The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Further opportunities to be detailed in 2023 feasibility study North of 60 Mining News – October 15, 2021
An Oct. 11 feasibility study details plans to establish an underground block cave mine below the current open-pit mining at the Red Chris copper-gold project in Northern BC.
A Tahltan Nation-themed haul truck hauls material from the current surface mining at the Red Chris copper-gold mine.
A block cave mine at the Red Chris project in British Columbia's Golden Triangle is forecast to produce 316,000 ounces of gold annually over the first six years at a cost of negative US$144/oz after accounting for the value of the 80,000 metric tons of copper also recovered each year, according to a prefeasibility study published by Newcrest Mining Ltd. on Oct. 11.
The Australian miner says this engineering and economic study validates its belief that Red Chris is an ideal candidate for leveraging its experience with block cave mining, a bulk tonnage underground mining technique that involves starting at the bottom of the orebody and allowing the deposit to progressively collapse under its own weight.
"Since acquiring our 70% interest in Red Chris in August 2019 we have been focused on unlocking its future potential, which we have always believed to be significant, and which is confirmed by the study," said Newcrest Mining CEO Sandeep Biswas.
The Red Chris block cave mine outlined in the prefeasibility study would produce an estimated 4.9 million oz of gold and 1.5 million metric tons of copper from 406 million metric tons of ore over a roughly 31-year mine life. Additional gold and copper would be produced from the existing open pit.
This operation generates an after-tax net present value of US$1.8 billion (C$2.3 billion) and an internal rate of return of 17%.
Based on the economics outlined in the PFS, this operation would pay back the estimated US$2.1 billion (C$2.6 billion) of capital needed to develop the block cave mine in about 3.2 years.
"The Red Chris Block Cave Pre-Feasibility Study confirms Red Chris's potential to be a long-life, low-cost mine capable of producing a total of 5.3Moz of gold and 1.7Mt of copper at very attractive cash margins," said Biswas. "The study highlights the quality of the deposit with a C$2.3 billion NPV and 17% IRR, but we believe captures only part of the longer-term opportunity at Red Chris."
This longer-term opportunity is related to the recent exploration success at Red Chris.
According to a calculation published by Newcrest in March, Red Chris hosts 980 million metric tons of measured and indicated resource averaging 0.41 grams per metric ton (13 million oz) gold and 0.38% (3.7 million metric tons) copper.
The feasibility study elevates 480 million metric tons of these resources to a probable reserve averaging 0.52 g/t (8.1 million oz) gold and 0.45% (2.2 million tons) copper.
In addition to upgrading additional existing resources to reserve status, Newcrest says recent exploration has identified new higher-grade zones east of the current deposit that could bolster the size and economics of Red Chris block cave mining.
"East Ridge is a new zone of higher-grade mineralization located outside the initial mineral resource estimate, with intercepts to date highlighting the potential for resource growth over time," said Biswas. "We are currently evaluating 'early mining' options for the high-grade pods in the East Zone with the aim of generating additional cash flows prior to the completion of block cave construction."
Imperial Metals Corp., which owns the remaining 30% interest in Red Chris, first encountered these higher-grade East Zone pods with a 2009 hole that cut 432.5 meters of 2% copper and 3.8 g/t gold.
Newcrest's 2020 drilling cut additional wide sections with impressive grades at East Zone. One such hole, RC634, cut 166 meters averaging 1.5% copper and 3 g/t gold, inside a wider 532-meter intercept averaging 0.82% copper and 1.3 g/t gold.
Earlier this year, the partners contracted Perenti Global Ltd. for the development of a 3,500-meter underground exploration decline at Red Chris.
In addition to offering a platform for more detailed resource upgrade and expansion drilling from underground, this development could be used to mine higher-grade ore from East Zone pods as the block cave operation is developed.
Newcrest and Imperial have also encountered similar higher-grade pods of mineralization further east in the newly discovered East Ridge zone.
One hole drilled at East Ridge earlier this year, RC700, cut 366 meters averaging 1.1 g/t gold and 0.93% copper from a depth of 738 meters, including 146 meters averaging 2.1 g/t gold and 1.6% copper from 780 meters.
Hole RC700 was drilled 100 meters above RC688, a previously reported hole that cut 344 meters averaging 0.7 g/t gold and 0.75% copper, including 170 meters averaging 1.1 g/t gold and 1.1% copper.
"The exploration results being obtained in the East Ridge and the multiple high-grade pods being defined by additional drilling in the East Zone provide further project upside beyond the scope of this study," said Imperial Metals President Brian Kynoch.
This upside will be investigated in a Red Chris Block Cave Feasibility Study that provides a more detailed plan for mining MB1, one of three macro blocks outlined in the prefeasibility study.
The feasibility study is slated for completion early in 2023 and it is currently envisioned that the first ore from block cave mining at Red Chris would be available early in 2026.
"Red Chris is already in a Tier 1 mining jurisdiction. We believe that we can transform the asset into a Tier 1 operation through the application of our proven industry-leading block caving technologies and, in doing so, provide attractive financial returns to shareholders as well as multi-generational employment and other opportunities in Tahltan territory and in British Columbia," said Biswas.
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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