ADVANCING THE NEW AFTON COPPER-GOLD PROJECT WORLD CLASS GRADES NEXT TO THE TRANS CANADA HIGHWAY
New Gold Inc. (NGD: TSX/AMEX) owns 100% of the mineral rights to the New Afton Copper-Gold project, located adjacent to the Trans–Canada Highway, 10 kilometres (kms) west of Kamloops, British Columbia, Canada. The project hosts the New Afton Cu-Au Deposit, which is one of the World’s highest grade Cu-Au porphyries. The deposit lies below, and to the west of, the past-producing Afton open pit mine, and has an independently calculated (by Qualified Person, Gary Giroux, 2004) Measured and Indicated resource of 45.9 million tonnes grading 1.3% Cu, 1.0g/t Au, 3.2g/t Ag, and 0.13g/t Pd (at a 1.2% copper equivalent cut-off). Metal prices used in calculation of this resource were US$0.85/lb Cu, US$375/oz Au, US$5.25/oz Ag, and US$200/oz Pd.
The deposit was discovered by surface diamond drilling which commenced in 1999, and the current resource was based on the results of 109 diamond drill holes. The mineralized body can be described as south-west trending and cigar-shaped, with a strike length of approximately 1km, a vertical height of up to approximately 400 metres, and horizontal widths locally in excess of 100 metres. It plunges gently to the west and has been identified to a maximum vertical depth of approximately 800 metres, and remains open both to the west and at depth.
The mineralization is hosted in the 35 km long Iron Mask Batholith at the northwest end of the 18 km long Iron Mask Pluton composed of diorites and gabbros of Upper Triassic age (208 – 230 Ma). Mineralization in the original open pit consisted largely of supergene native copper and chalcocite. With depth native copper disappears, as mineralization grades from a chalcocite-bornite type to a hypogene chalcopyrite mineralization type. The New Afton mineralization is unusual compared to most porphyries in that the grades increase with depth relative to the open pit. Some observers have suggested that the mineralized body might have more direct similarities to magmatic copper-nickel bodies.
An underground exploration program was initiated in December, 2004 and since that time more than 2 kilometres of underground excavation have been completed, which included completion of both a main exploration decline and a cross-cut directly into the mineralization. The exploration decline was used to complete systematic infill diamond drilling on 40 metre-spaced sections in order to increase the confidence level in, and understanding of, the geometry and extent of the mineralization. A CDN$5 million feasibility study commenced in December, 2005 and will determine the economic and technical potential of developing the project into a new underground mine. The first phase of this study (completed at the end of February, 2006), involved completion of trade-off studies to determine the most appropriate mining method(s). This talk will include discussion of the rationale behind the selection of the mining method and its impact on the overall project.