Vancouver — Reminiscent of the 1970s, copper exploration has once again taken centre-stage in the hunt for metals in British Columbia.
Sparking the revival are higher prices and a new discovery made by
Lying only 1.5 km northeast of the Bell pit, all of the holes, excluding one that was abandoned, hit significant mineralization over the 275-metre area tested. The latest results include hole 14, which returned 169 metres grading 1.06% copper, 0.37 gram gold and 6.65 grams silver per tonne, hole 15, which returned 135 metres of 1.16% copper, 0.35 gram gold and 9.58 grams silver, and hole 167, which returned 112.3 metres of 0.63% copper, 0.2 gram gold and 4 grams silver.
The mineralization remains open, with hole 15 marking the southernmost hole.
The new zone is hosted in the same type of hydrothermal breccia as the other three deposits (Cariboo, Bell and Springer) on the property, but magnetite is lacking, actinolite is sporadic, and secondary biotite appears to be the dominant alteration mineral associated with the higher-grade values. Drilling will resume on the zone later in November.
Imperial has now moved the rig over to what was originally thought to be the most promising target, expanding the resources below the Springer and Bell zones.
The unmined Springer zone, which holds 15.3 million tonnes of probable reserves grading 0.4% copper and 0.39 gram gold, lies 2 km northeast of the new find. Imperial has laid out four holes for the current program.
The first hole of the program marks the deepest penetration of the zone to date. The hole returned 0.49% copper and 0.36 gram gold per tonne over 466.3 metres. The upper, 202.5-metre section of hole 1 lies within the previously defined pit limit, whereas the lower 267.5 metres, starting at the bottom of the initial pit design, returned 0.61% copper and 0.49 grams gold.
The junior then plans to sink four holes below the Bell pit, which holds probable reserves of 3.4 million tonnes grading 0.36% copper and 0.36 gram gold.
Based on the exploration success, Imperial has entered into a bought-deal financing comprising 2.35 million units priced at $4.25 each. A unit holds one share and half a warrant. A full warrant is exercisable at $5.50 for two years.
Shares in the junior recently traded at $5.20, giving the company a market capitalization of $103 million.
Taseko
Nearby,
In August 2000, a scoping study concluded that the proposed refinery would result in a 22% reduction in copper production costs by eliminating the cost of transporting concentrate to offshore processing plants, thereby reducing smelter charges and achieving greater mine site efficiencies. Mine startup and refinery construction costs are estimated to be $120 million.
Gibraltar operated for 27 years, until 1998, when it was closed by then-owner Boliden Westmin because of low copper prices. Sulphide resources, using a 0.2% copper cutoff grade, stand at 745 million tonnes containing 4.7 billion lbs. copper. Included in this estimate are measured and indicated resources of 149 million tonnes grading 0.31% copper and 0.01% molybdenum in the 12-year mine plan, plus additional measured and indicated resources of 596 million tonnes grading 0.28% copper and 0.01% moly. The project also has in-pit, oxide resources suitable for processing in the existing solvent extraction-electrowinning plant.
Under an agreement between Taseko, Gibraltar and the GESL partnership, Taseko and Gibraltar can acquire the business of the partnership for a defined purchase price, which reflects a 30% premium over the GESL Partnership’s expenditures (expected to be equal to 90% of the offering amount) on the defined work program. Taseko and Gibraltar may fund the purchase by paying cash or by issuing shares.
In July, the junior launched a 2,600-metre drill program to test several areas adjacent to the previous porphyry copper deposits on the property. The company has not released any of the results.
More recently, Taseko reached agreements in principle for a private placement of 6.7 million units priced at 60 for gross proceeds of $4 million. A unit holds one share and one warrant exercisable to buy an additional share at 75 for two years. The financing is expected to close in early December.
Taseko recently traded at $1.05 per share, generating a market capitalization of some $50 million.
Fjordland
Moving 40 km northeast of Imperial’s ground,
Shares in Fjordland recently closed at a new 52-week high of $0.21, giving the junior a $3-million market capitalization.
Eastfield
Another player in the region is
The project covers what is believed to be a buried alkalic intrusive system outlined by the so-called Jajay magnetic ring.
Eastfield can earn up to a 75% interest by spending $4 million on exploration, paying $550,000 in cash or shares, and completing a feasibility study.
The company recently added some $600,000 to its till by placing 4 million units at 12-15 each. Stock in the junior recently traded at 21 for a market capitalization of $6.3 million.
bcMetals
Northwest of Lorraine,
The junior just added $5.25 million to its coffers through a bought deal with Haywood Securities. The private placement comprises 3.5 million units priced at $1.50 each. A unit holds one share and half a warrant. A full warrant entitles the holder to buy an additional share at $2.50 for three years. Haywood has the right to acquire 350,000 shares at $1.50 per share for six months from the closing date.
Earlier this year, the junior picked up Teck Cominco’s 10% working interest and a 10% carried interest in the property, as well as back-in rights to 43.75% of bcMetals’ 80% interest. The price tag is $300,000 and 250,000 warrants at closing. The warrants are exercisable at 60 until the end of 2006. In addition, bcMetals must issue a total of 1.5 million shares with 1.25 million warrants in 2004. The warrants have an exercise price at a 20% premium to the market price at the time of issuance in the first year, a 40% premium in the second year, and a 50% premium in the third. BcMetals must also pay the major $1 million within one year of the start of commercial production.
At the end of the day the company will own all of the project, subject to American Bullion Minerals’ 30% reversionary interest, which becomes effective after bcMetals has recovered all its costs from production. American Bullion can acquire its pro rata portion of the Teck interest by paying 30% of the total
A $3.6-million drilling program is under way: bcMetals is sinking 41 infill holes into the East and Main Zones, which host a measured resource of 11.8 million tonnes grading 0.85% copper and 0.77 gram gold, using a 0.5% copper cutoff. The area has an indicated resource of 37.5 million tonnes grading 0.69% copper and 0.57 gram gold, plus an inferred resource of 28.2 million tonnes grading 0.61% copper and 0.5 gram gold.
The currently delisted American Bullion worked the property in the 1990s using a total resource of 550 million tonnes grading 0.32% copper and 0.25 gram gold, based on 244 drill holes and a cutoff grade of 0.2% copper.
Because of low metal prices, the company elected to look at mining the higher-grade core, which is estimated to contain 210 million tonnes of 0.46% copper and 0.38 gram gold. Daily throughput was projected at 30,000 tonnes over a 20-year mine life.
BcMetals has a market capitalization of $22.3 million and recently traded at $1.36 per share.
At the Galore Creek deposit, the first four holes of a recently completed, 3,000-metre drill program has returned the favourable values for newly minted
The first-pass program is designed to confirm and identify higher-grade zones that could be traced. In total, four areas of the deposit were tested: the North Gold Lens, South Gold Lens, the Central Replacement Zone, and the Southwest Breccia.
The company picked up the historic project earlier this year by inking a deal with mining giants
The price tag for the project is US$20.3 million payable over eight years, with US$300,000 due in the first three years.
Galore Creek is a classic alkalic intrusive-related gold-silver-copper deposit that has been worked since the early 1960s. A 1992 estimate by Kennecott Exploration, a subsidiary of Rio Tinto, pegged the measured and indicated resource at 243.2 million tonnes grading 0.45 gram gold and 6 grams silver per tonne, plus 0.75% copper. The inferred resource was estimated at 70.6 million tonnes grading 0.63 gram gold, 6 grams silver and 0.59% copper. A 1997 provincial government report gave the Central zone an indicated resource of 233.9 million tonnes grading 7 grams silver, 0.35 gram gold, and 0.67% copper, based on a cutoff grade of 0.27% copper-equivalent. The Southwest zone has an indicated resource of 42.4 million tonnes grading 7 grams silver, 1.03 grams gold and 0.55% copper, whereas the North Junction zone has 7.7 million tonnes grading 1.5% copper in the indicated category, based on a 0.4% copper cutoff.
SpectrumGold, a 56%-owned subsidiary of
In order to maintain its 56% stake, NovaGold has agreed to buy 2.08 million shares of its subsidiary, plus another 500,000 shares at $3.45 per share. The $14.4-million financing is expected to close on Nov. 20.
The junior, with 20.9 million shares outstanding, has a market capitalization of $69.3 million and recently traded at $3.30 per share.
Northgate
In September,
Plans call for development of an open-pit operation in 2005, with prestripping to begin a year later. By the fourth quarter of 2006, ore would be crushed and milled to minus half an inch and sent south 7 km to Kemess South’s mill and flotation circuit.
Northgate expects the Kemess North and South pits to be running in tandem beginning in late 2006. The annual mining rate is projected to be 50 million tonnes; annual mill throughput, 25 million tonnes. Kemess North’s life-of-mine stripping ratio is pegged at 0.6-to-1.
The development of the deposit could extend the mine life in the Kemess camp to 16 years. Based on the study, Kemess North and South will crank out 283,000 oz. gold from 2004 through 2009 at a cash cost of US$173 per oz. The initial capital cost of developing Kemess North is US$126 million.
The mineable resource came in at 369 million tonnes grading 0.34 gram gold and 0.18% copper. The estimate is based on a gold price of US$325 per oz. and a copper price of US95 per lb.
A final feasibility study is under way and scheduled for completion in the first quarter of 2004.
Northgate trades at around $2.60 per share, giving the company a $512-million market capitalization.
Based on the rising stock price,
Over the past few years,
The project is only 65 km north of Northgate’s Kemess mine, and its main asset is the Southeast zone, which hosts a resource of 5.3 million tonnes grading 1.87% copper, based on a cutoff grade of 0.7% copper. Of this amount, 3.6 million tonnes grading 1.88% copper are classified as measured, 1.5 million tonnes averaging 1.88% copper are indicated, and 121,000 tonnes grading 1.78% copper are inferred.
Procon intends to mine the ore on a contract basis, with Northgate processing the material at the nearby Kemess mine site. Plans call for the Sustut material to be blended with that of Kemess.
The 50,000-tonne-per-day Kemess operation treats material from the Kemess South deposit, which is slated for depletion by 2009. The Sustut material would increase Kemess’s copper production by 40%, as well as increase the grade of the concentrate, improve the quality of tailings, and reduce the amount of steel required in the semi-autogenous grinding mills. Environmentally, the Sustut material is acid-consuming and appears not to leach metals into the environment. Initial scoping studies point to a capital cost in the range of $12-14 million. Based on a copper price of US90 per lb., the project’s internal rate of return would be 69%.
A tabular, volcanic redbed deposit, Sustut was discovered by
Doublestar trades at around 26, giving the company a market capitalization of $7.3 million.
Another company active in the region is
Stealth stands to earn up to 100% of the property, subject to a 3% net smelter return royalty, of which 1% can be purchased for $2 million. To earn a 60% interest, it must spend $5 million on exploration and pay $715,000 in cash to privately owned Electrum Resource by the end of November 2004. At the end of 2002, all payments had been made, and $2.3 million remained to be spent on exploration. Once vested, Stealth can issue 15% of its issued shares to Electrum to acquire the remaining 40% interest, or enter into a 60-40 joint venture with Electrum on a pro rata basis.
The most advanced porphyry gold-copper deposit on the property is the Pine deposit. Situated 25 km northeast of the Kemess South mine, it has been subjected to 47 drill holes (7,889 metres). These holes were drilled between 1979 and 1999 by Rio Tinto (12 holes), Romulus Resources (13 holes), and Stealth (22 holes). The mineralized zone hosts about 160 million tonnes averaging 0.5 gram gold and 0.2% copper per tonne. In 2003, Stealth plans to drill six holes to test an induced-polarization (IP) anomaly east of the previous drilling.
Stealth trades at around 40 per share, generating a market capitalization of $17.5 million.
At
Pacific Booker combined Hearne Hill with Noranda’s Morrison project in a joint effort to define an economic copper-gold porphyry system. The Hearne Hill claims adjoin the Morrison property on the eastern side.
Noranda discovered Morrison in the 1960s, and 95 holes were drilled between 1965 and 1985. Subsequently, the company tabled a resource of 190 million tonnes grading 0.4% copper and 0.2 gram gold.
A recent optimized pit calculation for Morrison came in at 12.4 million tonnes grading 0.53% copper and 0.26 gram gold, using a 0.3% copper cutoff, while the ultimate pit number came in at 62.12 million tonnes grading 0.46% copper and 0.22 gram gold. A feasibility study is under way.
Pacific Booker trades at around $3.30, giving the junior a $14.3 million market capitalization.
Moving 100 km south of Houston in the central part of the province,
Grayd can acquire the property by paying $250,000, issuing 650,000 shares and spending $1.2 million over five years.
The junior recently hit a 52-week high of 25 per share, generating a market capitalization of $6.7 million.
Farther south, longtime British Columbia copper explorer
A newly completed scoping study pegged the proven and probable mineral reserve in the Main zone at 36.9 million tonnes grading 1.15% copper and 0.85 gram gold.
The junior recently closed a 24.15-million bought deal with a syndicate of underwriters consisting of Orion Securities, Dundee Securities and Salman Partners. The deal comprised 3.45 million units priced at $7 each.
The funds are earmarked for underground development work and infill drilling leading to a full feasibility study.
DRC currently trades at around $7.85, for a market capitalization of $72.2 million.
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