Prospects excellent for new mine development in B.C.

While British Columbia’s mining industry has seen some tough economic times in past years, there is still plenty of optimism regarding new mine development.

Many companies are pushing forward with exploration, while others have advanced their projects to stages of seeking regulatory approval. For example, Geddes Resources (TSE) is awaiting comments from the provincial mine development steering committee on its stage-one report following some revisions. The company owns the rich Windy Craggy copper project which is being proposed as a large copper mine processing 22,000-33,000 tons of ore per day.

The steering committee’s review will be incorporated with field data for stage two which the company hopes to have ready by this autumn, or shortly thereafter.

At the same time, the project located in the northwestern corner of the province involves an Alaskan port facility and U.S.-Canadian transport of commodities by pipeline; Geddes is therefore dealing with U.S. federal and Alaskan state regulatory agencies as well.

Permit applications to these U.S. authorities are being prepared and should be ready for submission by June to facilitate the U.S. review process. The company has spent $40-$50 million proving up the property and collecting data for studies and reports.

Placer Dome (TSE) has also been busy outlining details of its advanced Mount Milligan gold-copper project in meetings with communities in north-central British Columbia. The company’s stage-one report was submitted to the government in mid-April, with approval-in-principle expected to come in the summer of 1991.

The proposed mine, an open-pit, bulk-mining operation, will be located 50 miles north of Fort St. James, and the projected startup date is mid-1993 with about 450 employees.

The work force will swell to 800 during the peak phase of construction which, assuming a positive production decision, could begin in late 1991 and continue for 20 months. The proposed development will demand an investment of an estimated $400 million.

Eskay Creek, the darling of the Vancouver Stock Exchange, is also moving into the advanced stages of mine planning. The project is located about 50 miles north of Stewart.

Corona (TSE) holds 49.8% of Prime Resources Group (VSE) which in turn holds 50% of Eskay Creek. Corona also holds 45% of Stikine, which has the other 50%, while Placer has a 45.3% interest in Stikine.

According to Placer’s annual report, the deposit contains (by Stikine’s estimates) reserves of 6.49 million tons grading 0.535 oz. gold and 14.13 oz. silver per ton. Placer Dome also reported that its discussions with Corona (now broken off) were aimed at increasing its interest in the project. There will be lots happening this year at Eskay Creek. By mid-May, Prime and Corona expect to have completed bulk sampling on site, and this should pave the way for the feasibility study to begin.

The company is targeting a June, 1992, date to submit its stage-one report to the government. Tentative approval is awaited on permits to begin the first stretch of highway construction to the mine site. This 20-mile stretch runs from Hwy. 37 to Volcano Creek and it is hoped it will be completed before winter.

The Silver Butte (SB) project northwest of Stewart is expected to begin mining in May, assuming all goes as planned. A smaller operation, it will run through to October when the deposit, more than 100,000 tons, is expected to be exhausted.

No site construction is anticipated because ore will be trucked for milling to Westmin Resources’ (TSE) mining operation nearby.

Westmin has earned a 50% interest in the SB project, which it will operate, from Tenajon Resources (VSE). The underground operation has cut and diluted reserves of 105,830 tons grading 0.29 oz. gold and 1.92 oz. silver, plus some values in copper, lead and zinc.

The Red Mountain gold property near Stewart is under exploration by a Canadian unit of Bond International Gold (NYSE). Bond’s major shareholder is LAC Minerals (TSE).

A total of $3.4 million was spent on the 1990 exploration program with 65 holes for a total 1990 figure of 43,800 ft. of drilling.

Gold mineralization outlined from the 1990 program is reported to have extended the Marc zone over a strike length of about 800 ft. Exploration has outlined an uncut geological (preliminary) resource of 933,000 tons grading 0.37 oz. gold.

The project is only in its early stages of exploration, and the deposit is still open in several directions. The property also has other targets that remain to be tested. Further exploration is anticipated in the 1991 summer season; company officials had little information to release. The project is one of the more interesting recent discoveries in northwestern British Columbia; however, indications are it may have some potential for acid generation.

In 1990, Placer Dome accelerated exploration of the Kerr copper-gold property acquired in 1989. It is located in the Sulphurets camp, north of Stewart. A $3.8 million exploration program was carried out to confirm previous data and gain further site information. Drilling has confirmed the presence of 138.6 million tons of material grading 0.62% copper and 0.008 oz. gold. Within this deposit, a higher grade zone is inferred of 64.9 million tons grading 0.9% copper and 0.01 oz. gold.

The Sulphurets project, owned 60% by Newhawk Gold Mines (TSE) and 40% by Granduc Mines (TSE), is also located within the “Golden Triangle.” In March, Newhawk and Granduc announced a $1.5 million surface exploration program on the 32-square-mile property. It will focus on two target types; bulk tonnage deposits and high grade vein systems.

Previous work had focused on underground development of the West Zone and the 1991 program will be the first thorough investigation of the bulk tonnage targets. The western portion of the Sulphurets claim block contains a large area (about 1.2 miles by 2.5 miles) known to host at least four major bulk, open-pit type gold and copper-gold targets.

This area lies within a belt that runs northerly over a total distance of more than six miles. Placer’s Kerr deposit mentioned above lies across the Sulphurets valley at the southern end of the belt.

Although still in the early stages, the SIB claim located south of Eskay Creek is expected to see an active season this year. The project is a 50-50 joint venture of Silver Butte Resources (VSE) and American Fibre (VSE). American Fibre drilled 20 holes in 1990 totalling 10,135 ft. and showing some impressive gold and silver results, especially in hole 90-30. This year exploration will continue at SIB with a planned commencement date of June.

It will involve step-out drilling of the 1,600-ft. long Lulu geophysical anomaly in which the initial test hole (90-30) returned a 46.9-ft. intercept of siliceous graphitic exhalite mudstone assaying 0.42 oz. gold and 30.9 oz. silver.

Further work is also projected to continue on the Marguerite anomaly. The company is negotiating financing and expects to carry out a multi-stage $3.5 million exploration program this summer.

Some new developments are in the works for the Tulsequah Chief polymetallic massive sulphide project 80 miles south of Atlin. Redfern Resources (TSE) recently announced it is acquiring Cominco’s interest in the project, which should give the junior 100% control of the former producer. Cominco is believed to have backed out of the project in order to concentrate on a recently discovered large copper-gold deposit in Alaska.

Redfern plans to take on a new major as a partner, with a view to help fund an aggressive drilling program this summer. Details are not yet available, but are expected soon.

The South Kemess copper-gold project in the Toodoggone district is also shaping up as an important new mineral project in the province. It recently attracted the attention of Rio Algom (TSE) and the Bob Dickinson-Bob Hunter team of Mount Milligan fame. Both parties plan to help fund juniors active in the project through private placement and/or merger arrangements. El Condor Resources (VSE) is involved in several projects in the region, however most of its efforts have been focused on the South Kemess and Ron 4 claims where 22 holes were drilled last year with promising results. In 1991, the company will do further work on the South Kemess and Ron 4 claims, which will include IP work and then an extensive drilling program. No dollar figures have yet been released.

El Condor also plans substantial work on the whole Kemess project in 1991. This includes drilling in the North Kemess which will be comparable to activity anticipated within the South Kemess areas.

El Condor and Kennecott (in a 60-40 joint venture) can earn a 60% interest in the South Kemess properties which are jointly held by St. Phillips Resources (VSE) and affiliate Stork Resources. Ownership arrangements vary in the North Kemess area.

Jean Sorensen is a Vancouver-based freelance writer.