Mt. Polley first to get past B.C.’s assessment process

A mine development certificate was recently awarded to Imperial Metals (TSE) for its 100% owned Mt. Polley copper-gold project near Williams Lake, B.C.

The project is the first major new mine authorized under the British Columbia Mine Development Assessment process.

The mine development certificate is for a 15,000-ton-per-day, open pit operation expected to produce 30 million lb. copper per year. Gold production would exceed 100,000 oz. initially, and gradually decline to 50,000 oz. per year in the 10th year.

“This new mine coming on stream means that we are moving to create new jobs and bring new investment to this important sector (mining) of the provincial economy,” said Mines Minister Anne Edwards.

But Imperial Chairman Hugh Morris told reporters the certificate doesn’t translate into an immediate production decision. “We still face three main tasks. We need to complete detailed engineering, negotiate subordinate permits, and assemble a financing package for the project’s capital costs estimated at $150 million.”

The company believes, however, that the government green light eliminates “a significant element of risk” for the project and will help to raise the required mine capital.

The company filed its stage-one report with the government in the summer of 1990. Subsequent efforts to raise financing and arrange joint venture partnership proved to be challenging, however, and were finally put on hold to await the granting of government approvals.

The development certificate covers all elements of the mining plan including the open pit, the processing plant, water supply, tailings pond and a power transmission line to the property. Electricity will come from B.C. Hydro by tapping into Gibraltar Mines’ powerline which starts at the Soda Creek substation north of Williams Lake.

Environment Minister John Cashore noted that the project was approved after a full technical review and public consultation, a process which showed that all environmental impacts can be managed. “The company has been very professional in its approach to the review process,” he added. Some concern was expressed about the use of water from Polley Lake, Cashore said, and strict limits were set, allowing the lake to be raised by no more than 3.2 ft. to ensure enough water is available for both the mine and downstream fisheries. In the case of a

severe drought, Imperial would have to find an alternative source of water or cut back production.

Once under way, mine construction would take about two years. The resulting mine would employ about 160 people, and create positive economic spinoffs throughout the Williams Lake region. Aboriginal communities in the area are expected to benefit from the company’s policy to recruit and train local people.

Based on the feasibility study completed by Fluor Daniel Wright Engineers, Mount Polley has an initial 10-year mining reserve of 54 million tons grading 0.38% copper and 0.016 oz. gold per ton. This deposit is contained within total preliminary reserves of 250 million tons grading 0.256% copper and 0.010 oz. gold.

Mt. Polley is projected to produce copper at an effective price of under 45 cents per lb. (after gold credits), using current metal prices and exchange rates. This includes operating costs, treatment, refining, transportation, freight, marketing and insurance.

Noramco Mining (TSE) holds a 22% net profits interest which takes effect after payback of all exploration and development costs (together with interest on these expenditures at prime plus 2%).