Toronto-listed Seabridge Gold has unveiled the results of a preliminary economic assessment (PEA) study for a potential copper-rich underground mine at its KSM project, in northern British Columbia.
The 2022 PEA is a standalone mine plan that has been undertaken to evaluate a potential future expansion of the KSM mine to the copper-rich Iron Cap and Kerr deposits after the 2022 preliminary feasibility study (PFS) mine plan has been completed.
The 2022 PEA is primarily an underground block cave mining operation supplemented with a small openpit and is planned to operate for 39 years with a peak mill feed production of 170 000 t/d.
The 2022 PFS plan, disclosed in June, is an openpit-only plan with a 33-year mine life limited to the Mitchell, East Mitchell, and Sulphurets deposits. None of the mineral resources incorporated into the 2022 PEA mine plan have been used in the 2022 PFS mine plan.
"KSM is really an entire district hosting a nest of potentially economic porphyry deposits with different characteristics. In our updated PFS we focused on the gold-rich deposits because of their faster payback and the relative simplicity of an openpit-only operation. However, we are very mindful that a deep deficit in mined copper is projected to be on the horizon as the world electrifies and moves towards a net zero carbon future. We, therefore, wanted to highlight KSM's potential to contribute to addressing this need more fully than the mine plan contained in our updated PFS.
"We think this opportunity will be attractive to a prospective partner,” said chairperson and CEO Rudi Fronk.
The 2022 PEA assumes that the 2022 PFS plan has been completed. Openpit mining equipment will be relocated to the Kerr deposit to begin pre-stripping while the Iron Cap block cave is being developed.
Year one of the 2022 PEA mine life coincides with the first year of mill feed from the Iron Cap deposit. Mill feed from Kerr block cave begins in year seven.
The 2022 PEA production plan produces 14.3-billion pounds of copper, 14.3-million ounces of gold, 68.2-million ounces of silver, and 13.8-million pounds of molybdenum from 1.7-billion tonnes of mill feed over a 39-year mine life.
On average, the mine will produce 368 000 oz/y of gold, 366-million pounds a year of copper, 1.8-million ounces a year of silver and 0.4-million pounds a year of molybdenum.
Initial capital costs for the 2022 PEA are estimated at $1.5-billion, with sustaining capital over the 39-year mine life of $12.8-billion, dominated by block cave development capital.
The PEA base case has an aftertax net present value, using a 5% discount, of $5.8-billion, an internal rate of return of 18.9% and a 6.2-year payback period.