The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
North of 60 Mining News - July 28, 2023
Core from drilling at East Ridge, a large resource expansion zone at Newcrest's Red Chris Mine in BC's Golden Triangle.
Ultra-high-grade gold in core from a hole drilled at Newcrest Mining's Brucejack Mine in Northern BC's Golden Triangle.
Click on image for larger map of porphyry copper-gold zones along the Red Chris corridor.
Click on image for larger map of Brucejack exploration target.
As the finalization of its merger with Newmont Corp. looms on the horizon, Newcrest Ltd. reports increased metals production and abundant upside at its Red Chris and Brucejack mines in the Golden Triangle region of Northern British Columbia.
"In May we reached an agreement for Newmont to acquire 100% of the issued shares in Newcrest," said Sherry Duhe, the interim CEO of Newcrest Mining. "The transaction will bring forward significant value to Newcrest shareholders through the recognition of our outstanding portfolio of long-life assets, our material and increasing exposure to copper, and our well-established organic growth pipeline."
This outstanding portfolio includes Red Chris and Brucejack, both of which had strong production numbers and impressive drill results during the second quarter of calendar year 2023.
"At Red Chris, we are exploring potential extensions to the Red Chris porphyry corridor and it was pleasing to deliver some impressive drilling results beyond the East Ridge Exploration Target, highlighting the potential for a fifth porphyry centre," said Duhe. "Growth drilling at Brucejack also delivered some exciting results, with the potential for further brownfields growth in several targets outside the Valley of the Kings current resource."
Red Chris is a large porphyry gold-copper mine that Newcrest bought 70% interest in 2019 and is operating under a joint venture with Imperial Metals Corp.
During the second quarter, Red Chris produced 13.73 million pounds of copper and 13,680 ounces of gold. This is an 18% increase over the 11.59 million lb of copper and a 30% jump over the 10,496 oz of gold produced during the first three months of 2023.
The increased metals production was largely driven by higher mill throughput and head grades, along with improved gold recovery.
The copper and gold output at Red Chris is expected to significantly increase with the transition from open-pit to block cave underground mining.
A prefeasibility study completed in 2021 details an underground block cave mining operation forecast to produce 4.9 million oz of gold and 1.5 million metric tons (3.3 billion lb) of copper from 406 million metric tons of ore over roughly 31 years of mining.
In preparation for this bulk tonnage underground mine, Newcrest is advancing an exploration decline that will provide a platform for underground drilling, as well as to potentially mine higher grade pods ahead of full-scale block caving.
As of July 20, the exploration decline has been advanced to 3,245 meters, and the installation of the first ventilation rise is largely complete.
A Red Chris block cave feasibility study is scheduled to be finalized before the end of the year. Several optimization opportunities to unlock further value are being assessed as part of the study, including options for the initial extraction level of the first block cave and alternative plant expansion options.
One of the areas for potential block cave optimizations at Red Chris is East Ridge, a large exploration target that extends east from the current resource.
As of mid-2022, the underground portion of Red Chris hosted 670 million metric tons of measured and indicated resources averaging 0.46 g/t (10 million oz) gold and 0.4% (2.7 million lb) copper; plus 180 million metric tons of inferred resource averaging 0.32 g/t (1.8 million oz) gold and 0.3% (540,000 lb) copper.
This already robust resource stands to expand significantly with the addition of East Ridge.
According to a calculation completed earlier this year, this exploration target hosts 400 metric tons of potential resource averaging 0.49% (4.2 billion lb) copper and 0.42 g/t (5.4 million oz) gold on the low end, and up to 500 million metric tons averaging 0.47 % (6.1 billion lb) copper and 0.39 g/t (6.1 million oz) gold on the high end.
Drilling during the second quarter has further confirmed the continuity of East Ridge mineralization, which should bolster confidence in the exploration target calculation.
To confirm the continuity, Newcrest drilled a series of three holes from south to north, the opposite direction of the bulk of drilling. The first of these holes, RC875, cut 406 meters averaging 1% copper and 1.1 g/t gold from a depth of 486 meters, including a 248-meter subsection averaging 1.4% copper and 1.6 g/t gold. The company says this confirms the continuity of higher-grade mineralization at East Ridge.
East Ridge is shaping up to be a larger and higher-grade zone than Cave Block 2, the second zone that is currently slated for block cave mining. Because of this, Newcrest is considering the possibility of mining East Ridge before Cave Block 2, or even advancing a second production front in parallel to the main underground development at Red Chris.
"We might get an entire macro block cave just out of East Ridge that could change the whole sequence of the block cave that we're developing," said Duhe.
The interim CEO said this will likely result in "decades of production" from block cave mining at Red Chris.
And the company continues to find gold and copper mineralization even further east.
Hole RC876, drilled about 200 meters east of the East Ridge exploration target, cut 274 meters averaging 0.45% copper and 0.67 g/t gold from a depth of 998 meters, including 42 meters averaging 1.1% copper and 1.5 g/t gold.
This new discovery at what has been dubbed Far East Ridge has the potential to become the fifth zone of mineralization along the Red Chris porphyry corridor. Follow-up drilling is planned for 2024.
Newcrest also reports increased production at Brucejack, a high-grade gold mine about 100 miles (160 kilometers) south of Red Chris that Newcrest bought full ownership of last year.
Brucejack produced 79,907 oz of gold during the second quarter, a 14% increase from the 70,160 oz during the prior three-month period.
Despite the improved quarter-over-quarter performance, the gold output at Brucejack was lower than Newcrest expected. The company says the lower production was driven by lower than anticipated gold head grade, which averaged 6.65 g/t gold.
Newcrest continues to implement a three-phase strategy to unlock the full potential of Brucejack and the district-scale property this high-grade gold target is located on. This included expanding the mill throughput to 4,500 to 5,000 metric tons per day, a roughly 18% to 32% boost to the current 3,800 t/d processing rate.
Newcrest believes that much of this mill throughput increase can be achieved by simply eliminating bottlenecks in the current process, making this a potentially low-cost, high-reward gold production initiative.
A prefeasibility study on the mill throughput increase is slated for completion before the end of the year.
Newcrest reported that its resource expansion drilling at Brucejack cut the bonanza-grade gold intercepts this Northern BC project is famed for.
Resource expansion drilling during the second quarter focused on resource expansion within the existing mine area, as well as brownfields exploration targets within 4,000 meters of the underground operation.
During the quarter, Newcrest completed 17,595 meters of drilling in 52 holes. Assays results have been received from five of six fans of drill holes testing the Eastern Promises target and HBX Domain on the east side of the Valley of the Kings deposit currently being mined. Results from the HBX Domain have extended this zone by an additional 210 meters to the east and confirm the continuity of the higher-grade mineralization.
Highlights from the assays results received so far include:
• 13.9 meters averaging 36 g/t (1.16 oz/t) gold in hole VU-5144, including a one-meter bonanza grade subsection averaging 434 g/t (13.95 oz/t) gold.
• 38.5 meters averaging 49 g/t (1.58 oz/t) gold in hole VU-5145, including a one-meter bonanza grade subsection averaging 1,735 g/t (55.78 oz/t) gold.
In addition to underground drilling, Newcrest launched a roughly 23,500-meter surface drill program during the second quarter to test further afield zones.
This surface drilling is planned to test:
• VOK deposit in multiple areas beyond the limits of current underground development, including:
• Flow Dome, a zone about 200 meters east of Eastern Promises that is interpreted as the extension to the HBX Domain.
• Bridge zone, which lies about 400 meters south of the Valley of the Kings.
• West Valley of the Kings and Lookout zones to the west of the current mining area.
• Gossan Hill to Golden Marmot, multiple high-grade gold targets along the 4,000-meter epithermal corridor that extends north from the Valley of the Kings.
An updated resource and reserve estimate for Brucejack is slated for completion in September.
As Newcrest makes headway on expanding production and resources at its Northern BC mines, the Australian company is preparing for its amalgamation with Newmont, which will be the largest gold mining company in the world that will inherit significant exposure to copper from Newcrest.
"The combined group will create a clear global leader in gold production, with increased flexibility in project sequencing and growth optionality, and a market leading position in safety and sustainability," said Duhe.
On July 18, Newmont reported that the Canadian Competition Bureau has issued a no-action letter, which means that the merger with Newcrest has a green light under Canadian competition law.
Newmont is working on regulatory approvals in other jurisdictions for the merger that is expected to close in the fourth quarter.
Newcrest directors and management are 100% on board with becoming a part of the world's largest gold mining company.
"Our Board is unanimously recommending that shareholders vote in favour of the proposal which we expect will be implemented by the end of 2023," the Newcrest interim CEO added.
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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