Craving Copper

fischer.felix57

Craving Copper

| Mining in B.C.

Areial view of

Stuart Bulk Mill terminal.

CRAVING

COPPER

Castle Resources sets sights on reopening Granduc mine

By Marilyn Scales

The Granduc mine near Stewart, BC, was a proven producer.

When it operated between 1971 and 1984, it produced 420

million lb of copper. The chances of reopening are good.

New owner Castle Resources of Toronto has outlined millions

more reasons to redevelop the underground mine and mill.

Castle acquired the Granduc property for the bargain price of

$4 million from Bell Copper in July 2010 and immediately began

the hunt for additional resources. By the end of the year, drilling

had extended the known strike and confirmed that significant

copper mineralization remained below the mined-out areas.

In February 2011, the 43-101-compliant indicated resource

was 3.75 million tonnes grading 1.59% Cu and containing 131.4

million lb of copper (using an 0.8% Cu cut-off). In addition, the

inferred resource is 15.8 million tonnes grading 1.36% Cu and

A close look

at Granduc core.

containing 471.5 million lb of copper. The estimate was prepared

by SRK Consulting (Canada).

So far there are more than 600 million lb of newly identified

copper at Granduc – expressed another way, there were over 600

million reasons to push the project forward.

The blue-sky potential of the property is vast. There may be as

much as 100 million tonnes of mineralization on the property. The

North zone, where some of the inferred resource has been drilled,

is open both to the north and at depth. North of the North zone lies

the untested JK zone. Below the Main zone that was previously

mined, Castle has identified indicated resources and, under that,

inferred resources. The potential of the Main zone continues at

depth. There is also the South zone that lies under the nearby Leduc

Glacier, an area that was recently targeted as part of Castle’s comprehensive

30,000 meter program in 2011.

As well as outstanding geological resource potential, the

Granduc project shares many of the benefits of being a brownfield

development. Infrastructure is available, as well as access to the

mine, a 17-km haulage tunnel to the mill site and a 50 km access

road to the port in Stewart. There are several options for tailings

management currently being analysed. Castle is also working on a

power supply with BC Hydro.

Start in the middle

The first step toward reopening the Granduc mine was to rehabilitate

the 17-km-long tunnel between the mine and the mill.

The tunnel provides both access to the mine and a means of moving

ore to the mill at Granduc. Work is well advanced, and the

$5-million project was completed earlier this month by Procon

18 | Canadian Mining Journal • January 2012 www.canadianminingjournal.com


Mining and Tunneling. Because the original rail line was

removed, the rehab work was done with trackless equipment. But

Castle is considering building a new rail system as the most economic

means of moving the ore to the mill.

At the helm of Castle Resources is industry veteran Mike

Sylvestre. With mining engineering degrees from both McGill

University and Queen’s University, he worked for Inco in the

Sudbury Basin and at the Casa Berardi gold mine. Most recently he

was CEO of Vale Inco’s Goro nickel project in New Caledonia. He

was also president at Vale Inco Manitoba and vice-president at PT

Inco in Indonesia. With his executive appointment at Castle

Resources in June 2011, he settled his family in Port Hope, Ont.

So why join a copper junior?

“It’s a very different experience for sure”’ Sylvestre admits. “There

is less bureaucracy and more entrepreneurism involved which is

a change that I enjoy. I am much more aware of how juniors work

and how they create value for shareholders”.

His efforts have been successful. Castle has raised nearly $30

million for the Granduc project. The company raised $10.3 million

in October 2010, $12.3 million on February 2011 and

another $6.0 million in October 2011.

Sylvestre told CMJ that the pre-production capital expenditures

for the Granduc project will probably be in the $400 million

range. That number will be firmed up when SRK Consulting

completes the scoping study later this year.

With the tunnel readied, underground rehabilitation will be carried

out in three stages. Exploration drill stations will be established

on the 2475 level and below to continue drilling the main zone.

Drilling of the North zone and Castle also envisions a new South

zone exploration drift below the Leduc Glacier.

Granduc was mined by previous owners Newmont Mining

and Esso Resources using sublevel caving techniques. Castle

intends to do the same at a rate of 8,500 tonnes of ore per day.

The mill, located at the east end of the tunnel, was decommissioned

when the mine closed in 1984; the mill has to be rebuilt.

Processing will likely include primary and secondary crushing,

SAG and ball milling followed by flotation in large cells, and

perhaps column cells. Conceptual costs are expected to be in the

neighbourhood of US$1.50/lb of copper produced before byproduct

credits.

The project will likely recover between 80 million and 100

million lb of copper annually.

Historically, Granduc produced a very clean 29% to 30% Cu

concentrate, and that is anticipated when the new mill is operational.

Copper recovery is expected to be 95%. Concentrates were

sold to Asian customers, and that may again be the case.

The way forward

Castle believes a workforce for Granduc can be attracted back to

the town of Stewart with its long history of mining. The population

is low now, perhaps less than 200, but the town has a school,

a medical clinic and recreation centre. The Granduc mine and

mill will create 250 to 300 well-paying jobs for miners and the

families that will come with them.

Sylvestre said there are no land claims registered against the

Plenty of activity in the

Le Duc core shack.

mine site. The company has complete mineral tenure.

Nonetheless, Castle has opened a dialogue with the Nisga’a

Nation and discovered it can provide many supply chain opportunities

and a pool of skilled workers.

The last hurdle is raising the $400 million necessary for redevelopment.

That is a challenge for any junior company, but

Sylvestre says there are options. Castle might raise the capital on

its own, depending on the strength of the financial markets when

it comes time. Another option might be to sell 20% or 25% of the

project to an off take partner. Decisions such as those remain in

the future.

If Castle can stick to the timeline it has set for the Granduc

project, 2012 will be a busy year. It has planned 15,000 metres of

underground drilling, receipt of the preliminary economic

assessment and start of the feasibility study. Permitting will also

get underway. Next year activity will ramp up with the beginning

of construction in preparation for the first concentrate production

in 2016.

CMJ

A picturesque look

at the winter camp

located near the

tunnel portal.

January 2012 • Canadian Mining Journal | 19

More magazines by this user
Similar magazines