Vancouver – Copper Canyon Resources (CPY-V) has released an updated resource estimate for the Copper Canyon project in northwestern British Columbia that shows slightly lower tonnage and grades.
The gold-copper project, a 40/60 joint venture between Copper Canyon and NovaGold Resources (NG-T, NG-N), sits on the doorstep of the Galore Creek copper-gold-silver deposit. Drilling at Copper Canyon stopped in 2007 when construction at Galore was suspended, but an updated estimate was not released until now.
The old resource, based on 21 holes drilled between 1990 and 2004, stood at 164.8 million inferred tonnes grading 0.35% copper, 0.54 grams gold per tonne and 7.15 grams silver per tonnes using a 0.35% copper equivalent cutoff.
The updated resource, based on a further 16 diamond drill holes completed by NovaGold between 2005 and 2007, has 152.6 million inferred tonnes grading 0.31% copper, 0.52 grams gold and 6.32 grams silver using the same cutoff.
R.J. Morris of Moose Mountain Technical Services, who prepared the resource estimate report, wrote that “one a property wide basis, the mineral resource compares favourably, with a reduction of approximately 7% in tonnes, 13% lower copper grades, 4% lower gold grades, and 12% lower silver grades.”
Mike Labach, investor relations for Copper Canyon, explained that some of the assumptions of the initial estimate fell out leading to a lower total, but the confidence in the deposit has significantly improved.
“It really confirmed and brought the understanding of that deposit up greatly,” said Labach in a phone interview.
The company plans to spend about $1 million this year to drill a further 4 or 5 holes, testing to depth and along strike. Labach said this year’s program is in part intended to increase the tonnage of the resource.
Copper Canyon Resources was spun off from Eagle Plains Resources (EPL-V) in 2006 to facilitate a joint venture for the Copper Canyon project. NovaGold earned a 60% stake in the project by issuing 300,000 shares to Eagle Plains and spending $3 million on the property, which it completed in 2007.
NovaGold had the option to earn a further 20% interest in the project by making a payment of $1 million within 90 days of exercising the first earn-in option and completing a feasibility study within eight years, but the company decided not to exercise that right.
Copper Canyon’s fate is closely tied to the Galore Creek project that sits roughly 6 km west of its property. When NovaGold and 50-50 joint venture partner Teck Resources (TCK. B-T, TCK-N) announced in November 2007 that they were suspending construction on Galore Creek, Copper Canyon’s stock plunged from a high of $1.62 down to roughly 40¢. Labach said he still remembers the exact time and place he heard the news.
In January of this year, Copper Canyon’s stock jumped from around 16¢ to a 52-week high of 40.5¢ after NovaGold stated in a press release, buried in a series of project updates, that it and Teck were “considering a more aggressive program for 2010 to advance the project towards a constructive decision.” NovaGold has since announced that a pre-feasibility study is underway for Galore Creek.
Copper Canyon’s share price stayed steady on the news, closing at 27¢ with 52 million shares outstanding.
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