Vancouver Halting an update to a feasibility study while conceding that its proposed Tulsequah polymetallic mine looks uneconomic sent shareholders in Redcorp Ventures (RDV-T) running for cover today. The Vancouver-based company’s shares plummeted by over 42% on heavy volume to close at an even dime.
The company’s proposed flagship mine is situated 100 km south of Atlin in northwestern British Columbia.
Redcorp says it has requested engineers, Hatch and AMEC Americas to curtail further work on the update study, pending a decision on the way forward. The decision came after preliminary indications pointed to increased capital and operating costs for the project for which resources were lowered in recent months.
The recent resource estimate done by AMEC in February was based on a net smelter return cut-off of $10 per tonne and used optimistic spot metal prices of US$1.40 per lb. for copper, 40 US/lb. for lead, 57/lb. for zinc, US$420 per oz. for gold and US$6 per oz. for silver.
AMEC pegged the massive sulphide deposit at 5.38 million tonnes grading, 6.73% zinc, 1.41% copper, 1.32% lead, 2.73 grams gold and 100.8 grams silver per tonne in compliance with NI43-101. Inferred resources stand at 1.5 million tonnes grading 1.13% copper, 1.07% lead, 5.44% zinc, 85.1 grams silver and 2.23 grams gold per tonne.
By comparison, the 1997 resource calculation for Tulsequah was much higher with an estimated 7.6 million tonnes grading 6.63% zinc, 1.31% copper, 1.24% lead, 105.20 grams silver and 2.51 grams gold per tonne.
Redcorp says it is considering whether to expand the resource base or try to reduce capital and operating costs to improve the economic outlook of the project.
The existing feasibility study was looking at a 2,500 tonne per day underground mine, mill and flotation processing plant producing a gold-rich gravity concentrate as well as zinc, lead and copper concentrates.
The 160-sq.-km property which last saw production in the 1950s, was acquired from Teck Cominco (TEK-T). A royalty of 10 per dry short ton of ore milled is payable on the Tulsequah and adjacent Big Bull properties.
The project has been fraught with obstacles since Redcorp has tried to get mining under way after receiving its approval certificate from the B.C. government in 1998. However, most of the problems centered on native issues surrounding the project, most of which appeared to have been settled.
In November 2004, the Supreme Court of Canada upheld a decision on the adequacy of aboriginal consultation for the Tulsequah mine project. The Tlingit natives had complained that there was not proper consultation on the government’s part when the approval had been given.
The band appeared to be most concerned about the construction of a 160-km access road from the mine to the town of Atlin through its traditional territory. Their legal position was upheld by the British Columbia Court of Appeals, which ruled that the province had failed to meet its duty to consult with and accommodate the Tlingit.
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