TORONTO (miningweekly.com) – The past year was a tough one for most junior mining companies operating in British Colombia (BC). But despite tightened economic constraints for many, progress was still very much in evidence. One company making headway has been Yellowhead Mining, which is developing the Harper Creek copper/gold/silver project.

Wholly-owned by the company, Harper Creek is located near the town of Vavenby, North Thompson valley, in southeast BC. At a 0.14% copper cut off, proven and probable reserves comprise 704.4-million tons for 0.262% copper, 0.029 g/t gold and 1.14 g/t silver.

Harper Creek has been a project in the making for some time. “The story goes back to early 1970s with a joint-venture between Noranda and US Steel. They conducted a substantial amount of drilling, around 25-26 000 m, and completed an internal feasibility study, albeit not to NI [National Instrument] 43-101 standards,” Yellowhead Mining’s executive VP, corporate development, Ronald Handford told Mining Weekly Online.

“The project then got shelved because the cut-off grade used and the tonnage defined didn’t work with the copper price of the time. Not to NI 43-101 standards, they had about 85-million tons at 0.39% copper, while the copper price back then ranged between 60c and 80c a pound. In addition, British Colombia’s tax regime at the time made the development of many projects simply unfeasible,” he said.

Leaping forward to the mid-2000s, the opportunity for what would lead to Yellowhead unfolded.

“Greg Hawkins, our chairman and interim CEO, and Chris Naas [former Yellowhead project manager] had been working in the area for around 20 years and saw its opportunity. They made a deal with US Steel, which was getting out of the mineral resources business in 2005, allowing them to option a land package at Harper Creek,” Handford said. “The company was then formed in August 2005 … This was our foundation.”

“Yellowhead inherited the site’s data and most of the original core [samples] from the Noranda/US Steel joint venture. In re-analysing the cores, we obtained good corroboration between our lab results and what Noranda/US Steel had secured,” he said.

“We soon started our own drill programme, seeking to reinterpret the ore body as the previous [Noranda/US Steel] concept only called for a pit 100-150 m deep. They kept to this, drilling only within these parameters until they shut [their project] down,” he said. “We drilled down to depths of up to 600 m and were able to substantially increase the resource."

The project's feasibility study was released in March 2012, outlining a capital expenditure [capex] of $840-million. Using a cut-off grade of 0.20% copper, the feasibility study was based on a measured and indicated resource of 815-million tons grading 0.29% copper, 0.03 g/t gold and 1.3 g/t silver. Mine life is estimated at 28 years, with a milling rate of 70 000 t/d. Total life of mine production is estimated at 3.63-billion lbs copper, just over 372 000 oz gold and 14.73-million oz silver.

“Importantly, our operating and capital costs are at the lower end of the scale because of the project’s configuration,” Handford said. “We’ve got a low stripping ratio [0.81:1 estimated for the life of mine] and we’ve got a soft ore that's easy for milling, which will deliver lower energy costs.”

Handford also stressed the importance of the area’s infrastructure. “We’re adjacent to a railway [and] we’ve bought the site of an old warehouse and sawmill at Vavenby that has its own railway siding. This is great, because it reduces another key infrastructure cost,” he said.

Harper Creek’s silver and gold will account for 8% of projected profit, Handford said.

“Yeah, but it’s still a copper mine,” he quipped when asked about the precious metals. “Still it’s good to have; it pays for things like the transportation and smelting.”

The company is progressing with an in-fill drilling campaign. “It’s going well,” Handford said. “They’ll be a steady flow of drill results over the next two to three months. We’ll be finished by March and I suspect we’ll have all results back by April.”

Project permitting also remains on track. “Most likely, we’ll submit our environmental assessment [EA] by the end of February. Then they'll be a 30-day review period followed by a formal six-month review that includes community consultation. Assuming a positive recommendation to the minister, there’ll then be an additional 45-day ministerial review period. So our goal is to submit the EA in Q1 and, hopefully, it will be approved before the end of the year.”

Meanwhile, close working relations with the local First Nations communities is considered critical as the project lies in the territory of the Simpcw First Nation. Liaison with the Adams Lake, the Neskonlith and the Little Shuswap bands is also key.

“The First Nations and other communities have been closely engaged with and we’ve had the First Nations on site conducting archaeology and other environmental data collection,” Handford said.

“It’s also important to note that there are no major [environmental] issues; we’re not going to put our tailings into a lake. We’re not close enough for our work to annoy the neighbours, but we are close enough for them to secure jobs with us,” he said.

And these new jobs will be critical for the local area as the region’s previous mainstay, the lumber and forestry sector, has never fully recovered from the depression into which it sank several years ago, Handford added.

“A lot of mills have closed and a lot of people in the region today commute to work in the oil sands of Alberta. This is tough on family life. We’ve got many people asking: ‘what’s your schedule – I’d love to come and drive truck at Harper Creek’. Really, there’s great community support here,” he said.