Redcorp abandons amphitrac vehicle

Redcorp Ventures Ltd., parent of Redfern Resources Ltd. which operates the Tulsequah Chief Mine Project near Southeast Alaska, has abandoned plans for developing an unusual tow vehicle in favor of more conventional vessels for moving shipments of zinc, copper, silver, gold and lead concentrates from the mine down the Taku River to Juneau.

Redcorp President and CEO Terence Chandler May 15 said the company is completing an amendment to its existing environmental assessment certificate to permit the air cushion barge transportation system on the Taku River.

Chandler also said Redcorp has been working with Canadian federal and provincial regulatory agencies, Alaska state agencies and the Taku River Tlingit First Nation to secure regulatory authority to pursue new development at the historic mine. The project encompasses construction of a new underground mine beneath old workings that were previously operated from 1951-57 by Cominco Ltd. before being abandoned due to low metal prices.

Tulsequah Chief is believed to contain a probable reserve of 5.4 million metric tons grading 1.40 percent copper, 1.20 percent lead, 6.33 percent zinc, 2.59 g/t gold and 93.69 g/t silver, that can be produced in eight years. The company hopes to begin production later this year.

Transportation plan still on track

Completion of the Canadian EA amendment process is expected by the third quarter of 2008 and the Alaskan permitting process hinges on Redfern's submission of a revised operating procedures manual to include a proposed change in tow vehicles to replace the proposed "amphitrac" vessel. 

"We expect this change in vehicles to have a minimal impact, if any, on the Alaskan permitting process," Chandler said. 

He said design and construction of the amphitrac tow vehicle has been suspended due to a lack of progress on detailed design. 

"We have identified alternative existing vehicles to tow the ACB during the winter season and are currently evaluating their operating characteristics to ensure they meet or exceed our environmental operating requirements," Chandler explained. 

The Arctic Eagle tug boat that Redfern purchased and used during last year's operations is being retrofitted and re-powered in preparation for this year's barging needs.  It and a new tug, the Dalco, are scheduled to begin barging operations in June 2009 he added. Meanwhile, fabrication of the air cushion barge on which the concentrates will be transported is well under way with completion and delivery to Juneau expected later this summer.

Construction advances on and off site

The Vancouver, B.C.-based junior said it spent C$26.1 million during the three months that ended March 31, virtually all of which was related to development of Tulsequah Chief.

Redfern made significant progress in construction activities during the first quarter of 2008 and in April.

The company obtained permits to move equipment, cut trees for an airstrip and limited site-access roadway and clean up the old mine site. In April, it also gained additional approvals for more tree-cutting, building a stream crossing and other pre-construction work.

About 80 workers at two camps north and south of the mine site have completed six of 19 bridge crossings and about 10 kilometers, or 6.2 miles, of roadway, which is about half the total project requirement. Some 800 meters, or 2,600 feet, of the airstrip is finished and now in use.  Another 400 meters, or 1,300 feet, is undergoing final surfacing prior to general use.

Redcorp said additional construction this year will focus on completing the connection between the northern and southern camps, construction of waste rock facilities, establishing a water treatment plant for the mine drainage and site run-off and construction related to underground development.

The first of several permanent camps, including the kitchen, dining hall, half of the offices and 16 sleeping units, is in Seattle awaiting shipment to Juneau.  Two others are nearing completion in China, while a fourth facility that includes the mine dry and remaining offices and sleeper units, will be completed and sent to Seattle in June. 

Other items that have been purchased also are awaiting shipment to Juneau during this summer's barging program. They include an interim water treatment plant, all mills (rod, ball and regrind), other ore processing components and the underground mobile equipment fleet.

Financing, new manager secured

Redcorp signed a Memorandum of Understanding with MRI Trading AG of Zug, Switzerland governing terms of sales agreements for all of Tulsequah Chief's proposed production of zinc, copper and lead concentrates and the terms of MRI's provision of a contingent credit facility of C$25 million toward mine construction and working capital.

In April, the company also arranged a C$64 million loan.

Merit Consultants International Inc. has sued Redcorp, claiming damages for alleged breach of contract in the termination of Merit's contract as construction manager for the Tulsequah Chief project April 1.

Redcorp said Merit's claim is inappropriate under the circumstances, and it will vigorously defend the action and make a counterclaim alleging negligence and breach of contract on the part of Merit that has caused damage to Redfern, and for costs.

Redfern said it terminated Merit's agreement to serve as construction management contractor for the Tulsequah project due to dissatisfaction over the contractor's performance, the company said.

Redfern hired Sandwell Engineering Inc. to perform construction management services at Tulsequah Chief going forward.