Red Chris mine gets mine permit

May 4th the province issued a mine permit for Imperial Metals Red Chris project.  The project first entered the EA process in 1995 but that go around was officially withdrawn from the process in 2003 but was effectively withdrawn in 1998.   The ore body has been known about since the 1950s and was extensively explored in the 1970s.

Red Chris finished the BC Environmental Assessment process in 2005 and finished the Canadian one in 2006.   The plan was for the mine to be operating by 2006, but this has not happened.   One thing that is improving the feasibility of the project is the Northwest Transmission Line, though it ends at Bob Quinn Lake, some 115 kilometres away.

The mine is the heart of the Tahltan country and only 25 kilometres from Iskut.  Dease Lake is a further 65 kilometres north of there.   The Tahltan have not endorsed the project, but they have also not spoken against it.   The project should mean an increase in business and population in both Dease Lake and Iskut which have a current population of about 800.

The mine has a projected life of 28 years, so if it opens in 2014 or 2015, it should operate through to about 2043.  

The mine will employ about 300 people directly, these salaries alone will be worth $30,000,000 a year.  It is hard to estimate how many more people will be indirectly employed because of the mine, but it will be a significant number.

The mine will produce about 85,000,000 pounds of copper per year and 95,000 ounces of gold per year.  That is a gross annual income of  $465,000,000 based on the prices of copper and gold today.  The estimated cost to build the mine is about $443,000,000.

The opening of this one mine alone will have a noticeable impact on provincial revenues.   The province should recoup the $561 million cost of the Northwest Transmission line before 2020 from increased tax revenues alone.

The 2011 Exploration and Mining in BC report is out - looks 2011 was a record year for exploration in BC

Each year January the BC government releases the review of mining and exploration for the previous year.   The 2011 edition is out now.

Highlights:
Exploration Expenditures - (2010 figures in brackets):

• Omenica Region           $71.5 million ($33 million)
• Skeena                  $220 million ($172 million)
• Northeast                $41 million ($20 million)
• Thompson-Okanagan-Cariboo 2011 data incomplete($50 million) 
• Coast                    $16 million ($15 million)
• Kootenay-Boundary        $38.5 million ($28 million)

In the five regions with complete data, exploration spending in 2011 was $387 million, an increase from $268 in 2010.  Given all the work in the Thompson-Okanagan-Cariboo in 2011, I can not see how exploration expenditures would not be higher than 2010.   If was assume the same increase as elsewhere, this would indicate $72 million for the Thompson-Okanagan-Cariboo and an annual provincewide expenditure of around $460 million.

It looks like 2011 was a record year for mineral exploration in BC, beating out the previous record of $416 million in 2007.  Adjusted for inflation, the 2007 value would be $450 million.

To give you an idea how good 2011 was we can look at 1990.   1990 was a a good year for exploration in BC with $227 million spend, that is equal to $340 million in 2011 dollars.  

Operating Mines in BC by year and exploration expenditures

• Year    Metal    Coal  Exploration $
• 2004      7       9       130
• 2005      8       9       220
• 2006      9      11       265
• 2007     11      10       416
• 2008     10       9       367
• 2009      8       9       154
• 2010      9      10       322
• 2011     10      11       460 est

I would go back further, but the data is not as easy for me to access.   If I get it I will post.

Observations on the 2011 Exploration Roundup

I was over in Vancouver yesterday at the 2011 AME Exploration Roundup, I was asked to provide some postings for the Core Blog.  Here is what I offered them:

I attended Roundup each year from 2001 to 2007 and then I took a four year break before coming back this year. Normally from year to year there are only incremental changes. Having taken a break has allowed me to see there are some significant changes to the Roundup.

First Nations are much more in evidence now than even five years ago and much more than 10 years ago. For way too many years the mining industry viewed the First Nations as an opposition group and not as partners. Dan Jepsen, who was at AME BC from 2002 to 2008, spent a lot of time and energy building a new attitude towards First Nations and it is very much in evidence at Roundup this year.

It is crucial in BC that companies have a good social contract with the nearby First Nations. For far too long many mining juniors did not take this seriously which has lead to problems down the road for many a promising project. The fact we are seeing leaders from First Nation communities at the Roundup means the sort of two way positive relationship needed to allow projects to move forward here in BC are happening. I am also happy to see that more and more aboriginal people are seeing mining as an important future for their communities.

Another change I saw this year compared to the past is a shift among who the exhibitors are. There has been a shift away from mining juniors to many more companies supplying services to industry. The Cambridge House Investment Show down the way at the Trade and Convention Centre seems to be where a lot more of the mining junior promotion is going on than at the Roundup. I only had a day to be in Vancouver and heavy schedule of people to see, so I did not get a chance to check out the Cambridge show.

With the exhibitors being much more about the suppliers than the mining juniors, from what I could see there were a lot more company executives and geologists were talking with each other. It seemed to me in the past that often many of the mining juniors at the Roundup were doing a lot of investment relations and not spending the time informally talking as members of the industry.

I have to admit that this shift makes it harder for me to track down people from specific companies and talk with them about what I do and how I might help them but that is my problem. Next year I will have to spend several days there so that I can spend some time at the evening receptions.

The one final observation I have is about the ability of Roundup to cope with the size of the event. Has it become too big to continue at the Westin Bayshore or is it time to move to a larger venue?

2010 Mineral Exploration Numbers are Out

In 2010 companies spent $322,000,000 on exploration in BC, this is more than a doubling from 2009 when it was only $157,000,000.  This is still below the figures for 2008 ($367,000,000) and 2007 (abt $430,000,000).

What needs to kept in mind that that a lot of this exploration expenditure was at existing mine locations or advanced projects close to production.   As an example, Mount Milligan had $33 million spent on it in 2010.

In the last six years $1.8 billion dollars as been spent on exploration in BC.   What is important in this spending is that a lot of the money is going on the work needed to move mines into production or keep them in operation.  

In the last few years large scale mines have been bogging down in trying to get through all the regulatory hoops.  What has been working not badly has been the small mine program.   The Shasta gold mine in the Toodoggone by Sable Resources that pulled out 700 ounces gold equivalent - $960,000.  Eagle Plains Resources has done much the same with the Yellow Jacket Project in the Atlin area.

In general there are about six of seven major mines that could very well be operating within the next couple of years.   New Afton, Cooper Mountain, Mount Milligan, Kitsault, Dome Mountain, and Kemess North (now as an underground project) are all clearly moving towards production.   This represents the biggest expansion in new mines in ages in this province.

It will be interesting to see what the mood is like at the AME Exploration Roundup when I go there tomorrow.

NovaGold releases an interesting report

NovaGold Resources, owners of the Galore Creek project in the northwest of BC just to the east of the Stikine River, has released their sustainability report.    It is interesting reading and the first time I have seen something of this caliber for a company that is more of an exploration outfit than a global mining giant.

Here are the principles the work to:

The principles of NovaGold's approach:

• We respect Native Alaskan and First Nation groups and encourage continuous collaboration, so that their relationship with the land and the expertise gained from other mining operations adds value to our plans and processes.
• We catalyze local and regional economies in the near and long term by identifying and developing resources in a way that considers the long-term impacts and benefits of operations.
• We strive to reduce the risk of permitting delays by working closely with the appropriate government agencies and maintaining and nurturing collaborative working relationships with our aboriginal and community partners to identify a responsible, critical path for development.
• We believe long-lasting social and economic benefits can flow to the communities in which we operate.

I am reasonably certain their approach is a corporate codification of their experience with the Tahltan.

I am sure there are people out there that will call this greenwashing, but that is short sighted.   The very fact the company is talking about this, is willing to express their approach to environmental issues, is talking about needing a social license to operate, says a lot about where we are at in 2010.

Province Issues Environment Assessment Certificate for the Prosperity Mine

The Prosperity mine is located near Taseko Lake in the Chilcotin, it is about 125 km from Williams Lake. It was granted an environment assessment certificate today.

The deposit is a large copper gold porphyry. It has been on the radar of prospectors since the 1930s. The property has been owned by Taseko Mines ltd since 1969. Taseko is not just an exploration junior, they operate the copper-moly Gibraltar mine 75 km northwest of Williams Lake.

The Taseko mine has a 20 year life span at the moment. The capital cost to build the mine is estimated to be about $807,000,000. Employment by the mine is estimated to be about 375 people per year. The mine will produce 247,000 ounces of gold and 108,000,000 pounds of copper per year. At today's gold and copper price, this is over $700 million a year. The mine remains in the black even if the price of both gold and copper drop to one third of where they are now.

Kaska and Hard Creek Nickel Reach Agreement

(Prince George, BC) – Cat Lee, Chief of the Dease River Band Council, Walter Carlick, Deputy Chief of Daylu Dena Council, Donny VanSomer, Chief of the Kwadacha First Nation, Dave Porter, Chairman of the Kaska Dena Council and Mark Jarvis, President of Hard Creek Nickel Corporation (TSX—HNC) are pleased to announce the signing of their “Cornerstone Agreement”. The Agreement is designed to be the foundation of a respectful, cooperative and progressive relationship to facilitate the development of Hard Creek’s Turnagain Project. An integral aspect of this Agreement is that it is based on mutual rights recognition.

For the full news release, please open the following link:

http://www.hardcreeknickel.com/Mailings/OCT1508.pdf

Thank you,

Mark Jarvis
President

HARD CREEK NICKEL CORPORATION

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The TSX does not accept responsibility for the accuracy or adequacy of this news release.

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