Falling prices can’t stop Sa Dena Hes opening

Despite continued losses from low base metal prices, Curragh Resources (TSE) and Hillsborough Resources (TSE) officially opened the Sa Dena Hes open pit and underground lead-zinc mine southeast of here recently.

Curragh is operator of the joint venture, owned 80% by Curragh and 20% by Hillsborough. Built in a record 10 months despite a severe Yukon winter, the $72.3-million project has become Curragh’s second producing mine to open in as many weeks.

And the day before Sa Dena Hes opened, Curragh moved a step closer to getting a third mine going, too. The company and the province of British Columbia reached an agreement in principle for the province to spend $37 million on offsite infrastructure required to get the Stronsay lead-zinc deposit in northern British Columbia into production. Curragh expects to spend $140 million on Stronsay.

Since 1985, the Faro, Yukon, lead-zinc mine has been the company’s only producing mine. Then, on Sept. 10, Curragh opened the Westray coal project in Nova Scotia. Sa Dena Hes opened on Sept. 24.

Sa Dena Hes, which means Oldtimers’ Mountain, was formerly known as Mt. Hundere. The name change reflects heavy involvement by the Kaska Tribal Council, which has negotiated an option to acquire 5% of the project within three years. It also has a guarantee of 30% of the mine’s 130 jobs for its members.

Compared to Faro, Sa Dena Hes is small. It is expected to produce 150,000 tonnes of lead and zinc concentrates annually for nine years from a yearly mill feed of 550,000 tonnes.

“It’s not extremely large, but it does produce a high-quality of concentrate,” said Curragh Chairman Clifford Frame during opening ceremonies. “It’s the only mine I know where we’ve had to dump rock in to knock the grade down to put through the mill.”

The first ore to be taken from the site had a combined zinc and lead grade of 30%. Concentrates contain an average of 60% zinc at a metal recovery of 90%, and 70% lead at a metal recovery of 93%.

Sa Dena Hes is about 45 km north of the town of Watson Lake and is accessible via the Robert Campbell Highway and a 25-km access road.

The property sits in the Liard River Basin between the Pelly and Selwyn Mountain ranges. It covers most of a 9-km block of Lower Cambrian sedimentary rocks up-faulted into sedimentary rocks of Silurian to Triassic age. The predominant rock type is a grey-to-black phyllite with limestone, which hosts the mineralization.

A series of four skarn-type deposits — Jewelbox Hill, Gribbler Ridge, Burnick and Attila — contain preliminary reserves of 4.8 million tonnes grading 4% lead, 12.7% zinc, and 59 grams silver per tonne with minor amounts of cadmium.

Lead-to-zinc ratio is 1-to-2 except for the Bumick zone where it is 1-to-30. Curragh says sulphide mineralization consists of medium-to-coarse-grained sphalerite and galena with virtually no iron sulphides. Silver values are associated with galena.

Jewelbox Hill is the first deposit to come into production. About 100,000 tonnes of ore grading 20% zinc and 10% lead have been taken from a small open pit and stockpiled by a 1,500-ton-per-day mill.

Open pit reserves at Jewelbox are now extinguished and underground mining is under way. Workers for Canadian Mine Development, a Hillsborough subsidiary, are using primarily room-and-pillar extraction techniques to remove 1,600 tonnes of ore per day from a single portal standing at 1,408-metre elevation — more than 200 metres above the mill. Ore must be transported 1.8 km downhill. “We’re contemplating a lower access the next couple of years to reduce haulage,” said mine manager Ted Hewitt.

Jewelbox Hill will feed Sa Dena Hes’ semi-autogenous grinding mill until 1994, when the Burnick open pit and the small underground Gribbler Ridge come into production. Gribbler will only last a year, leaving Burnick to supply the mine until 1997 when Attila comes on stream. Both deposits will last until 1999. Exploration continues at a fifth deposit, Porcupine Hill. Infrastructure at the site includes a 6.2-MW powerhouse and a 200-person camp, as well as the mill, tailings pond and water reclamation system. At less than 22% feed grade, the mill is capable of processing up to 2,500 tonnes of ore daily using water from freshwater wells and the tailings reclaim system. Release of effluent from the tailings is prohibited under the mine’s water licence for all but three months of the year, during the spring freshet.

First truckloads of Sa Dena Hes’ concentrates left the mine Aug. 1 in custom-designed B-train tractor trailer units. It takes 25 hours for each truck to travel from Sa Dena Hes to the Alaskan port of Skagway and back again. From Skagway, concentrates are shipped to smelters in Europe and Asia. Frame said the opening of Sa Dena Hes heralds Curragh’s future development into the world’s third or fourth largest supplier of lead and zinc. On the same day Sa Dena Hes opened, Curragh announced provincial government approvals and a $37-million grant for the Stronsay lead-zinc deposit in northern British Columbia.

Curragh lost $24.7 million in the first six months of this year, and is in the process of raising $55 million in a private placement secured on the cashflow from Westray. The money will be used primarily to assist the ailing Faro mine. Frame said he’s “reasonably optimistic” that zinc and lead prices will improve over the next six months.

Sarah Davison is a freelance reporter based in Whitehorse, Yukon.