Terrane Metals reports encouraging results from a feasibility study update of its Mt. Milligan gold-copper project in north-central British Columbia and, subject to financing and receipt of certain permits and approvals, now anticipates a first-quarter 2010 construction decision. The new study, prepared by Wardrop Engineering, is based on 482 million mt of proven and probable reserves averaging 0.39 g/mt gold and 0.20% copper. Gold in reserves totals 6 million oz, and copper in reserves totals 2.1 billion lb.
Mining at Mt. Milligan will be by open-pit methods at a life-of-mine strip ratio of 0.84:1. Plant throughput is planned at 60,000 mt/d to produce a copper-gold flotation concentrate. Plant recoveries are expected to average 84.1% for copper and 71.4% for gold in a clean and marketable copper concentrate grading 26.4% copper and 43.7 g/mt gold, with a minor silver credit.
Purchase orders have been placed on long-lead mills, crushers, mill motors and the main transformer, representing 15% of total initial project capital cost. Total project capital cost is estimated at C$915 million. The first six years of the Mt. Milligan mine plan have been designed to accelerate the extraction of near-surface and higher-grade gold reserves. Gold production during this period will average 262,100 oz/y and account for 55% of revenue. Net of the copper credit, gold production cash cost for this period is projected at negative $8/oz. Over the 22-year mine life, gold production is projected to average 194,500 oz/y at an average production cash cost of $51/oz net of the copper credit.
Expectations are that Mt. Milligan concentrate will be marketed to Pacific Rim Asian smelters. Concentrate will be trucked 82 km from the project site to a storage and rail loadout facility at Fort St. James, British Columbia, and then shipped by rail to port storage facilities at Vancouver Wharves in North Vancouver.
Terrane Metals is owned 59% by Goldcorp Inc. Goldcorp president and CEO Chuck Jeannes said of the news from Mt. Milligan, “We are very pleased with the feasibility update study. Not only did it hold the line on costs but it also significantly boosted reserve ounces and mine life. Terrane has clearly grown Mt. Milligan into a major, construction-ready, copper-gold project with an opportunity for outstanding net operating margins.”