Imperial studies $135-million plan for Polley

The alkaline class copper/gold porphyry deposit is found on the Cariboo Bell property located 35 miles northeast of Williams Lake and is jointly owned by the Imperial Metals Group (61.59%) and Corona Corp.(TSE) (38.41%), with Imperial Metals Corp., beneficially holding 34% of the deposit.

“Mount Polley offers good copper and higher than average gold grades capable of jointly supporting a profitable operation,” said Hugh Morris, chairman of Imperial Metals. The company is envisioning a five-million-ton-per-year open pit operation capable of producing 100,000 oz of gold and 32 million lb of copper annually in its initial phase, with gold output decreasing slightly during the later years.

While earlier work between 1964 and 1986 established a geological inventory of some 128 million tons of sub-economic gold and copper grades (0.31% copper and 0.012 oz gold), Imperial’s 1988 program was specifically tailored to test the property’s potential for higher grade reserves within the known, broadly explored mineralized zones.

Last year’s 29,000-ft, 99-hole program concentrated initially on the southern half of the Central zone where prior drilling by Imperial and others had revealed indications of enhanced copper/gold content. Preliminary ore reserves as estimated by Mintec Inc. of Tuscon, Ariz., are now reported to be 53 million tons grading 0.44% copper and 0.017 oz gold per ton (sufficient for a 10-year mine life); calculations which incidentally are in agreement with Imperial’s own in-house estimates.

“We have a high degree of certainty about our reserve numbers,” said Zarko Nikic, Imperial Metals’ vice-president mineral exploration, in a recent meeting with The Northern Miner. “To date 389 holes have been drilled into this project for a total of 155,154 ft.”

Imperial said all reserves are calculated to a maximum pit depth of 400 ft in the Central zone, and 500 ft in the West zone, with a cut-off grade of 0.3% copper recoverable equivalent across a minimum intersection of 30 ft.

The three zones are separated by narrow regions of low grade mineralization and can be mined from a single open pit. Imperial noted that the property has relatively gentle topography, which combined with the geometry of the deposit, will allow an over-all stripping ratio of 2:1.

The South Central zone, which has higher than average gold grades combined with a better strip ratio (a good portion of the zone outcrops right on surface), is the obvious choice to be mined first. The pit would then be extended north along the Central zone and west into the West zone.

Copper recovery is expected to average 72% and gold recovery 82%, after allowing for the presence of some oxidation in the ore which reduces on copper recoveries as the ratio increases. Nikic estimated that of the total tonnage, about 70% is less than 10% oxidized, and 85% falls within the parameters for copper to be economically recovered. Gold recoveries, however, are only moderately affected by increases in copper oxide content.

Imperial Metals plans a $1.5-million program for 1989 which includes metallurgical testing to confirm results and to aid in mill design, permitting, and 30,000 ft of drilling. While some of the drill program is “condemnation drilling” aimed at outlining sites for waste dumps and a mill, some will be exploration-oriented, aimed at testing other targets on the large and relatively unexplored 13,000-acre property.

By the end of the summer of 1989, the company expects to have completed its work program and gathered sufficient information to make a production decision. Capital costs have been estimated at $135 million and a preliminary appraisal of the project indicates it would have about a 3.1-year payback based on a conservative copper price of 87 cents per lb and $425(US) gold.

While few companies would be capable of raising the sizeable funds required to bring onstream a 15,000-ton-per-day mining and milling project, the Imperial Metals Group is a diversified and well financed organization, while partner Corona is an established and significant gold producer.

“As with all large tonnage projects, the Mount Polley deposit is sensitive to commodity prices and exchange rates,” said Hugh Morris. “However, with a substantial portion of total revenues resulting from gold sales, we see a strong stabilizing element in the revenue generating capacity of this classic porphyry deposit.”

The Mount Polley project is accessed by a paved road to within 10 km and by a good logging road for the remaining distance, however, it is not serviced by power.

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