The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Mining Explorers 2022 - January 19, 2023
A drill sets up to test higher grade gold targets at Sulphurets, one of three surfacing deposits considered in the 2022 prefeasibility study for establishing a mine at the KSM gold-copper-silver-molybdenum project in British Columbia.
Workers explore the Mitchell deposits on Seabridge's KSM gold-copper-silver mine project in BC's Golden Triangle.
11 billion metric tons of measured, indicated, and inferred resources have been outlined so far in five deposits at KSM.
With open pit mineable reserves that can support a financially robust mine capable of averaging more than 1 million ounces of gold, 3 million oz of silver, 178 million pounds of copper and 4.2 million lb of molybdenum annually for 33 years, Seabridge Gold Inc.'s KSM project in British Columbia's Golden Triangle is world-class by all measures.
This operation, which was detailed in a prefeasibility study completed in June, does not consider the block cave mining of underground resources that was included in a 2016 PFS. Instead, the 2022 study involves open-pit mining of the Mitchell, East Mitchell and Sulphurets deposits only.
This change in the KSM mine plan is the result of Seabridge's 2020 acquisition of Pretium Resources' Snowfield project, which added East Mitchell to the project. Essentially an extension of the near-surface Mitchell deposit that has long put the "M" in the Kerr-Sulphurets-Mitchell project, East Mitchell has significantly added to the global resources at KSM.
According to an early 2022 calculation for all of the deposits, KSM hosts 5.4 billion metric tons of measured and indicated resources averaging 0.51 grams per metric ton (88.3 million oz) gold, 0.16% 19.4 billion lb) copper, 2.4 g/t (414 million oz) silver, and 63 parts per million (742 million lb) molybdenum; plus 5.7 billion metric tons of inferred resource averaging 0.36 g/t (65.6 million oz) gold, 0.28% (35.1 billion lb) copper, 2.2 g/t (406 million oz) silver, and 33 ppm (415 million lb) molybdenum.
"KSM is really an entire district hosting a nest of potentially economic porphyry deposits with different characteristics," said Seabridge Gold Chairman and CEO Rudi Fronk.
With the addition of East Mitchell, Seabridge decided to reconfigure the prefeasibility study to focus on the precious metals enriched deposits that come to surface at KSM.
Based on the global KSM resource and the mine plan detailed in the PFS, the Mitchell, East Mitchell, and Sulphurets deposits host 2.29 million metric tons of proven and probable reserves averaging 0.64 g/t (47.3 million oz) gold, 0.14% (7.32 billion lb) copper, 2.2 g/t (160 million oz) silver, and 76 ppm (385 million lb) molybdenum.
The 2022 PFS envisions the reserves mined from these surface deposits feeding a 133,000-metric-ton-per-day mill for the first three years of operations, which would be expanded to 195,000 tpd for the remaining 30 years.
The 2022 study also considers autonomous mine equipment, where applicable, and an integrated remote operations center to reduce on-site personnel. The new mine plan also includes the use of an electric haul truck fleet with trolley assist to reduce carbon emissions and energy costs through the replacement of diesel with low-cost and clean hydroelectricity.
"We have redesigned KSM for an inflationary environment. The themes for this PFS are capital and energy efficiency," said Seabridge Gold Chairman and CEO Rudi Fronk.
As a result, the open pit mining outlined in the PFS generates an after-tax net present value (5% discount) of US$7.9 billion, internal rate of return of 16.1%, and a payback period of 3.7 years.
The reserves considered for mining in the 2022 PFS only accounts for about 25% of the resources outlined so far at KSM.
A supplemental preliminary economic assessment completed after the PEA outlines plans for underground block-cave mining that would extend the life of the KSM for 39 years beyond the operation outlined in the PFS.
"In our updated PFS we focused on the gold-rich deposits because of their faster payback and the relative simplicity of an open-pit only operation. However, we are very mindful that a deep deficit in mined copper is projected to be on the horizon as the world electrifies and moves towards a net zero carbon future," said Fronk. "We therefore wanted to highlight KSM's potential to contribute to addressing this need more fully than the mine plan contained in our updated Preliminary Feasibility Study."
To accomplish this, the PEA envisions an underground-focused mine that would produce 14.3 million oz of gold, 14.3 billion lb of copper, 68.2 million oz of silver, and 13.8 million lb of molybdenum over 39 years.
When you apply the credits for the gold, silver, and molybdenum produced, the total average cost to produce a pound of copper over the life of the mine is estimated to be US$1.44.
"We think this opportunity will be attractive to a prospective partner," said Fronk.
While seeking a partner with the wherewithal to advance the world-class KSM project to production, Seabridge continues to explore early-stage projects in its pipeline.
This includes drilling at Iskut, a Northern BC project that is prospective for a world-class copper-gold system similar to the KSM project about 30 kilometers (19 miles) to the east.
"We acquired the large land package at Iskut because of its many characteristics similar to our giant KSM project," Fronk said.
Seabridge's 2022 drilling at Iskut tested the Bronson Slope and Quartz Rise gold-copper targets along a regional trend that seems to be a primary control on the distribution of mineralized intrusive centers on the property.
So far, 187 million metric tons of measured and indicated resource averaging 0.36 g/t gold and 0.12% copper has been outlined by a previous explorer at Bronson Slope, and drilling at Quartz Rise has encountered gold-copper grades below a clear lithocap.
Lithocaps are layers of alteration typically formed above a deeper porphyry system, which is the larger gold-copper deposit Seabridge is seeking at Iskut.
As drills tested for KSM-like porphyry deposits, Seabridge was bestowed the 2022 Jake McDonald Annual Mine Reclamation Award for its C$12 million environmental cleanup and reclamation program at the historical Johnny Mountain Mine at Iskut.
"We undertook this work before the current emphasis on ESG simply because it was the right thing to do and an expression of our corporate values. The Iskut property is stunningly beautiful and it was a privilege to remove the blight of irresponsible historical mining practices," said Fronk.
Seabridge will complete the full reclamation and closure of the Johnny Mountain site in 2025.
In addition to KSM and Iskut, Seabridge's portfolio includes 3 Aces, a high-grade orogenic gold project in southeastern Yukon that the company tested with a late 2022 season drill program; Courageous Lake, a project in Northwest Territories with 7.97 million oz of gold in measured and indicated resources averaging 2.3 g/t gold; and Snowstorm, a Nevada property with the potential to host a large, high-grade gold deposit.
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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