The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Industrial grade electricity compliments world-class geology in region
Mineral and coal exploration in British Columbia, which peaked at C$680 million in 2012, retreated to roughly C$476 million in 2013. This drop is on par with the roughly 30 percent decrease in exploration expenditures worldwide.
The dynamics that led to the decrease - tight capital markets that continue to challenge the ability of junior explorers to raise money, senior miners keeping tight reins on exploration spending and softer gold prices - have remained in play during 2014.
These factors, however, are tempered by the world-class geology and better-than-average infrastructure Canada's westernmost province has to offer.
This infrastructure got a major upgrade in August, when BC Hydro announced that the 287-kilovolt Northwest Transmission Line is energized to Bob Quinn Lake, delivering industrial grade electricity into the heart of the Skeena district, a stretch of northwestern B.C. rich in copper and gold.
"The transmission line has the potential to serve communities as well as current and proposed mine projects in an area the size of France. This area, known to the mineral exploration and development community as the Golden Triangle, has more than 935 mineral occurrences, including 10 potential new mines that could provide more than 4,000 direct jobs and C$18 billion in capital investment," according to the Association for Mineral Exploration British Columbia.
Imperial Metals Corp.'s Red Chris mine project is anticipated to be the first of these potential mines to plug into the 344-kilometer- (213 miles) long power line. The project was scheduled to begin commissioning upon the completion of a final leg of power line in September. In the wake of the tailings breach at Imperial's Mount Polley Mine to the south, however, an independent engineering review of the tailings facility at Red Chris must be approved by the Tahltan First Nation before the copper-gold mine is allowed to proceed.
Based on reserves of more than 300 million metric tons of ore grading 0.36 percent copper and 0.27 grams per metric ton gold, a mine at Red Chris is projected to produce 2.1 billion pounds of copper and 1.32 million ounces of gold over an initial 28-year mine-life.
KSM (Seabridge Gold), Galore Creek (NovaGold Resources-Teck Resources), Schaft Creek (Teck-Copper Fox Metals), and Brucejack (Pretium Resources) are among the next generation of advanced exploration projects that are hoping to plug into the clean, affordable electricity that the NTL has to offer.
KSM, Brucejack attract investors
Like the rest of the province, the Skeena Region of northwestern British Columbia experienced a roughly 30 percent drop in exploration spending, from C$285 million in 2012 to C$201 million in 2013. With very little new money being invested in the junior mining sector, this trend is expected to carry over in 2014.
There are, however, a number of the more advanced and tantalizing projects in the Skeena that continue to attract venture capital.
In July, Seabridge Gold Inc. closed a C$13.8 million financing, providing the company with the capital to step up its exploration program at the KSM gold-copper project located about 65 kilometers (40 miles) northwest of Stewart, British Columbia.
Seabridge Chairman and CEO Rudi Fronk said, "This financing enables us to commit the necessary resources for an expanded 2014 program at KSM. We have been refining the targeting data obtained from the geophysical surveys completed this spring. This work has helped us to establish additional high-priority opportunities that we would like to test this year if possible."
These high-priority opportunities are higher grade "core zones" that the company has identified below the porphyry copper-gold deposits that make up the world-class KSM project.
One such zone has been partially delineated below the Kerr portion of the KSM deposits.
Following a 25-hole program at Deep Kerr in 2013, Seabridge announced a maiden inferred resource of 515 million metric tons grading 0.53 percent (6.1 billion pounds) copper and 0.36 g/t (5.9 million ounces) gold for the deposit.
Expanding Deep Kerr and seeking a similar zone below Iron Cap are Seabridge's primary drill targets for 2014.
Immediately to the east of KSM, Pretium Resources Inc. continues to attract investors tantalized by the high-grade gold and strong economics of developing the Brucejack gold project.
The Valley of the Kings deposit at Brucejack contains 15.3 million metric tons of measured and indicated resources averaging 17.6 grams per metric ton (8.7 million ounces) gold and 5.9 million metric tons of inferred resources averaging 25.6 g/t (4.9 million ounces) gold, according to a resource updated in December.
Completing a C$20.7 million flow-through financing in March, Pretium launched an exploration program that included bulk sampling and drilling from both the surface and underground.
In July and August, the company closed a trio of associated financings for another US$58.5 million. In addition to exploration, these funds are being applied towards environmental, engineering and permitting activities.
According to a feasibility update completed in June, a 2,700-metric-ton-per-day mine at Brucejack producing 7.3 million ounces of gold over an 18-year mine life.
Pretium is targeting 2017 to begin commercial production at this 404,000-ounce-per-year gold operation.
Roughly 25 kilometers (16 miles) west of Seabridge's KSM property, Colorado Resources Ltd. is investigating KSP, a large land package that includes properties that the company staked and the southeastern quarter of SnipGold Corp.'s Iskut property, which Colorado has secured on option to earn up to an 80 percent interest.
"Snipgold's founders are to be commended for assembling one of the most significant mineral landholdings in northwestern British Columbia," said Colorado Resources President and CEO Adam Travis. "Our planned exploration program will be aided both by new geological models developed in the Kerr Sulphurets Camp by both Seabridge Gold Inc. and Pretium Resources Inc. as well as by recent infrastructure development which has brought roads and power lines to the area's doorstep."
With initial exploration of the newly assembled property identifying two regional deformation zones - the KSP Deformation Zone, which extends for more than 20 kilometers (12.4 miles); and the Big Rock Deformation Zone, which is more than six kilometers (3.7 miles) long – Colorado remobilized field crews to conduct detailed follow up investigations on these discoveries. This work included geological mapping, rock channel sampling, drill site selection and preparation.
If permits are approved in time, Colorado hopes to drill this KSM-esque property before winter weather sets in.
Copper-gold at the end of NTL
Some 140 kilometers (85 miles) to the northeast of its newly acquired KSP project, Colorado had drills turning on two properties near the terminus of the Northwest Transmission Line.
At North ROK, situated about 15 kilometers (nine miles) Imperial Metals' Red Chris project, Colorado cut significant copper in three of five holes drilled during an early 2014 drill program.
North ROK hosts an inferred resource of 142.3 million metric tons averaging 0.22 percent (690.3 million pounds) copper and 0.26 grams per metric ton (1.19 million ounces) gold.
At Eldorado, located adjacent to the east side of the Red Chris property, Colorado completed 892 meters of drilling in four holes this year. The best of which, EL14-008, cut 196.5 meters averaging 0.19 g/t gold and 0.06 percent copper.
Some 68 kilometers (42 miles) north of Red Chris, Kaizen Discovery Inc. completed a first-ever drill program on a porphyry copper-gold target at its Tanzilla project. The 1,600-meter drill program is being funded by Freeport-McMoRan, which can earn a 51 percent interest in the property by investing C$8 million over four years.
In July, Kaizen Discovery purchased West Cirque Resources in an all-share transaction.
Roughly 50 kilometers (32 miles) east of Tanzilla, Carmax Mining Corp. completed airborne geophysics, the re-logging of historical drill core and a six-hole drill program at its Eaglehead copper- gold-molybdenum-silver project. The company said Quantec Titan-24 IP survey along with historical and current drilling has outlined a large chargability anomaly that appears to be mineralized for at least 4,500 meters.
Teck Resources pulled in the reins on exploration at the large porphyry copper-gold projects it is involved with in northwestern B.C.
At GJ, situated about 30 kilometers (20 miles) west of Red Chris, Teck completed a minimal program of data compilation and drill core re-logging. Though nominal, the program is expected to push the company's total investment in the property over the C$12 million needed to earn an initial 51 percent interest from partner, NGEx Resources Inc, a stake that can be raised to 75 percent by spending C$44 million by the end of 2020.
Similarly, Teck did not have drills turning at two other joint venture projects - Galore Creek (Teck-Novagold) or Schaft Creek (Teck- Copper Fox Metals).
Doubleview Capital Corp. completed an early season five-hole drill program at the Hat copper-gold property, located in the Sheslay Valley region some 95 kilometers (60 miles) southwest of Dease Lake. The best hole, H11, cut 451 meters averaging 0.22 percent copper and 0.17 g/t gold.
Teck Resources, Garibaldi Resources, Romios Gold, Ashburton Ventures and Alix Resources are other companies with significant land positions in the emerging Sheslay Valley area.
Approximately 100 kilometers (60 miles) northwest of the Sheslay Valley, Brixton Metals completed a 1,287-meter drill program at its Thorn gold-silver property.
Capstone Mining Corp. has hung a "for sale" sign on its Kutcho copper-zinc project, located roughly 100 kilometers (60 miles) east of Dease Lake. In August, the company reported that a sale process is underway.
Namesake silver properties
Roughly 100 kilometers (60 miles) southeast of the gold and copper projects at and around KSM, a pair of mining explorers are forging ahead at namesake projects better known for their high-grade silver.
Homestake Resource Corp. holds a pair of properties in this region - Homestake Ridge and Kinskuch.
Homestake Ridge hosts indicated resources of 604,000 metric tons averaging 6.4 g/t (124,000 ounces) gold and 48.3 g/t (939,000 ounces) silver and inferred resources of 6.8 million metric tons averaging 4.2 g/t (911,000 oz) gold and 93.6 g/t (20.4 million oz) silver.
Agnico Eagle Mines Ltd., which entered into option to earn up to a 65 percent interest in Homestake Ridge in 2012, drilled six holes at the property in 2014 before withdrawing from the project in favor of a gold discovery made near its Meadowbank Mine in Nunavut.
Slide, located to the southeast of the resource at Homestake, was the first target of the 2014 drilling.
Highlights of Agnico's drilling include 4.5 meters grading 144 g/t silver and 0.20 g/t gold in hole HR14-264; and 4.74 meters of 97.2 g/t silver in hole HR14-266.
"Agnico's drilling has demonstrated that a silver resource is likely to be developed with further drilling at the Slide target," according to Homestake President Joe Kizis.
To continue the exploration at Slide, Homestake has asked Agnico for the opportunity to continue with the 2014 drill program without the added time and money required to of establish new camp or mobilizing a drill.
Prior to Agnico's pullout, Homestake was focusing its efforts on further refining drill targets at Kinskuch, a property immediately to the east of Homestake Ridge. This work focused on evaluating three primary target areas: Esperanza, an Eskay Creek-type silver-gold target; FH, a Red Chris/North Rok-type porphyry copper-gold target; and Illiance River, a silver-lead-zinc target.
Immediately southeast of Homestake Ridge and encompassed to the east by the Kinskuch property, Dolly Varden Silver Corp. continues to forge ahead with exploration at its namesake property.
An early season geophysical program helped identify targets within three corridors on the Dolly Varden property: Torbrit-Red Point, an Eskay-Creek style target; Musketeer, which has numerous silver-rich epithermal vein-type showings with strong potassic radiometric signatures; and Wolf-Surprise, where silver-enriched volcanogenic massive sulfide mineralization has been identified.
Dolly Varden raised C$5.66 million to fund a late season 2014 drill program at its namesake project.
Kechika Trough draws zinc miners
The Kechika Trough, a finger of the Selwyn Basin that stretches some 500 kilometers into northern B.C., makes the Omineca region a favored place to seek sedimentary exhalative zinc-lead deposits
For around two decades a 50-50 joint venture between Teck and Korea Zinc Co. has been investigating zinc prospects in both the Selwyn Basin and Kechika Trough.
In 2013, the zinc seeking partners cut a deal with Canada Zinc Metals Corp. to explore the Pie, Yuen and Cirque East properties, part of the junior's larger land package in the Kechika Trough. Under the agreement, Teck and Korea Zinc could earn up to a 70 percent interest in the properties by investing C$8.5 million in them by 2019.
With a 2014 budget that will top the C$500,00 first year minimum, the joint venture partners plan to complete targeted geological mapping, selective rock and soil sampling on high priority targets, core re-logging and sampling from historical Pie and Yuen drill core, and potentially geophysical surveys.
Additionally, Teck bought 1.25 million units of Canada Zinc (each unit consists of one share and one purchase warrant) for C$500,000.
The Pie, Cirque East and Yuen properties lie adjacent to Cirque, an advanced zinc-lead project already owned by Teck and Korea Zinc.
Mineable reserves at Cirque are reported to total 22.1 million metric tons grading 9.4 percent (4.6 billion pounds) zinc, 2.8 percent (1.4 billion) lead and 60 g/t (42.6 million ounces) silver.
In its exploration and mining summary, the British Columbia Ministry of Energy and Mines reports that Teck re-established the camp at Cirque and drilled deep targets at the property during 2013.
For 2014, Canada Zinc focused its own exploration on Cardiac Creek deposit of its Akie property, located immediately southeast of the properties optioned to Teck and Korea Zinc.
Cardiac Creek hosts an indicated resource of 12.7 million metric tons grading 8.4 percent (2.4 billion pounds) zinc, 1.7 percent (472 million pounds) lead and 13.7 g/t (5.6 million ounces) silver (at a 5 percent zinc cut-off grade) and an inferred resource of 16.3 million metric tons grading 7.4 percent (2.6 billion pounds) zinc, 1.3 percent (482 million pounds) lead and 11.6 g/t (6.1 million ounces) silver.
An eight-hole drill program focused on expanding a high-grade core of this deposit. Highlights of the first six holes drilled include 8.9 percent zinc, 1.3 percent lead and 10.5 g/t silver over 9.4 meters in hole A-14-111; and 7.4 percent zinc, 1.2 percent lead and 10.7 g/t silver in hole A-14-115.
"Drill hole 115 appears to have expanded the high grade core of the deposit further up-dip and it continues to demonstrate the consistency of grade and thickness of the high-grade core within the deposit," said Canada Zinc President and CEO Peeyush Varshney.
NE miners take a hit
With metallurgical coal selling at six-year lows, companies have put the skids on currently operating and coming coal mines in northeastern B.C.
In April, Walters Energy shuttered its Wolverine coal mine, laying off some 415 employees of the operation located about 25 kilometers (15 miles) south of Tumbler Ridge, a coal mining town of about 2,700.
"These layoffs are particularly unfortunate because our employees have worked very hard to keep these mines competitive in the face of daunting market conditions," said Walters Energy CEO Walter Scheller.
Walters Energy also idled operations at its Brazion group mines, laying off another 218 workers at the two operations, northwest of Tumbler Ridge closer to the community of Chetwynd.
"These coal reserves remain valuable assets," Scheller added. "However, given the current met coal pricing environment, our best course of action at this time is to idle these operations until we can achieve reasonable value from these reserves."
Teck, which had been gearing up to re-open the Quintette coal mine, has deferred development and placed the operation on care and maintenance until the market for steel-making coal improves.
In a similar move, Anglo American plc is suspending operations at its Trend coal mine by the end of 2014 and has delayed start-up of Roman, an expansion project immediately south of Trend. Combined, Trend and Roman were expected to employ 450 people.
Teck and Anglo's projects are situated within 25 kilometers (15.5 miles) of Tumbler Ridge.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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