The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
North of 60 Mining News - April 5, 2024
Drilling has outlined 145.2 million metric tons of measured and indicated resources grading 2.36 g/t (11 million oz) gold in the Courageous Lake deposit.
Amid the recent surge of interest in mining lithium and rare earth elements, some companies exploring the Northwest Territories remain focused on gold. Seabridge Gold Inc., for example, is revisiting its long-held Courageous Lake Gold Project more than a decade after shelving an initial mineral resource estimate and preliminary economic assessment of the venture in 2012.
Situated in the shadow of Northwest Territories' huge diamond mines, Courageous Lake covers 50,228 hectares (124,113 acres) of federal and territorial mineral leases and mining claims that trend north-south over the 54-kilometer- (34 miles) length of the Courageous Lake Greenstone Belt in the Slave Structural Province.
Seabridge acquired the core mining leases in 2002 in an agreement with Newmont Canada Ltd. (51%) and Total Resources (Canada) Ltd. (49%). Newmont and Total retain royalty and other interests in the property.
The Courageous Lake property includes two historical mining operations – the Salmita gold mine operated by Giant Yellowknife Mines in the mid-1980s, and the Tundra mine operated by Royal Oak Mines during the 1960s.
In February, Seabridge filed a new technical report that includes results of an updated independent preliminary feasibility study (PFS) and a new preliminary economic assessment (PEA) that considers potentially expanding the Courageous Lake open pit envisioned in the mine plan completed 12 years ago.
The 2024 PFS, completed by independent consultants, reflects a more sustainable and profitable mining operation than its 2012 predecessor, according to Seabridge Gold Chairman and CEO Rudi Fronk.
The new study features a 50% reduction in required initial capital, a lower strip ratio, higher grades and a smaller mine footprint.
Fronk also said Courageous Lake is a profitable project in the current market environment for several reasons, including its location in a safe jurisdiction and its "considerable exploration upside."
"As we move towards a joint venture on our KSM project (in northern British Columbia), we will be directing more attention to Courageous Lake's potential to generate considerable additional shareholder value," Fronk said in a statement.
Seabridge is currently redesigning the large-scale project outlined in the 2012 PFS to determine if a streamlined, less capital-intensive design with a smaller footprint could improve economics and enhance the permitting process. Various mine development and mine operating plans are being tested to maximize the value of the project.
The company said these analyses are ongoing and will inform additional field programs upon completion.
The 2024 PFS estimates production of 2.5 million oz of gold over an initial 12.6-year life of mine at an average annual rate of 201,000 oz of payable gold per year, Seabridge said.
Notable improvements in the 2024 PFS compared to the 2012 PFS include:
• A 73% increase in after-tax net present value (NPV) at 5% to US$523 million, from US$303 million in 2012.
• A 50% reduction in initial capital from US$1.52 billion to US$747 million.
• An increased after-tax internal rate of return from 7.3% to 20.6%.
• A substantially reduced capital payback period from 11.2 years to 2.8 years.
• Average gold reserve grade increased 19% from 2.2 g/t to 2.6 g/t.
• Life of mine strip ratio reduced by 39% from 12.5 to 7.58.
• 38% increase in estimated measured and indicated gold resources from 8 million to 11 million ounces.
The 2024 PFS open pit mine plan would produce 2.5 million oz of gold over 12.6 years with a base case after-tax NPV (5% discount) of US$523 million.
This is based on 33.9 million metric tons of proven and probable reserves averaging 2.61 g/t gold, feeding a 7,500 t/day processing plant.
Average life-of-mine cash operating costs are US$863/oz, and all-in sustaining costs are US$999/oz.
The 2024 PFS mine plan envisions an open pit truck and shovel operation; mill feed will be processed onsite by crushing, grinding and flotation; and flotation concentrate will be pressure oxidized and cyanide leached to produce a gold doré.
Waste rock will be generated during the mining of economical ore and will be directly hauled to a co-placement storage facility along with flotation tailings. The tailings will be co-placed with waste rock, while neutralized leach tailings will be placed in a separate facility.
The Courageous Lake project includes two deposits – Courageous Lake and Walsh Lake. Only Courageous Lake was included in the PFS.
The resource was estimated using information from 616 drill holes, from which Seabridge tested 127,169 meters of core. Based on the 2024 PFS (using a base gold price of US$1,850 per oz), the project's measured and indicated resource totals 145.2 million metric tons grading 2.36 g/t (11 million oz) gold. The inferred portion is 40.6 million metric tons grading 2.52 g/t (3.3 million oz) gold.
The Walsh Lake deposit has an inferred resource of 4.1 million metric tons, grading 4.18 g/t 554,800 oz) gold. These numbers are derived from a separate preliminary economic assessment that Seabridge completed for a potential underground expansion below the Courageous Lake pit.
Fronk said Seabridge views the Courageous Lake project as a second valuable 10-million-plus-ounce gold resource in its portfolio.
The new PEA, which evaluates a potential extension of the proposed mine, establishes the potential for a much longer mine life for the project.
"The PFS uses less than 30% of the estimated M&I gold resource (at Courageous Lake). The PEA includes inferred resources requiring more drilling as well as additional engineering work to qualify as a PFS. However, we are confident that the PEA reflects the potential for a greatly extended mine life and that the entire estimated M&I resource represents a meaningful call on gold for our shareholders," he added.
A mine at Courageous Lake could be accessed via a spur winter road connecting with the Tibbitt to Contwoyto Winter Road, which is normally open from late January or early February until the end of March each year and services the nearby Ekati and Diavik diamond mines.
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