TORONTO (miningweekly.com) – TSX-listed IDM Mining has initiated the environmental permitting phase for the Red Mountain underground gold project, near Stewart, in British Columbia, following the submission of its project description document to the British Columbia Environment Assessment Office (EAO).
IDM, which was currently earning an option to acquire a 100% interest in the 17 125 ha Red Mountain property, 15 km north-east of Stewart, said in a statement on Tuesday that under Section 10 of the British Columbia Environmental Assessment Act, the provincial EAO would review the project description to determine whether or not the project would require an environmental assessment.
However, IDM pre-empted that the project would require an environmental assessment and had already started with preparation work, including First Nation and stakeholder engagement, environmental baseline and hydrological studies and project engineering. This work was being done in preparation of filing its application for an environmental assessment certificate.
"The filing of the project description report is an important first step in permitting the Red Mountain underground gold project. Since we acquired the property in April, we have been working diligently to define the project footprint, collect necessary baseline data and engage with our stakeholders. We look forward to discussing our proposed development plans and receiving feedback in the months ahead,” IDM executive chairperson Michael McPhie commented.
IDM had recently completed a surface drilling programme on multiple exploration targets at the project, including the 141 and Cambria zone targets. Assays were currently being received for this programme, with the company expecting to announce initial results shortly.
Further, the final surface sampling results, as well as assays of historic drill core not previously sampled from the 141 zone, would also be announced.
The Red Mountain property holds numerous precious and base metal targets over a 15 km x 4 km trend of strong alteration and mineralised prospects. Since discovery in 1989, more than $40-million had been spent on the property, including a production-sized underground ramp.
IDM recently announced positive results from a National Instrument 43-101 preliminary economic assessment (PEA) and a revised resource estimate, completed by JDS Energy & Mining.
At a 3 g/t gold cutoff, measured and indicated resources from the Marc and AV zones were 1.45-million tonnes, averaging 8.15 g/t gold and 29.57 g/t silver for 380 900 oz of gold and 1.38-million ounces of silver. The inferred resources from the Marc, AV and JW zones were 332 900 t, averaging 7.69 g/t gold and 12.72 g/t silver for 82 300 oz of gold and 136 200 oz silver.
The PEA used base-case economics of $1 250/oz of gold and $20/oz of silver, which calculated a pretax net present value of $90-million, at a 5% discount rate, with an internal rate of return of 43.3% and a 1.3-year payback of an initial $76-million in capital, which included a 15% contingency.
The report found that, owing to the wide nature of the mineralised zones, the majority of the deposit was amenable to bulk underground long-hole mining methods to produce 1 000 t/d of ore, which was estimated to deliver 55 500 oz/y of gold and 171 000 oz/y of silver.
Over the five-year mine life, the operating cost was estimated at $516/oz of gold recovered and, net of the silver by-product, costs would drop to $455/oz.