Wolverine edges closer to production

Yukon Zinc Corp. moved closer to startup of the Wolverine Project in Southeast Yukon Territory recently by gaining regulatory approval of its tailings and infrastructure design and construction plan.

Two Chinese companies, Jinduicheng Molybdenum Group Ltd. and Northwest Nonferrous International Investment Co. Ltd., acquired all of the public shares of Vancouver, B.C.-based Yukon Zinc last summer. Since then, the private company has quietly advanced the development of Wolverine.

The Yukon government April 14 said it approved a detailed design for a tailings storage facility for the proposed underground zinc-silver-copper-lead-gold mine, which is scheduled to begin commercial production in mid-2010.

"Yukon Zinc is now in a position to proceed with further implementing its development plans for the Wolverine Project," Yukon Energy, Mines and Resources Minister Brad Cathers said in a statement. "This is a tangible example of how Yukon's regulatory regime enables the development and management of Yukon's natural resources in a responsible and sustainable manner."

Wolverine, a volcanic massive sulphide deposit, is located 195 kilometers, or 121 miles, northwest of Watson Lake, B.C. and about 280 kilometers, or 174 miles, east of Whitehorse in Yukon Territory's Finlayson Mining District.

The property, originally staked in 1973, was extensively explored for more than two decades. In June 2005, following receipt of a Type B Water Licence and Mining Land Use Permit, Yukon Zinc, a closely held junior led by well-known geologist Harlan Meade, began a test mining program and detailed infill diamond drill program. From the successful test and subsequent exploration, the company developed a proposal for an underground mine with surface ramp access.

The mine site and industrial complex are located on a gentle sloping subalpine rider in the pass between the Go Creek watershed to the south and the Wolverine Creek watershed to the north. An airstrip and the tailings facility are situated near the headwaters of Go Creek.

The 178 square-kilometer, or 68.7-square-mile, Wolverine property is currently estimated to host measured and indicated resources of 4.46 million metric tons grading 12.14 percent zinc, 354.8 grams per metric ton silver, 1.16 percent copper, 1.69 g/t gold and 1.58 percent lead (at US$80 cut-off). Inferred resources are 1.69 million metric tons, containing 12.16 percent zinc, 385.4 g/t silver, 1.23 percent copper, 1.71 g/t gold and 1.74 percent lead (at the same cut-off).

Current plans call for daily production of 1,700 metric tons silver- and gold- bearing zinc, copper and lead concentrates to be sold primarily to metal markets in Asia. The concentrates are to be trucked about 860 kilometers, or 533 miles, to loading facilities at a port in Stewart, B.C., for transshipment to Asian smelters.

The estimated C$207.5 million project currently has a projected eight-year mine life; however, conversion of Wolverine's inferred resources into reserves with more infill drilling could extend the mine life another three years.

Tailings facility critical to production plan

The milling process at Wolverine will produce tailings, which will either be deposited in the underground mine as paste backfill, or deposited in the tailings facility. The tailings have high sulphide content and have the potential to become acid-generating if allowed to oxidize. Therefore, tailings will be stored in the saturated containment system described herein, according to Yukon Zinc's design plan.

The tailings storage facility's design is based on the company's field and laboratory investigations and takes into consideration a range of factors, including storage capacity requirements, site water balance, dam failure consequence rating, and earthquake and flood potential.

The tailings dam will be constructed in two stages: A 16.5-meter-high starter dam will be constructed to an elevation of 1306.5 meters in 2009 in preparation for mill startup in June 2010, and in 2011, the dam will be raised 7 meters using the downstream construction method to a final elevation of 1313.5 meters.

Construction moves apace

As Wolverine proceeds through the Yukon government regulatory approval process, Yukon Zinc anticipates completing the bulk of infrastructure construction needed for the project this year in time to begin commercial production by mid-2010.

So far, company crews have completed construction of a 26-kilometer, or 16-mile, all-weather access road to the Robert Campbell Highway, as well as bridge building and diversion ditches at the Wolverine Project, and are working on removal of organic material in preparation of bulk earthworks this spring.

A 205-person camp is already in place and ditches around the tailings facility are being prepared, Yukon Zinc spokesman Shae Dalphond told Mining News April 20.

Surface runoff diversion ditches on the upslope side of the industrial complex area are being constructed to direct clean runoff around the site to Wolverine Creek, while two other diversion ditches upslope and two ditches down slope of the industrial complex area also will be constructed to collect runoff from the site, and settle or treat it, as necessary, prior to discharging to the Go Creek watershed.

Crews have begun removing waste rock, or mucking, and shotcreting areas underground. Crews also have completed installation of a multiplate culvert at the mine entrance, Dalphond said.

All major permits for the project, including Quartz Mining and Type A water licenses, have been issued.

Yukon Zinc plans to complete the bulk earthworks, build foundations for the industrial complex and begin construction of the tailings facility this spring and summer, Dalphond said.

Construction of the industrial complex or mill building will follow in the fall and winter.

Mine preproduction development will occur from February 2009 to May 2010 to allow for full operating status in June 2010, the company told regulators. During the preproduction period, an estimated 2,200 meters of lateral development, plus an estimated 600 meters of raise development is planned.

One reason for scheduling startup in June was to give the mine's operators time to collect spring runoff from the mine site for the initial water needed to begin production rather than taking water from a nearby creek, according to regulatory filings.

25 percent First Nations hire

Yukon Zinc is also moving forward with efforts to fulfill its commitments under a socioeconomic participation agreement that the company signed with the Kaska First Nation, which is comprised of the Ross River Dena Council and the Liard First Nation. The Finlayson area is within the Kaska Nation's traditional territory.

The miner has committed to finding ways to maximize the employment of available and qualified Kaska members through training and scholarships, along with business opportunities and community support and development loans.

Yukon Zinc representatives attended a job fair March 18 in Watson Lake that Dalphond said generated some interest in the mine project among job candidates in attendance.

Currently, about 106 employees and several contractors are working on site. Of the employees, 72 are Yukon residents, including 26 First Nations members.

Once Wolverine goes into production, the mine's permanent work force will number about 160, Dalphond said.