Resource World Magazine

30 www.resourceworld.com A U G U S T / S E P T E M B E R 2 0 1 4 Imperial Metals' Red Chris Mine: the long road to production by Thomas Schuster B ritish Columbia's next mine is on schedule to be commissioned in August with commercial production slated for late 2014. Vancouver-based Imperial Metal Corp.'s [III-TSX] Red Chris Mine is located about 18 km southeast of the village of Iskut and 80 km south of Dease Lake on the Todagin Plateau, northwest BC. The 30,000 tonne-per-day open pit copper/gold mine is fore- cast to have an annual average production over the first five years of 88 million lbs copper and 52,700 oz gold. Over the planned 28-year mine life, total recovered metal in concentrate is estimated at 2.08 billion lbs copper and 1.324 million oz gold. "We expect the mine will be in operation well beyond its ini- tial 28-year mine life," said Brian Kynoch, President. "Red Chris will initially double our gold production and increase our copper production by about 170%." Imperial Metals operates the Mount Polley copper/gold mine in BC and the Sterling gold mine in Nevada. Imperial has a 50% interest in the Huckleberry copper mine and a 50% interest in the Ruddock Creek lead/zinc property, both in BC. At the Red Chris Mine, interior steel, mechanical installa- tion and the tailings and reclaim water system are all about 70% complete. Piping and electrical work in the plant are about 20% complete. Construction of the 93-km Iskut extension of the Northwest Transmission Line (NTL) from Bob Quinn to Tatogga is now expected to be completed by Imperial Metals by the end of July 2014. BC Hydro is completing its portion of construction of the NTL from the Skeena substation to Bob Quinn. Red Chris hosts reserves of over 300 million tonnes averaging 0.359% copper and 0.274 g/t gold. It is economically robust with an after tax IRR of 15.7% based on conservative metal prices of US $2.20 copper, US $900/oz gold and US $12/oz silver and an exchange rate of US $0.90. At these baseline commodity prices, project payback is estimated at 4.58 years and life-of-mine pro- duction cost per pound of copper is US $1.22 (after gold and silver credits). Imperial Metals reports that it expects the overall capital cost estimate to have increased by about $30 million due to addi- tional costs incurred in the construction of the Iskut extension power line. At the end of March 2014, Imperial had spent $512.5 million out of its budgeted capital expenditures of $622 million, (this includes $52 million to be repaid by BC Hydro for the con- struction of the Iskut extension). The forecast, net construction cost of the Red Chris Mine is now estimated to be $570 million versus the previous estimate of $540 million. The company prides itself in taking a different approach to mine development by managing the construction phase on its own and, in doing so, Imperial has kept its hands firmly on the tiller. "That's not to say that there haven't been challenges and cost overruns but there hasn't been a complete capital cost blow- out like we've seen with other projects in recent times," said Steve Robertson, P.Geo. VP, Corporate Affairs. The mine expects to employ some 300 hourly, salaried and contract personnel, and would operate on a fly-in/fly-out basis on a two-week rotation. Chartered aircraft will fly employees to the Dease Lake airstrip; from there they will be bused to the mine. The road to production for Red Chris has been a long and winding one. It started 58 years ago in 1956, when Conwest Exploration staked claims to cover oxidized gossans that con- tained small amounts of copper-oxide minerals on the Todagin Plateau. From 1968 to 1973, Great Plains Development and Silver Standard Mines explored the area and about 1,200 metres were drilled on various claims. The mine property was optioned in 1973 and drilled by Ecstall Mining (which later became Texasgulf Canada). Ecstall drilled over 15,500 metres and outlined two zones of copper gold mineralization dubbed the Main and East zones. The first resource was estimated in 1976 and contained 34.4 million tonnes averaging 0.51% copper and 0.27 g/t gold to a depth of 270 metres in the Main Zone and 6.6 million tonnes aver- aging 0.83% copper and 0.72 g/t gold to a depth of 150 metres MINING The new 30,000 tonne-per-day flotation mill at the Red Chris Mine in northern British Columbia. Scott Steel Erectors Inc. was contracted to erect the super structure, envelope, and interior steel and operating floors. Photo courtesy Imperial Metals Corp.

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