Dec '09/Jan '10

British Columbia

An eye on the horizon

By D. Grieve, B. Madu, B. Northcote, P. Wojdak, J. Fredericks, and D. Lefebure

Driving in casing at the Raven coal project of Compliance Energy Corporation on Vancouver Island

Exploration expenditure in the province of British Columbia is anticipated to be less in 2009 than the $357 million spent in 2008, largely due to the continuing economic uncertainty and the attendant difficulty in raising capital. However, a number of mining projects continue to advance towards production. Currently, 22 projects are in the Environmental Assessment (EA) process, six are in mine permitting and another six are in mine development.

Northwest region

Gold: The exploration focus in the Northwest was on expanding new gold-(copper) resources at the Snowfield, KSM and Homestake Ridge projects in the Stewart area (the Golden Triangle) and at Red Chris near Iskut.

Seven drills and an 80-member field team worked the Snowfield-Brucejack property of Silver Standard Resources, where an impressive intersection of 0.70 g/t Au over 483 metres in a new zone underscores the bulk-tonnage potential.

Bravo Venture Group Inc. conducted drilling on Homestake Ridge, where a 2008 intercept graded 21 g/t Au across an estimated true width of 52 metres.

Three small gold mines are in development — Yellow Jacket in the Atlin placer district, operated by Eagle Plains Resources and Prize Mining; the Cassiar gold project near Smithers, operated by Hawthorne Gold Corp; and Dome Mountain, which Eagle Peak Resources is planning to re-open.

Copper-gold-molybdenum:Thompson Creek Metals Company approved resumption of the $374 million expansion of the Endako molybdenum mine to increase daily capacity from 28,000 to 50,000 tonnes. At the Huckleberry copper mine, Imperial Metals announced a new plan to extend the operation to late 2011.

Seabridge Gold continued resource expansion on the enormous Mitchell gold-copper porphyry deposit on the KSM property. Imperial Metals’ two-drill program explored the deep core zone of the Red Chris copper-gold porphyry deposit. The target of the 1,500-metre holes is to delineate a zone exceeding 1% Cu and 1 g/t Au below the open pit resource.

Other significant porphyry drill programs include Big Bulk near Kitsault, which was optioned by Anglo-Gold Ashanti and the Kitsault molybdenum mine on the North Coast that Avanti Mining plans to re-open.

North-central region

Gold: The Spanish Mountain property near Likely is a joint venture between Skygold Ventures and Wildrose Resources. Here, exploration started this year with the release of a new estimate that reported measured and indicated resources in the Main Zone at 102 Mt grading 0.785 g/t Au at a 0.5 g/t cut-off.

In the Wells-Barkerville area, International Wayside Gold Mines has reported a positive prefeasibility study at the Bonanza Ledge project. The company signed a Letter of Intent to purchase the assets of Cross Lake Minerals, including the QR Mine and mill.

Copper-gold-molybdenum: At its Gibraltar Mine, Taseko Mines appears on track to meet its goal of producing over 36 million kilograms of copper and 360,000 kilograms of molybdenum this year.

Imperial Metals actively explored its Mount Polley Mine lease northeast of Williams Lake. The highlight hole drilled this year, ND09-79, intersected 157 metres of 1.73% Cu, 1.11 g/t Au and 10.53 g/t Ag.

The Woodjam Joint Venture between Fjordland Exploration and Cariboo Rose Resources has signed an agreement with a new joint venture partner, Goldfields Horsefly Exploration, to explore the Woodjam North property.

Terrane Metals Corp. received the provincial EA Office Certificate in 2009 and the provincial Mines Act Permit for the Mount Milligan project. The project is in the final stages of obtaining EA approval from the federal government.

Northeast region

Coal: At the Trend Mine, operated by Peace River Coal (PRC), the 2008 production of 772,000 tonnes comprised 632,000 tonnes of metallurgical coal and 140,000 tonnes of thermal coal. Also in 2008, PRC initiated a $104 million program to acquire and operate its own mining equipment. On the adjacent Roman Mountain property, PRC continues development activity following the conclusion of a prefeasibility study last year.

Western Coal completed mining the Phase 1 and 2 areas and is currently mining the Phase 3 area at the Wolverine Mine. Western Coal’s Willow Creek project remains on care and maintenance.

First Coal received approvals to extract a bulk sample of up to 50,000 tonnes of coal from its Central South property, a task begins in the fourth quarter of 2009.

Southeast region

Gold: Eagle Plains Resources continues work on the Iron Range property, while further to the east, Max Resource planned activity on the Crowsnest and Howell gold properties in the Flathead drainage southeast of Fernie.

Jaxon Minerals continued assessing the Nox Fort intrusion-related gold-bismuth-tellurium property. Valterra followed up encouraging 2008 drill results on the Star property with another drill program in 2009. Nearby, on the Kenville gold mine property, Anglo Swiss Resources continued underground rehabilitation, sampling and drilling.

Copper-gold-molybdenum: Roca Mines’ MAX underground molybdenum mine at Trout Lake, which achieved commercial production in June 2008, is permitted for 72,000 tonnes per year.

In the Boundary District, Grizzly Diamonds expanded its considerable Greenwood gold project holdings and undertook exploration, including airborne geophysics and diamond drilling.

Polymetallic: Duncastle Gold continued drilling polymetallic veins (gold-silver-lead-zinc) on the Yankee-Dundee property near Ymir. On the past-producing Jersey-Emerald property, south of Salmo, Sultan Minerals continued to evaluate tungsten, zinc and molybdenum mineralization and released an updated tungsten resource estimate of 2.719 million tonnes measured plus indicated resources at 0.358% WO3.

Klondike Silver delineated a western extension to the Silvana lode structure on its Slocan Silver Camp holdings.

Coal: Southeast BC’s five large open pit metallurgical coal mines are situated in the Elk Valley and are operated by Teck Coal. Production from these is expected to be at or above last year’s level of 22 million tonnes. The record 2008 prices for metallurgical coal were followed by lower, but still very high, prices in 2009. Nonetheless, expenditures on coal exploration in the Elk Valley were considerably reduced in 2009. The Mt. Michael property, north of Line Creek Mine was the site of the most significant drilling program.

South-central region

Gold: Bralorne Gold Mines started a new adit to access the zone at a higher level on the BK Zone at the historic Bralorne Mine.

Skygold Ventures returned to Thunder Ridge on its Spanish Creek property where 2008 drilling encountered high-grade gold and silver intersections in an area reportedly never previously drilled.

J-Pacific Gold’s updated resource estimate for the Elizabeth project pegged inferred resources at 522,900 tonnes grading 12.3 g/t Au at a five-gram cut-off.

Copper-gold-molybdenum: Teck Resources’ Highland Valley is Canada’s largest copper mine. In 2008, it produced 119,300 tonnes of copper in 2008 and 4.2 million pounds of molybdenum. Stress cracks in the Valley pit are forcing a reduction in mine output through the second half of the year and will have a sharp impact on 2010  production.

At the New Afton project, over 2,600 meters of the total of 4,525 meters of conveyor access was completed by mid-year. Also in the Afton area, Abacus Mining and Exploration completed a Preliminary Economic Assessment of the Ajax copper-gold porphyry deposit.

Copper Mountain Mining’s eponymous project is on track for a restart. Reported proven and probable reserves at Copper Mountain are 211 million tonnes of 0.36% Cu based on a 0.15% cut-off.

After several dormant years, Barrick Gold undertook a substantial program at the Poison Mountain or Yalakom copper-porphyry deposit northwest of Lillooet.

Polymetallic: Yellowhead Mining has advanced its Harper Creek project north of Barriere, to the EA process. The project has an indicated resource of 538.4 million tonnes of 0.32% Cu at a 0.2% cut-off.

At its Ruddock Creek zinc-lead project, north of Revelstoke, Selkirk Metals completed a resource estimate for the E-Zone. The company has announced a merger with Imperial Metals and has introduced this project to the EA process.

Southwest region

Gold: At the Mineral Creek gold property, Bitterroot Resources installed new milling equipment within an existing adit and continued drill testing the Linda and Ember veins. Module Resources rehabilitated the 800 and 900 levels of the former Carolin Mine.

Copper-gold-molybdenum: Selkirk Metals released a NI 43-101-compliant resource estimate for the Catface project on the west coast of Vancouver Island.

Polymetallic:  Averting the possible suspension announced in late 2008, Breakwater Resources continues operations at Myra Falls, but at a reduced level compared to previous years. A delineated discovery in the South Flank area that  had entered production by mid-2009, will be a significant source of mill feed through 2010.

Coal:  In June 2009, Hillsborough Resources forecast production of 435,000 tonnes of saleable coal in 2009 at the Quinsam thermal coal mine near Campbell River. Hillsborough published a new resource estimate for the adjacent Quinsam North property whose development is on hold.

At the Raven coal project in the Comox Valley, drilling was conducted to upgrade the existing resource in preparation for a feasibility study. The project is a joint venture between Compliance Energy, subsidiaries of Itochu Corporation and LG International. The joint venture has received an order to proceed under Environmental Reviewable Projects legislation.

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