By Rob Robertson
Houston, B.C.
The latest in a recent spate of mine openings British Columbia
testifies to the robustness of the province's mining industry.
On hand for the opening of the Huckleberry copper mine was British
Columbia Premier Glen Clark, who proclaimed to the more than 100
invited guests: "This is the third major mine to open in the province in the
past four weeks. We have not seen this much activity in British Columbia
for over 20 years."
Huckleberry, an open-pit operation in the province's west-central
region, is operated by Huckleberry Mines, which is 60%-owned by
Princeton Mining (PMC-T) and 40% by its Japanese partners.
The ribbon was also recently cut at Imperial Metals' (IMP-T) Mt. Polley
copper-gold mine and Wheaton River Minerals' (WRM-T) Golden Bear
gold mine.
"I want to thank the Japanese partners for their faith in B.C. and for their
investment," Clark continued. "I was in Japan two years ago, before I
became the premier, and met with Mitsubishi, as well as Marubeni, and
promoted this particular project, which was then in the early stages of
permitting -- a difficult , stage for all of us. It was good faith on the part
of the Japanese, real hard work on the part of the company and Jim
O'Rourke [chairman of Princeton] in particular, and hard work by civil
servants on behalf of the government. It is that kind of partnership we
need to continue to attract investment and jobs in B.C."
Production at Huckleberry commenced in September. "The first ore
went through the mill only 15 months after the start of construction," said
mine manager Emile Brokx. Fine-tuning of the 18,000-tonne-per-day
mill is expected to take a year and a half. Once in full operation,
Huckleberry is expected to produce, on an annual basis, 37,000 tonnes
of copper and 670 tonnes of moly, as well as 7,000 oz. gold and
380,000 oz. silver.
Operating cash costs, net of byproducts, are forecast to average US65
cents per lb. copper over the life of the mine. Ore will be delivered to
the mill at the daily rate of 16,440 tonnes, or 6 million tonnes per year.
The consortium of Japanese investors is led by Mitsubishi Materials and
includes Dowa Mining, Furukawa and Marubeni. The Japanese
companies purchased a 40% interest in Huckleberry in 1996 for US$6
million and agreed to provide a US$60-million project loan, as well as
contibute their 40% portion of the additional equity funding required to
place Huckleberry into production.
Capital costs, as outlined in the feasibility study prepared by H.A.
Simons, are estimated at $137 million, including $4.5 million in working
capital.
The British Columbia government provided a $15-million loan to finance
construction of roads, power lines and port facilities. At the mine
opening, The Northern Miner learned that the government's loan was
crucial in securing the participation of the Japanese partners.
Clark has been criticized for providing the loan to Huckleberry, but he
insisted: "The B.C. government has to show the world that we're
committed to promoting mining in the province. We also have to show
the Japanese that the government stands behind a project like this. The
government's investment here is not a subsidy but a demonstration of the
faith that we have in mining in B.C."
The Huckleberry mine is nestled on a small plateau on the southern side
of Huckleberry Mountain, north of Tahtsa Reach on the Techako
reservoir. The mine site is 130 km south of Smithers and can be reached
by a 2-hour drive from Houston, 86 km to the northeast.
Mineral reserves are contained in the Main and East zones. Based on
the feasibility study, minable reserves are calculated at 90.4 million
tonnes grading 0.51% copper and 0.014% moly, plus 0.06 gram gold
and 2.81 grams silver per tonne, using a cutoff grade of 0.3% copper.
The waste-to-ore stripping ratio averages 1-to-1.
The combined geological resource of the two deposits is 162 million
tonnes grading 0.47% copper and 0.014% moly.
Starter pit
The deposits will be mined by conventional open-pit methods using
electric drills, shovels and 86-tonne diesel-powered haulage trucks. The
East zone will serve as the starter pit for the first two years. It contains a
minable reserve of 66.1 million tonnes grading 0.52% copper and
0.014% moly, plus 0.06 gram gold and 3.04 grams silver, at a stripping
ratio of 1.23-to-1.
The starter pit provides higher-grade ore that will generate high revenues
in the early years of the mine.
>From the second to the seventh year, mining will be focused on the
Main pit, where minable reserves stand at 24.2 million tonnes grading
0.48% copper and 0.013% moly, plus 0.07 gram gold and 2.18 grams
silver, with a stripping ratio of 0.8-to-1.
In year seven, mining will revert back to the East pit.
While both deposits remain open at depth, they are bounded by
economics.
Environmental co-rdinator Carl Bottaro said that as much as 20 million
tonnes could be added to the minable reserves without increasing the
stripping ratio. He said this could be achieved by lowering the cutoff
grade to 0.26% copper.
Because of the high-sulphide nature of the mineralization, waste rock
from the East pit has been classified as potentially acid-generating and
will therefore be hauled to waste dumps and used to backfill the
mined-out Main pit prior to being covered with water to prevent acid
drainage.
Most of the waste rock from the Main zone is classified as
non-acid-generating and will be used in the construction of the tailings
dam, which is being carried out in stages. The dam, which to date has
been completed to an elevation of 1,016 metres, was designed as a
closed system with no discharge to the environment. The mill will reclaim
about 70% of its water needs from the impoundment.
The dam will reach a height of 1,086 metres upon completion.
Two concentrates
The mine will produce two concentrates: a copper concentrate
containing gold and silver byproducts, and a moly concentrate. Copper
recoveries are expected to average between 92% and 95%, whereas
moly recovery is projected to be 67%.
Recoveries for gold and silver are estimated at 45% and 54%,
respectively.
The mill utilizes a straightforward grinding and flotation process, with a
design capacity of 18,000 tonnes per day. Ore is trucked to the primary
crusher, where it is reduced to an approximate size of 15 cm. Apron
feeders beneath the coarse ore stockpile feed the material to a
semi-autogenous grinding mill and then through a second stage of
grinding in one of two ball mills.
The ground ore is then directed to the flotation circuit as a slurry. The
metal-bearing minerals float to the top, are skimmed off, collected and
concentrated. The concentrate is then dewatered, filtered and dried. The
copper concentrate will contain about 27% copper, along with the gold
and silver credits. The ore is not complex, said John Miller,
vice-president of operations. Chalcopyrite is the predominant mineral; a
minor amount of bornite is also present.
The concentrate is trucked to the port of Stewart for shipping overseas
to Japan. Princeton's Japanese partners agreed to purchase the mine's
entire production of copper concentrate with fixed terms for the first five
years.
Stockpiling of ore began in July, and the primary crusher commenced
operation at the end of August.
To date, 410,000 tonnes of ore have been mined from the East pit. The
grade is 5% higher than projected and tonnage is 2% higher.
The copper circuit is up and running, and some tonnage has been
processed through the mill. The moly circuit is 90 to 95% complete and
will be operating within a month.
Cash cost projections of US64 cents per lb. are based on an average
daily throughput of 18,000 tonnes and a copper recovery of 92.6%.
At full production, the mine will directly employ 170 people, plus an
additional 40 people indirectly under full-time contracts.
History
Exploration at Huckleberry started more than 35 years ago. The Main
zone was originally discovered by Kennco Explorations in 1962
following the investigation of anomalous stream-sediment samples
collected during a regional geochemical survey in 1960. Kennco
explored the property through to 1972 and completed a 29-hole
program of diamond drilling spanning 3,965 metres.
The property was optioned in 1972 to Granby Mining, which completed
a further 65 holes totalling 16,910 metres within the Main zone.
Kennecott Canada optioned the Huckleberry property to New Canamin
Resources in 1992. New Canamin initially concentrated its efforts on
definition drilling within the Main zone and commenced environmental
baseline studies.
It was during this period that condemnation drilling, as part of a tailings
site investigation, intersected 8 metres of 0.91% copper at the bottom of
what was to be a 41-metre-long discovery hole into the East zone,
1,200 metres east of the Main zone.
The discovery of the East zone essentially tripled reserves at
Huckleberry.
New Canamin continued to advance the project until 1995, when the
company merged with Princeton. Financing and permitting were in place
by May 1996 and construction began on the 8-km connector road in the
spring of 1996.
The Huckleberry property is underlain by early to middle Jurassic
volcanic and sedimentary rocks of the Hazelton group. Mineralization
occurs predominantly in the andesitic, pyroclastic volcanic rocks of the
Telkwa formation and, to a lesser extent, in Cretaceous-aged intrusive
phases.
The East and Main zone deposits are centrally situated in a 5-km-long-
by-2-km-wide, elliptically shaped, east-west-trending area of propylitic
alteration. Mineralization occurs in a steeply dipping stockwork zone
containing abundant sulphide vein and fracture fillings, with lesser
disseminated sulphides. A pyrite envelope extends well beyond the
boundaries of economic mineralization.
The Main zone is kidney-shaped and extends for a length of 500 metres
and a width of 150 metres. It is partly open along its northern boundary.
The easterly trending East zone is 900 metres long and up to 300 metres
wide. It is cut on two sides by post-mineral faults.
Enviornmental challenge
Huckleberry was the first major project to undergo a joint assessment
under the Federal Environmental Assessment Act and the British
Columbia Environmental Assessment Act. However, the issuance of the
development certificate by the provincial government is being challenged
in the courts by the Sierra Legal Defense Fund on behalf of the Cheslatta
Carrier Nations and the Office of the Wet'swet'en Hereditary Chiefs.
The petition was filed against the British Columbia government, alleging a
lack of due process relating to the environmental assessment of
Huckleberry. Hearings were conducted in the B.C. Supreme Court in
February and April of this year. The court has reserved judgment and
has asked all parties to sit down to mediate their concerns.
Princeton investor relations officer Susanne Gallant does not expect the
legal challenge will affect the project as production is already under way.
Princeton has 110 million shares outstanding, or 144 million shares fully
diluted, with cash on hand totalling $1 million. |
