Vancouver — The latest resource estimate for Western Keltic Mines’ (WKM-V, WLKTF-O) Kutcho polymetallic project in north-central B.C. is in, boosting the site’s resources in advance of a feasibility study due by year-end.
Kutcho holds three deposits, of which the largest is the namesake. According to the new estimate, the Kutcho deposit holds measured and indicated resources of 15.7 million tonnes grading 1.65% copper, 2.15% zinc, 26.13 grams silver and 0.32 gram gold per tonne.
The other two deposits (Esso and Sumac) are smaller and less thoroughly defined. Esso contains 2 million indicated tonnes of 2.24% copper, 3.96% zinc, 37.7 grams silver, and 0.49 gram gold, and Sumac adds 10.6 million inferred tonnes at 0.94% copper, 1.45% zinc, 13.96 grams silver and 0.14 gram gold.
Estimate updates were based on the results of a fall 2006, 1,870-metre drill program focused on the eastern end of the main deposit, where the open pit of the proposed mine would start. The resource estimate used a 0.75% copper-equivalent cutoff grade, with equivalent grades based on 5-year average metal prices, anticipated recoveries, and average smelter terms.
The Kutcho property, located 100 km east of Dease Lake, covers part of the regional-scale Kutcho Formation. Metals are contained in volcanogenic massive sulphide (VMS) deposits within a 4-km-long, gently plunging linear trend. Unlike most VMS deposits, the Kutcho property deposits have not been broken up by significant folding or faulting, resulting in consistent assay results without the need for tightly spaced drilling.
A prefeasibility study is already under way, and Western Keltic has initiated the B.C. environmental assessment process.
The property was first discovered in 1968 by Imperial Oil, which later became Esso Minerals Canada. Over the next 40 years, various companies took on the project and exploration advanced slowly. In 1985, Imperial Oil, working with Sumitomo Metal Mining of Japan, completed a prefeasibility study. Copper prices were too low for the project to be economic at the time, and plans were dropped.
Western Keltic acquired the project in March 2004. Over the next two years, the company explored the property aggressively, releasing an updated resource estimate each January. In June 2006, Keltic closed a $5.8-million private placement, and in February 2007, the company closed a $9.97-million private placement. Keltic said the nearly $10 million raised would be used to complete feasibility studies, mine permitting, and to buy mining equipment.
Two months later, the company announced a $4.2-million summer field program to advance Kutcho, including construction of a 40-person camp, 5,000 metres of drilling aimed at upgrading resources, preliminary work for infrastructure development and improvement to the access road, and environmental, fisheries, and archeology studies to help with permitting.
In April, the company announced a letter of understanding with Tahltan Nation Development, a corporation owned by the Tahltan Nation, on whose land the Kutcho property sits. In the letter, the parties agreed to discuss a contract for upgrading the site’s access road.
According to current plans, the company looks to build a 2-million-tonne-per-year mine during 2008 and begin producing in 2009, with annual production of 36,000 tonnes copper and 39,000 tonnes zinc, as well as 1.35 million oz. silver and 10,900 oz. gold in concentrates. Metallurgical test work indicates recoveries of 90% for copper and 75% for zinc.
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