The British Columbia mineral exploration and development industry appears to be emerging from its long, silent hibernation. Like bears leaving their caves in spring, B.C.-based prospectors and entrepreneurs are stretching and looking for new opportunities.
Fortunately, there are plenty of possibilities all around the province. Like automobiles, there are new mineral projects – often called greenfield assets – and used – brownfields – in which to invest money and time.
Libby Sharman, research associate at the Mineral Deposit Research Unit, a collaborative venture between the University of British Columbia and the mining industry, says brownfield and greenfield projects come with their respective advantages and disadvantages. “For example, they differ according to access and the cost of exploration,” Sharman says. “Greenfield deposits are more difficult and more expensive to get to, but if they pan out, the rewards can be greater than a brownfield project.”
Greenfield or brownfield, there are green shoots of renewed activity in B.C. mineral exploration circles now, says Michael Gray, senior vice-president and team head of Canadian mining equity research, Macquarie Capital Markets Canada Ltd.
Despite the recent slowdown, B.C. remains a good jurisdiction for exploration and mine development, says Gray. “The projects in the best position for development now are those with high margins at spot prices that can be permitted and have relatively low capital costs,” he says.
B.C. has many attractive attributes for mineral explorers and developers: solid infrastructure, improving relationships with First Nations, land-use certainty (for the most part) and very inexpensive energy.
“In addition, the B.C. government has been very supportive of mineral exploration and development,” says Gray. For example, the minister of energy and mines developed a mining plan in 200405 and established revenue-sharing agreements with First Nations. “Successful mines with revenue-sharing have helped to increase acceptance of exploration and development in B.C.,” says Gray.
There are many greenfield and brownfield projects in B.C. that deserve attention. Due to limited space, however, only five will be looked at here. They are, on the greenfield side, Colorado Resources Ltd.’s KSP project, Eagle Plains Resources Ltd.’s Iron Range, and Amarc Resources Ltd.’s IKE project. And on the brownfield side, Pretium Resources Inc.’s Brucejack and Ascot Resources Inc.’s Premier. Apologies to the other fine projects we had to leave out.
Turning fresh sod
The exploration focus of Colorado Resources Ltd. is its KSP property, located southeast of the past-producing Snip Mine in north-central British Columbia and west of Pretium’s Brucejack deposit and Seabridge Gold Inc.’s KSM project.
“We’ve been focused on KSP for the last three years,” says Colorado president and CEO Adam Travis.
The target at KSP is high-grade gold veins similar to the Snip Mine and Pretium Resources Inc.’s Valley of the Kings deposit, as well as bulk tonnage copper-gold mineralization similar to Seabridge’s KSM project.
Colorado Resources has an option to acquire up to an 80 per cent interest in the KSP property with SnipGold Corporation (SnipGold was taken over by Seabridge earlier in 2016).
In October 2016, Colorado Resources announced the final results of the last eight drill holes in its 2016 drill program at KSP. Fifty-nine drill holes totalling almost 9,000 metres were completed at KSP. The emphasis was on the Inel area, where 53 holes were drilled. According to the company’s announcement, Inel drill holes INDDH16-46 to INDDH16-53 returned several high-grade gold intercepts, as well as what Colorado Resources called significant broad intercepts at multiple horizons.
The highest results to date at Inel include 165.5 grams per tonne across one metre, with numerous intercepts greater than 0.5 ounces per ton gold in the one- to five-metre range, as well as a number of very significant longer intercepts (between 50 and 100 metres) of lower grade (between one and three grams) intercepts.
“Our 2016 drill program at Inel has tested on broad centres, approximately 20 per cent of the 1.5-square-kilometre Inel gold geochemical anomaly,” said Travis in an announcement. “These latest results continue to add to the previously released intercepts with multi-ounce gold values along with broader intervals of multi-gram gold values.”
The first phase of 2016 drilling tested portions of the Discovery Trend and southern extensions of the Inel Creek Trend.
“Overall, the 53 Inel drill holes had a 60 per cent success rate in returning high-grade gold intercepts,” said Travis. “Our drilling in these two zones, along with preliminary surface geological mapping, geophysics and geochemistry, highlights six robust-sized target zones.”
Colorado Resources is continuing to advance the technical understanding of the system and incorporate geological, geophysical and geochemical data as it works on cross-sections, and will report on the overall results and their significance once all the technical data has been compiled.
Eagle Plains Resources Ltd. has the Iron Range project, a 70,000-hectare property located east of Creston, B.C., in the Purcell Mountains.
The company says the property overlies the same stratigraphy that hosts the Sullivan sedimentary exhalative (SEDEX) deposit in Kimberley, 65 kilometres to the northeast. A transportation and power corridor, including a high-pressure gas pipeline and a high voltage hydro-electric line, crosses the southern part of the property. A rail line connects the project to the Teck smelter in Trail, 100 kilometres to the west.
The Sullivan Mine contained 160 million tons at 12 per cent lead/zinc and 67 grams per ton silver, valued today at over $35 billion, and had a mineable lifetime of 92 years before it closed in 2001.
“In 2014, for the first time in the project’s then-117-year history, Eagle Plains conducted an evaluation of all available exploration data,” says investor relations manager Michael Labach. “The objective was to generate and rank exploration targets and to move the project forward into a phase of active exploration.”
The program identified three areas of interest and defined exploration targets for Sullivan-style SEDEX base mineralization, precious metal mineralization and iron oxide copper-gold-style mineralization. “If Eagle Plains is successful in locating a significant SEDEX deposit on the Iron Range property, or on any of its other SEDEX target properties in the East Kootenays, this would have major implications for the area,” says Labach.
In addition to making company shareholders happy, finding a deposit would very likely be followed by a rush of companies intent on conducting their own mineral exploration programs. “There would be an upswing in the demand for labour, supplies and machinery that you see associated with booms,” says Labach. “The long-term effect would be the creation of many high-value jobs that would continue throughout the exploration, mining, decommissioning and reclamation cycle.”
Amarc Resources Ltd. is focused on developing the IKE project, a new copper molybdenum-silver discovery that is located 33 kilometres northwest of the historical mining community of Gold Bridge, B.C. The district in which IKE is located has a long history of being explored for copper, molybdenum, gold and silver mineralization.
“We believe that IKE and the surrounding district of high-quality copper (±gold±molybdenum±silver) porphyry targets together have the potential to become the next major bulk copper mining district in B.C.,” says Amarc president Diane Nicolson.
According to Amarc, all 21 holes that have been drilled at IKE have intersected long intervals of chalcopyrite and molybdenite mineralization over an increasingly broad area that measures 1,200 metres east-west by 1,000 metres north-south, extends to depths and remains open to expansion.
Grades that have been intersected compare favourably with the range of copper-equivalent grades at operating B.C. porphyry copper mines. In addition, Amarc’s exploration work in the district has identified at least four significant porphyry copper targets near IKE for drill testing.
To advance the IKE discovery and surrounding district efficiently, Amarc has partnered with Thompson Creek Metals Company Inc. Under the agreement, Thompson Creek can earn up to a 50 per cent interest in the IKE project by funding $15 million of expenditures before December 31, 2019, and, among other things, completing a feasibility study. By completing the funding of the initial $5 million, Thompson Creek has earned its first incremental 10 per cent in the project. Amarc, for its part, is the operator of the IKE project.
Amarc has secured additional mineral claims in the area surrounding IKE to cover other deposit targets as well as potential infrastructure sites.
Nicolson says the timing of the IKE project is ideal. “As the major mine developers begin to look for projects to fill up their depleted development pipelines, and as investment and merger-and-acquisition activity in the mining sector begins to recover, IKE has the potential to attract positive attention and investment to the mineral exploration business in B.C.,” she says.
Comeback kids
Pretium Resources Inc. is constructing a high-grade underground gold mine at its Brucejack project in northern British Columbia north of Stewart. Construction began in 2015 and commercial production is expected to begin in late 2017. The project is fully funded and fully permitted, and construction has passed the halfway point.
Once it is completed, Brucejack will be the biggest operating gold mine in B.C. and one of the largest in Canada. It is expected to produce a total of 7.3 million ounces of gold over an anticipated mine life of 18 years.
“The main focus of the project is the Valley of the Kings deposit,” says Pretium president Joseph Ovsenek.
The Valley of the Kings (VOK) deposit is made up of high-grade visible gold within a lower-grade gold-quartz stockwork system. A feasibility study completed in June 2014 outlined proven and probable mineral reserves in the VOK of 6.9 million ounces of gold (13.6 million tonnes grading 15.7 grams per tonne gold).
The VOK infill drill program continued through 2015 and into the second quarter of 2016. The purpose of the program was to support production planning in the VOK and to convert indicated mineral resources into measured mineral resources in the areas that will be mined in the first three years of the current mine plan.
In July 2016, Pretium said in an announcement that the program was successful in increasing the measured mineral resources in the VOK by 58 per cent, to 1.9 million ounces (3.5 million tonnes grading 17.0 grams per tonne gold). The program also added indicated mineral resources, so that measured and indicated mineral resources in the VOK now total 9.1 million ounces of gold (16.4 million tonnes grading 17.2 grams per tonne gold). The 2016 figure represents an increase from the December 2013 estimate of measured and indicated mineral resources of 8.7 million ounces of gold (15.3 million tonnes grading 17.6 grams per tonne gold).
The VOK is open to the east and west along strike, and at depth.
Ovsenek says the Brucejack project is a sign of success not only for Pretium, but also for the entire B.C. mineral exploration sector. “Brucejack is the only gold mine under construction in B.C. at this time,” he says. “It runs against the negative trend the industry has been experiencing. And it shows that even in a downturn a project can move forward successfully.” Ascot Resources has the Premier property in northwestern B.C. The project, which covers more than 100 square kilometres near the town of Stewart, includes the old Premier Mine, a past producer of 2.1 million ounces of gold and 44.9 million ounces of silver.
“The Premier property is linked with the adjacent Dilworth property,” says Ascot consulting geologist Graeme Evans. “Together they constitute an enormous epithermal system that is similar to the Brucejack deposit. Its amazing continuity means it has both high-grade and bulk tonnage potential.”
Ascot earns 100 per cent of each property on completion of all payments, the last of which is due in June 2017.
Ascot is working on its expanded 2016 drill program at Premier. The company has five diamond drill rigs operating, and it says good results are being returned in all areas. In the latest results that have been announced, Ascot said hole P16-1064 in the West Zone area intersected an uncut average of 76.30 grams per tonne gold over a core length of one metre within a broader interval grading 8.83 grams per tonne gold over 11 metres.
Ascot also received positive results from Premier’s Northern Lights area, which has seen relatively little previous exploration. The latest results from Northern Lights include P16-1078, which intersected an uncut average of 52.30 grams per tonne gold over a core length of 1.15 metres within a broader interval grading 3.02 grams per tonne over 52.50 metres.
“Premier will probably become one of the next projects developed as a mine in northwestern B.C.,” Evans says.
The lesson is clear, he says. “Don’t underestimate the potential of old mines. And don’t be too quick to write them off.”