The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Explorer completes updated economic analysis that moves explorer closer to developing the ABM Mine; identifies new drill targets North of 60 Mining News - November 3, 2023
BMC Minerals proposed mine at Kudz Ze Kayah is expected to be a major Canadian producer of zinc, silver, and producer.
BMC has identified several drill targets adjacent to the existing known orebody at Kudz Ze Kayah.
After getting a conditional green light in 2022 from regulators to advance the proposed ABM Mine at its Kudz Ze Kayah property in Southeastern Yukon, BMC Minerals Ltd. has completed a favorable economic review of its plan for a hardrock operation and developed new exploration targets on the property.
BMC Minerals wants to extract 1.8 million metric tons of zinc, 350,000 metric tons of lead and 600,000 metric tons of copper from the Kudz Ze Kayah deposits located within the traditional territory of the Kaska First Nation over a 10-year span. At peak production, the mine would employ 250 workers.
This ambition, however, reflects only the tip of a figurative iceberg, given the potential size of mineral deposits on the Kudz Ze Kayah property.
The current anticipated production profile of the project positions it as Canada's largest future producer of zinc and silver, and a top 10 copper producer. It also envisions the proposed operation being one of only three mines in the world that is both a top 20 zinc and a top 20 silver producer.
Thus, the proposed mine is viewed as one of Canada's most important critical and forward-facing minerals projects, providing raw materials that are critical to the development of infrastructure and technologies necessary for Canada's transition to a net-zero economy, BMC said in the review.
Situated in the Finlayson District of Southeast Yukon, about 350 kilometers (217 miles) by road from the British Columbia-Yukon border, the project encompasses 35,700 hectares (92,663 acres) of mineral claims and leases controlled by BMC. It consists of multiple properties within a 50-kilometer (31 miles) radius of the ABM deposit.
BMC has spent much of the past eight years acquiring the land package, including the original Kudz Ze Kayah, Pelly, Wolf, Tsa Da Gliza, and Kona properties, which it renamed the Kudz Ze Kayah project.
The company proposes to initially develop the ABM deposit, including both the ABM and Krakatoa zones, which are separated by late faulting. ABM is a polymetallic VHMS deposit containing economic concentrations of copper, zinc, lead, silver, and gold.
Massive sulfide mineralization at the ABM deposit is up to 39 meters thick in the ABM Zone and 22 meters thick in the Krakatoa Zone. It also extends some 800 meters along the known strike and about 500 meters down dip.
Drill coverage, however, remains in the immediate vicinity of the ABM deposit, extending only about 100 meters from the project's estimated mineral resource, while the Krakatoa zone currently remains open down-dip. Recent drilling indicates that the mineralizing system extends at least roughly one kilometer along strike. The up-dip extent of the deposit is truncated by erosion and covered by up to 20 meters of overburden above the ABM Zone and 22-30 meters of overburden above the Krakatoa Zone.
Exploration activity within 2,000 meters of the ABM deposit has identified several drill-ready opportunities that BMC intends to follow up, including the potentially copper-gold rich Feeder Zone.
The ABM deposit currently hosts 18.3 million metric tons of indicated resource (inclusive of mineral reserves) averaging 6.3% zinc, 1.6% lead 0.9% copper, 148 grams per metric ton silver, and 1.4 g/t gold; plus 800,000 tons of inferred resource averaging 7.2% zinc, 1.7% lead, 1.0% copper, 143 g/t silver, 1.2 g/t gold, which forms the basis of the proposed ABM Mine.
A 2020 definitive feasibility study outlined a mine project at Kudz Ze Kayah designed with both open pit (89%) and underground (11%) methods. Ore is to be processed via a conventional single-stage crushing circuit with a semi-autogenous grinding mill and ball mill design. Grinding will be followed by simple froth flotation, with about half of the copper and zinc to be floated using a pre-float system.
The project would produce three concentrates – copper, zinc, and a high precious metals concentrate. Roughly 90% of the first five years of concentrate production have been pre-sold, with the remainder reserved until the project is in production. The copper concentrate will be delivered to smelters in Canada, while the remainder will be exported.
BMC says the ABM deposit includes multiple lodes and multiple zones and styles of mineralization, including massive sulfides and stockwork mineralization typical of volcanogenic massive sulfide deposits. The massive sulfide and stockwork mineralization can be zinc-rich, copper-rich or both and is typically between 15-25 meters in true-width.
The anticipated production profile of the project positions it as a major Canadian producer of zinc, silver, and copper – providing raw materials vital to the development of infrastructure and technologies necessary for Canada's transition to a net-zero economy, BMC said in the economic review.
BMC reported completion of the updated review Oct. 9, saying the analysis incorporates updates on the economic impact of conditions and restrictions imposed in a positive decision issued by the Canadian and Yukon government regulators to allow the company to proceed with development of the mine.
The document also reflects the impact of Canada's Greenhouse Gas Pollution Pricing Act as well as all capital and operating costs using updated labor rates and refreshed quotes provided by suppliers and contractors, all other ancillary (direct and indirect) costs.
"The completion of the updated economic review and its confirmation of the robust economics of the proposed ABM Mine reinforces our view that the Kudz Ze Kayah Project stands unique amongst projects of its type in the world," said BMC President & CEO Scott Donaldson in a statement.
"Future value-adding and de-risking is expected as we progress through the final regulatory processes, project financing, and demonstrate the potential resource growth through exploration, which will (I believe) only elevate the project's attractiveness."
Donaldson called the Finlayson district "truly remarkable."
He compared the area to the Flin Flon district straddling the border of Saskatchewan and Manitoba, observing that Flin Flon has produced copper, zinc, and silver ore for nearly a century.
"We believe the Finlayson district is an order of magnitude larger in both area and opportunity," he said, adding that BMC believes the Yukon district is "something special."
Donaldson further predicted that Kudz Ze Kayah will become "a sustainable mining project that can continue to operate and provide transformational opportunities and benefits for all Yukoners for at least the next generation."
In its earlier analysis of BMC's proposed ABM mine plan, the Yukon Environmental and Socio-economic Assessment Board concluded the Kudz Ze Kayah project will have "significant adverse effects" on, among other things, water, traditional use, and wildlife, primarily the Finlayson caribou herd, whose habitat is, in part, located within the project area.
However, the board also determined the effects can be adequately mitigated, despite objections from the Liard First Nation and the Ross River Dena Council, which voiced opposition to the mine, saying the project's environmental footprint is too big to avoid impacts on caribou.
BMC's management and Yukon government officials have acknowledged that more work must be done to offset the proposed mine's potential negative effects on the environment.
No changes to the company's mineral resource estimate, mine plan or mineral reserve were required for the review.
BMC, meanwhile, completed a 2023 exploration program in which it identified multiple future drilling targets.
The explorer Oct. 23, reported completion of a detailed 3D induced polarization and an unmanned aerial vehicle aeromagnetic geophysical survey at the Kudz Ze Kayah project.
The surveys, carried out by Discovery International Geophysics Inc., with the assistance of Equity Exploration Consultants Ltd, were designed to aid in identifying target areas that may host potential extensions to the ABM deposit.
The IP survey focused on a corridor of interest located on the southern edge of the ABM deposit and trending toward the southwest for about 1,500 meters. It returned numerous elevated chargeability and conductivity responses that are interpreted to reflect potential zones of copper-rich sulfide mineralization within the stratigraphic footwall to the ABM deposit.
A series of multi-component drill targets have been outlined adjacent to the ABM deposit that are ready for testing with diamond drilling.
"We are very pleased both to have successfully completed the next planned phase of exploration work and at the quality of the results achieved," said Donaldson in reporting the results. "It appears that we have identified/confirmed multiple prospective drilling targets within this highly prospective area adjacent to the existing known orebody. We will now move to finalize planning for a drilling program that is aimed at testing for extensions to the known ABM mineralization," he added.
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