade. The deposit also contains a smaller quantity of gold that technical consultants say could be recovered.

Western Copper is seeking permits for an open pit mine with annual processing of 1.8 million tonnes of ore. The company proposes to extract copper from the ore using conventional acid heap leach technology followed by solvent extraction for concentration of the resulting copper sulphate solutions and electrowinning for the recovery of 14,500 tonnes per year of copper cathode in excess of 99.97 percent purity. Western Copper has contracted M3 Engineering of Tucson to update its feasibility study, which was completed in 1995. Completion of the update is expected this spring.

Mine life is projected for eight years with some operations running year round and others for 10 months per year. Another seven years are expected for reclamation and shutdown.

The public review period was scheduled to end March 19, but one community asked for a 30-day extension. The Board has granted an extension to April 3. Public meetings are scheduled for March 26 and March 27 in Carmacks and Pelly Crossing.

David Jensen, vice president of corporate development at Western Copper, said the focus of the public review would be listening to concerns and answering questions from residents of communities near the Carmacks Copper Project.

The communities of Carmacks, Pelly Crossing and Mayo and the Little Salmon-Carmacks and Selkirk First Nations are located near the proposed project site.

Prior to its acquisition by Glamis Gold Ltd. in 2006, Western Silver (formerly Western Copper Holdings Ltd.) worked extensively to develop the Carmacks copper deposit. Due to low copper prices, Western Silver suspended its efforts indefinitely in the late 1990s.

A 1997 engineering report suggested development of Carmacks copper could be economic with prices above $1.05 per pound. Economic factors such as cost escalation over the past 10 years, metal prices and the current exchange rate will affect this figure. Copper, however, is currently selling for about $3 a pound.

Startup hinges on permits

In 2004 Western Silver re-entered the permitting process and, along with successor Western Copper, has been engaged since then in the regulatory review process under YEAA and the recently enacted YESAA process.

A technical review of the project under YEAA has been ongoing for 20 months and is approaching the final stages, according to Western Copper. A draft comprehensive study report is expected to be issued by the Yukon government this spring. Western Copper hopes previous reviews and its extensive environmental assessment submissions will help speed the screening of the project, Jensen said March 15.

Last year, Western Copper continued exploration drilling at Carmacks that has uncovered new areas of mineralization.

In January, Dale Corman, CEO and co-chairman of Western Copper, said results from the company's 2006 drilling program "exceeded our expectations."

"The new Zone 13, which also contains molybdenum, has the potential to significantly expand the scope of the project," Corman added.

Western Copper merged last year with Lumina Resources, another Canadian junior. The company now controls four Canadian properties, including Carmacks, and one deposit in central Mexico.

If the Carmacks project is permitted in time to enable construction to begin this summer, Jensen said copper production could reasonably be expected to begin at Carmacks in early 2009 or perhaps late 2008. l