Avanti Mining has been issued an Environmental Assessment Certificate (EAC) for its Kitsault molybdenum mine by the British Columbia Minister of Environment and Minister of Energy, Mines and Natural Gas.
Avanti is focused on developing the past producing Kitsault molybdenum mine located about 140 km north of Prince Rupert, British Columbia, and south of the head of Alice Arm, an inlet of the Pacific Ocean. Avanti reported the results of an updated feasibility for the project in February 2013.
The property includes three known molybdenum deposits: Kitsault, Bell Moly and Roundy Creek. The Kitsault mine produced molybdenum between 1967 and 1972 and from 1981 to 1982, with total production during both periods of approximately 31 million lb of molybdenum.
Silver averages 5 g/mt in the mill feed, and total by-product silver production of 14.4 million oz is indicated at a metallurgical recovery of about 39%.
The feasibility study update estimates that the Kitsault mine will operate at a mill throughput rate of 14.6 million mt/y, or 40,000 mt/d, with a strip ratio of 1.05:1 over a mine life of 16 years. Life-of-mine molybdenum production is estimated at 374 million lb contained in approximately 350,800 mt of concentrate produced from the processing of 228 million mt of reserves grading 0.083% molybdenum.
Ore will be mined by conventional truck-and-shovel open-pit methods, crushed in a gyratory primary crusher, and ground using a SAG-ball mill configuration. Conventional flotation and five stages of cleaning will produce molybdenum concentrate that will be dried and packaged into bags for shipment. Total molybdenum recovery will vary depending on mill head grade but is estimated to average 90% over the life of the mine.
Initial capital costs are estimated at C$938 million. Life-of-mine sustaining mine capital is estimated at C$106 million, mainly for mobile equipment replacement, ongoing tailings management facility embankment construction, and estimated closure and reclamation cost requirements.
Life-of-mine cash mine-site operating costs are estimated at C$6.65/lb of molybdenum (±15% accuracy). Total cash cost, including a silver credit of C$0.91/lb of molybdenum and transportation and beneficiation charges are C$6.73/lb molybdenum.
Avanti has signed a letter of intent with a major German steel maker for 50% of the production of Kitsault for the life of the mine and hopes to have a formal agreement in the near future. Contract volumes will be established annually based on the mine plan and will reference a market-based monthly price for molybdenum.
The project has received approval in principal for German government debt guarantee for up to US$300 million.
Avanti also continues discussions with a potential strategic partner to assist in providing the equity component of the project’s financing.