Engineering & Mining Journal

JUL 2014

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10 E&MJ; • JULY 2014 www.e-mj.com REGIONAL NEWS - U.S. & CANADA West Raglan is an advanced explora- tion project, where $50 million has been spent on exploration, including the drilling of more than 200 diamond drill holes. Seven zones of Ni-Cu-PGM sulphide have been found to date on the 700-km 2 property. One of these zones, the Frontier Zone, includes five key high-grade lens clusters. Teck Chooses Fine Instead of Pipeline at Red Dog Teck Resources announced on June 5 that its subsidiary Teck Alaska Inc., operator of the Red Dog zinc-lead mine in Alaska's far northwest, made a filing with the U.S. District Court for Alaska outlining the find- ings of extensive studies into a proposed 52-mile pipeline that would direct effluent from the mine to the Chukchi Sea. Based on the studies, Teck Alaska informed the court that it was exercising its option not to build the pipeline. The effluent pipeline study was con- ducted under a 2008 Settlement Agree- ment and Consent Decree that resolved lit- igation under the Clean Water Act. Under the agreement, Teck Alaska agreed to review the feasibility of constructing a pipeline to carry effluent from the Red Dog mine along the DeLong Mountain Trans- portation System (DMTS) to a marine dis- charge at or near the DMTS port site. Teck Alaska conducted engineering, geotechnical, environmental and other studies to look at various pipeline options at a cost of $1.7 million. The studies determined that an underground pipeline is not a technically feasible option because it would be vulnerable to breakage due to ground movement caused by seasonal ground freezing and thawing. The studies also determined that an above-ground pipeline is not a viable option. While potentially technically feasi- ble, the above-ground pipeline would result in no demonstrable environmental benefits, the Tech announcement said. Rather, there would be increased environ- mental risks and impacts associated with pipeline construction and operation, ener- gy use and emissions, and potential effects on caribou migration. Further, the estimated $261 million capital cost of an above-ground pipeline would be prohibitive, Teck said. As stipulated in the Consent Decree, Teck will pay a civil penalty of $8 million in connection with its decision not to con- struct the pipeline. "Following extensive environmental and technical study, it is clear that a pipeline is not a viable option," Henri Letient, general manager, Red Dog Operations, said. "More importantly, there is no clear environmental benefit to building a pipeline, as the treated water currently being released to Red Dog creek meets stringent permit requirements and is fully protective of aquatic and human health. In fact, the creek is demonstrably healthier than it was before mining com- menced, supporting a thriving fish population because of our water treatment program." Red Dog's production of metal in con- centrates in 2014 is expected to be in the range of 500,000 to 525,000 mt of zinc and 95,000 to 100,000 mt of lead. Kaminak's Coffee Project PEA Foresees Significant New Yukon Gold Mine Kaminak Gold has reported the results of an NI 43-101-compliant preliminary economic assessment (PEA) of its 100% owned Coffee heap-leach gold project 130 km south of Dawson City, Yukon, Canada. The study indicated that the project could become a significant gold producer, yielding close to 450,000 oz of gold in its first two years of operation and producing an average of 167,000 oz/y over an 11-year mine life at all-in sustaining cash costs of $688/oz. The Coffee PEA envisages an owner- operated, open-pit mine targeting 53 mil- lion mt of primarily oxide facies material at an average diluted grade of 1.23 g/mt gold. The study incorporates a three-stage crush- ing circuit and a valley fill heap leach facil- ity designed by Knight Piésold, along with a standard carbon-adsorption gold recovery plant to produce a total of 1.86 million oz of gold doré over the life of mine. Initial capital costs to develop the Coffee project are estimated at C$305 mil- lion, including a 15% contingency. The Coffee PEA is based on an indicat- ed and inferred mineral resource estimate derived from 961 diamond core and reverse circulation drill holes completed from 2010 to 2013 for a total of 185,000 m. The estimate includes 719,000 oz indi- cated in 14 million mt grading 1.56 g/mt gold, and 3.43 million oz inferred in 79 million mt grading 1.36 g/mt gold, using a base-case cut-off of 0.5 g/mt gold for oxide and transitional material and 1 g/mt gold for sulphide material. The base case assumes an owner-oper- ated open-pit mine, three-stage crushing to a nominal 12.5 mm, a valley-fill heap leach facility, and a carbon adsorption gold recov- ery plant to produce gold doré. Other assumptions include access to site via an all-season road and diesel power genera- tion. Total installed power, including pro- cess equipment and other site infrastruc- ture, is estimated to be 5 MW. The average operating power demand is 3.6 MW. The proposed heap-leach processing rate of 5 million mt/y was used, along with deposit and pit geometry constraints, to estimate the mining equipment fleet need- ed for the project. The fleet has an esti- mated maximum capacity of 90,000 mt/d total material moved, which would be suf- ficient for the life-of-mine plan. Ucore's Rare Earths Project Gets Alaska State Support Alaska Gov. Sean Parnell has signed legis- lation authorizing the Alaska Industrial Development and Export Authority (AIDEA) to provide financing to Ucore Rare Metals' Bokan-Dotson Ridge underground, rare earths elements project on Prince of Wales Island in southeast Alaska. The legislation authorizes the AIDEA to issue bonds to finance the infra- structure and construction costs of the Bokan-Dotson Ridge project up to a principal amount of $145 million, subject to its own internal due diligence and board approval. Ucore completed a preliminary econom- ic assessment (PEA) of the Bokan-Dotson Ridge project in January 2013 and expects to complete a feasibility study in the first half of 2015. Current planning calls for adit access and underground mining at a rate of 1,500 mt/d, using trackless equipment and longhole stoping with paste backfill. The PEA considered the following major processing circuits and their nominal pro- cessing rates: primary crushing (1,500 mt/d); secondary crushing (1,500 mt/d); screening to remove the minus-1/4-in. fraction; X-ray mineralized material sorting (1,125 mt/d); tertiary crushing (750 mt/d); rod mill grinding (750 mt/d); magnetic separation (750 mt/d); tower mill re-grind- ing (375 mt/d); leaching (375 mt/d); and solid phase extraction (9.2 mt/d). Initial capital to develop the project is estimated at $221 million. The Bokan-Dotson Ridge project's pro- duction of rare earth oxides is forecast to average 2,250 mt/y during the first five years of full production, including 95 mt of dysprosium oxide, 14 mt of terbium oxide and 515 mt of yttrium oxide. Mine life is estimated at 11 years based on an April 2011 resource estimate. 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