Dec '07/Jan '08

British Columbia

The boom continues

Mining and exploration stays hot in B.C.

By Brian Grant, Paul Wojdak, John deGrace, Bruce Madu, Dave Grieve, Bruce Northcote and Dave Lefebure, B.C.Ministry of Energy, Mines and Petroleum Resources 

British Columbia continues to be one of the leading jurisdictions for mineral exploration activity and new mine developments.There were over 23 new mine development proposals submitted to government for approval in the fall of 2007. Mineral exploration investments are at record levels and expected to exceed $300 million, up significantly from 2006. British Columbia produced over $6 billion worth of copper, coal, gold, zinc, molybdenum, silver, lead and other metals as well as a growing variety of industrial minerals and structural materials in 2006.

The province’s industry is internationally recognized for its expertise in mineral exploration and mine development. In addition, it enjoys a demonstrated geological potential for new mineral resources, one of the best and most advanced geoscience databases internationally, superb digital access to geoscience information, access to an ample supply of low-cost power, good transportation systems and other physical infrastructure and a strategic location well positioned to serve fast-growing Asia-Pacific markets.

Copper-gold

British Columbia’s mining boom continued with the start of construction, in summer 2007, of the $2.2 billion Galore Creek copper-gold project. NovaGold’s mammoth project requires a 130 kilometre access road and powerline through daunting terrain and a major tunnel from the headwall of Galore Valley to link up with the road. Galore Creek is the largest bulk mineable copper-gold deposit under development in North America.

In the Toodoggone area, Northgate Minerals Corporation continued production from its 52,000 tonnes per day Kemess South porphyry copper-gold deposit. This is one of the largest gold deposits in Canada. With a mill expansion to 49,500 tonnes per day planned for the end of 2008, production at Imperial Metals Corporation’s copper-gold Mount Polley Mine near Likely is expected to increase by over 20 per cent. Recent reserve estimates have extended the mine life to 2015.

In the southern Chilcotin, the Prosperity project of Taseko Mines Limited reentered the Environmental Assessment Act review process. New Gold Incorporated’s New Afton copper-gold project near Kamloops has received its mine permit and is well into mine development, with plans for underground block cave mining and a production target of 2009. Nearby, Abacus Mining and Exploration Corporation continued definition drilling at the Ajax West and Ajax East, as well as at the Comet-Davenport and Rainbow deposits.

Significant other porphyry exploration programs in northwest British Columbia include the Mitchell zone on the Kerr-Sulphurets property (Seabridge Gold) and adjacent Snowfield zone (Silver Standard Mines), GJ (Canadian Gold Hunter), Red Chris (Imperial Metals), Ball Creek (Paget Resources), Bronson Slope (Skyline Gold), Eaglehead (Carmax Explorations), Copper Creek (Firesteel Resources) and Voigtberg (BC Gold).

North of Fort St. James, Serengeti Resources Incorporated continued to have encouraging drill results that led to a step-out program designed to delineate a potential ore body on its Kwanika copper-gold-silver property. Terrane Metals Corporation’s Mount Milligan copper-gold porphyry deposit has measured and indicated resources of 417.1 Mt grading 0.21% copper and 0.41 grams per tonne gold. Feasibility studies are expected to be completed in early 2008. Other companies chasing copper-gold mineralization in the area are Teck Cominco Limited (Jan/Tam/Misty), High Ridge Resources Limited (Chuchi), Solomon Resources Limited (COL-Magnet) and Geoinformatics Exploration Incorporated (Takla-Redton and Mesilinka properties).

Activity in the McKenzie- Prince George-Williams Lake region was spurred in part by Geoscience BC’s $5 million QUEST (Quesnellia Exploration Strategy) program of grassroots geophysical and geochemical exploration in an area of extensive overburden. South of Horsefly, Fjordland Exploration Incorporated continued geophysical exploration and drilling on its Woodjam property. Farther north near Quesnel, Richfield Ventures Limited will begin a drilling program at its Mouse Mountain porphyry copper property upon completion of a planned merger with Oak Point Incorporated. Other companies with major exploration projects for copper and gold in the Cariboo region are Valley High Ventures Limited (Lloyd-Nordic), Copper Ridge Explorations Incorporated (Copper Ace) and Novagold Resources Limited (Shiko).

Near Taseko Lakes, the Taseko (Galore Resources Incorporated), Taseko Project (Great Quest Metals Limited), Tasco (Hi Ho Silver Resources Incorporated) and Newmac (Newmac Resources Incorporated) copper projects all had substantial exploration activity. In the southern Cariboo, GWR Resources Incorporated drilled and trenched the Lac La Hache project.

The Princeton area was particularly active, with Copper Mountain Mining Corporation conducting a very large drill campaign at the Copper Mountain Project aimed at confirming and expanding new resources at the former Similco mine. Nearby, significant programs were undertaken at the Axe (Weststar Resources Corporation) and Princeton projects (Anglo-Canadian Uranium Corporation). Imperial Metals Corporation is following up last year’s positive results at Giant Copper, east of Hope, with a drill program that is expected to continue into the fall. The target is the AM zone, a mineralized breccia pipe that the company is testing at depth.

Molybdenum

The buzz is definitely back for molybdenum.The Endako mine, which barely avoided closure six years ago, is now a highly profitable operation and the owner, Thompson Creek Mining, is considering doubling the current mining and milling rate. An expanded Endako mill could also eventually treat highgrade molybdenum ore from the Davidson deposit near Smithers (also owned by Thompson Creek). Leeward Capital Corporation drilled on nearby Nithi Mountain, as did TTM Resources Incorporated at the Chu property.

The Kootenay’s first metal mine since 2001 began production in the fourth quarter — Roca Mining Incorporated’s MAX molybdenum mine near Trout Lake. The MAX, an underground mine, plans to produce at a rate of 72,000 tonnes per year.

The Ruby Creek project (Adanac Molybdenum) near Atlin received an Environmental Assessment certificate in September 2007. Within days, the company announced the start of construction of an open pit mine and mill estimated to cost $640 million. Other advanced molybdenum projects in the northwest are Storie (Columbia Yukon Explorations), Lucky Ship (New Cantech Ventures), Ajax (Tenajon Resources) and Red Bird (Torch River Resources).

Eagle Plains Resources Limited drilled the Sphinx molybdenum project (inferred resource of just over 62 Mt grading 0.035% Mo). East of Summerland, in the Okanagan, partners Goldrea Resources Corporation and Molycor Gold Corporation drilled the Crow Rea property to better define near-surface molybdenum mineralization in anticipation of bulk sampling.

Copper-molybdenum

High metal prices are also benefiting some of the older mines in the province. Taseko Mines Limited has added 116 Mt of proven and probable reserves to 348 Mt of 0.31% copper and 0.009% molybdenum for its Gibraltar Mine north of Williams Lake. These new reserves can extend the mine life by 17 years. The Highland Valley copper-molybdenum mine of Teck Cominco Limited/Highmont Mining Company Limited is continuing plans to extend mine life to 2019, with the Valley pit expansion, crusher moves and equipment purchases. Huckleberry Mines has been able to extend its mine life as well (Imperial Metals Corporation and Japanese Consortium).

A major drilling program for copper and molybdenum were conducted on the Berg (Terrane Metals). Drilling was also conducted at Big Onion (Eagle Peak Resources), Seel (Gold Reach Resources), Lennac Lake (Dentonia Resources), Louise Lake (North American Gem) and Coles Creek (Callinan Mines). Pacific Booker reactivated an Environmental Assessment of the Morrison project. Copper Fox Metals collected engineering and environmental data required to complete an Environmental Assessment of the Schaft Creek project.

Over the Guichon Batholith, near Highland Valley Copper, programs for porphyry-style mineralization were undertaken at the Rateria (Happy Creek Minerals Limited), Tyner Lake (TNR Gold Corporation) and Dot properties (Alhambra Resources).

Polymetallic

The precious metal-rich Eskay Creek mine (Barrick Gold) is expected to close in 2008. Several companies explored for other polymetallic deposits in the region, including the nearby Corey property (Kenrich-Eskay Mining), and tested for an extension of the Double Ed deposit in the historic Anyox copper camp. The southwest’s long-lived volcanic massive sulphide camp at Myra Falls (Breakwater Resources Limited) continued to produce copper, zinc, gold and silver.

Redfern Resources Limited developed a novel river-based access plan for its proposed Tulsequah Chief copper-zinc-silver-gold mine, while continuing drilling. Spurred by a strong feasibility report,Western Keltic Mines is advancing its Kutcho Creek copper-zinc project.

Ecstall Mining Corporation continued drilling to define its Akie sediment-hosted lead-zinc-silver deposit in the Muskwa Range, northeast of Williston Lake.

North of Revelstoke, Selkirk Metals Corporation continued drilling on its Ruddock Creek zinc-lead project and began a decline to facilitate underground drilling of the E-Zone. Consolidated Venturex Holdings Limited drilled at the LJ copper-zinc-lead property and International Bethlehem Mining Corporation tested airborne geophysical anomalies on the Rain zinclead- silver-copper property.

East of Clearwater, the Harper Creek project of Yellowhead Mining Incorporated was the subject of a large program aimed at expanding the known stratiform, disseminated copper resource.

Carbonate-hosted zinc-lead mineralization in the Kootenay Arc was the target of drilling by ReMac Zinc Corporation on its ReMac project east of Trail near the Reeves-McDonald and Annex mines.

The Jersey-Emerald project near Salmo was the site of extensive drilling by Sultan Minerals Incorporated. Recent exploration by Sultan has focused on molybdenum and tungsten potential, with combined measured and indicated resources of 2.51 Mt at 0.37% tungsten in the Emerald Mine, calculated in November 2006.

The Findlay project of Eagle Plains Resources Limited explored sedex-style lead-zinc mineralization in the Cranbrook region. On the coast, Grande Portage Resources Limited carried out a large drill program to test the Merry Widow iron skarn for precious metal and copper values. Similarly, Prophecy Resource Corporation is expected to follow up promising intersections drilled earlier this year at the Okeover copper-molybdenum porphyry project north of Powell River.

Gold

In 2007, Merit Mining Corporation dewatered and rehabilitated the underground workings on the Lexington-Grenoble gold-copper deposit, located west of Grand Forks.The company’s focus was on extraction of a 10,000 tonne bulk sample and building a 200 tonnes per day mill. Cross Lake Minerals Limited’s underground QR Mine, accessed via Quesnel, plans to start producing gold in late 2007. Through an active exploration program, Cross Lake seeks to extend the mine life significantly beyond the current two-year life based on proven reserves.

A resurgence in activity, not seen in more than a decade, returned to the Golden Triangle (the Stewart-Iskut district), with some 14 drilling campaigns. For example, the Bravo Venture Group targeted a quartz-chalcopyrite vein and breccia zone. Epithermal gold-silver systems were targeted at Treaty Creek (American Creek Resources) and Dilworth (Ascot Resources).

In the Toodoggone area, Sable Resources Limited’s Shasta epithermal goldsilver mine is being explored underground and by surface drilling, with the aim of bringing it back into production, using the nearby Baker Mill for processing. Christopher James Gold Corporation completed an extensive drill program on gold targets at its Ranch Project, focusing on the Bonanza and Mickey Zones.

Alpha Gold Corporation continued geophysical and geochemical exploration and drilling to evaluate the geologically complex Lustdust gold property north of Fort St. James.

Extensive drilling continued at Skygold Ventures Limited’s Spanish Mountain sediment-hosted copper-gold bearing vein deposit just east of Likely, and the deposit remains open in all directions. West of Horsefly, Hawthorne Gold Corporation is rehabilitating underground exploration workings and undertaking surface drilling at its Frasergold gold-bearing quartz vein property.

The Blackdome mine (closed) near Clinton and the Elizabeth property of JPacific Gold Incorporated were drilled this year with a goal of reopening the mine and augmenting production with ore from the Elizabeth property. Nearby at the Stirrup project, Anglo-Canadian Uranium Corporation drilled oxidized shear zones. Ongoing, positive results are reported from Bralorne Gold Mines Limited’s drilling within the King-Bralorne gap at the Bralorne Mine project.

The Spences Bridge gold belt near Ashcroft continues to be active, with numerous companies exploring for epithermal gold targets, including Consolidated Spire Ventures Limited (Prospect Valley), Strongbow Exploration Incorporated (Ponderosa, Skoonka Creek) and Anglo-Canadian Uranium Corporation (Skoonka). At the Elk Project near Peachland, Almaden Minerals Limited conducted drilling and baseline studies to complete a prefeasibility study on the high-grade gold veins.

Astral Mining Corporation drilling on the large Jumping Josephine property, west of Castlegar, targeted gold-bearing quartz stockworks discovered in 2006 by trenching. West High Yield (W.H.Y.) Resources Limited carried out a third major phase of diamond drilling on its Rossland gold project.

Coal

Late in 2006, Northern Energy and Mining Incorporated (20 per cent), Hillsborough Resources Limited (14 per cent) and Anglo Coal Canada Limited (66 per cent) jointly created a new entity, the Peace River Coal Limited Partnership. The partnership manages the northeast British Columbia coal assets formerly assigned to the companies separately.Peace River Coal (PRC) operates the openpit Trend Mine and Western Canadian Coal (WCC) operates the Wolverine (Perry Creek) open pit, producing 2.4 Mt per year of metallurgical coal. Exploration drilling is underway aimed at defining the nearby EB deposit, which potentially could increase Wolverine’s saleable export coal. In January 2007, WCC began production from its Brule Mine north of Tumbler Ridge, with production designed for 800,000 tonnes per year of pulverized coal injection (PCI) coal. Opening of this mine followed closure of WCC’s nearby Dillon Mine in September 2006.In June 2007,WCC acquired the Willow Creek Mine located near Chetwynd after closure by Pine Valley Mining Corporation the previous year.WCC hopes to put this small mine back into production in 2008.

In the southeast, the Fording River, Elkview, Greenhills, Line Creek and Coal Mountain mines, of the Elk Valley Coal Corporation, continued to rank number two for exporting high-quality coking coals around the globe. Elk Valley Coal Corporation undertook major drilling programs on Wheeler Ridge (Coal Mountain Operations), Mt. Michael and Saddle (Line Creek Operations), and Castle Mountain and Bare Mountain (Fording River Operations).

Quinsam Coal (Hillsborough Resources Limited) produces thermal coal from its mine on Vancouver Island.

First Coal was active in drilling on its South Central (Goodrich) metallurgical coal property south of the Willow Creek Mine. Drilling was planned on the Belcourt and Adams/Gething prospects of Canadian Dehua International Mines Group, south of Tumbler Ridge and northwest of Chetwynd, respectively.

Industrial minerals

East of Williston Lake, Aley Corporation has been drilling to outline a carbonatite-hosted niobium deposit.

Eagle Plains Resources Limited drilled the Ice River igneous complex in the Rocky Mountains, southeast of Golden, looking for base and precious metals, rare earth elements and sodalite. Commerce Resources Corporation is drilling the Upper Fir tantalum-niobium property and undertaking baseline studies.

Graymont Western Canada Incorporated is proposing development of a high-purity limestone deposit in the Prince George region to produce lime. The Coyote Creek gypsum project near Canal Flats was drilled by CGC Incorporated.

Aggregate

The southwest region is host to Canada’s two largest quarries, and five of the top 25 aggregate operations. Texada Quarrying Limited (Lafarge) produces nearly 6 Mt annually. Most of this is limestone, used as both construction aggregate and as feed for Lower Mainland cement plants. The Sechelt pit of Construction Aggregates Limited (Lehigh) is targeting six million tonnes of sand and gravel production in 2007. Construction Aggregates’ Producer’s Pit and Mainland Sand and Gravel Limited’s Cox Station Quarry each produce in excess of 2 Mt annually and the Earle Creek Pit (Lafarge) produces more than 1 Mt annually. Orca Sand & Gravel, operated by Polaris Minerals Corporation, began shipping in 2007 and plans an eventual yearly production of 6 Mt.

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