IDM reports feasible mine plan for Red Mountain gold project

VANCOUVER (miningweekly.com) – Exploration and development company IDM Mining has released the positive results of a feasibility study on the Red Mountain gold project, located near the town of Stewart, in north-western British Columbia.

The 2017 study confirms the positive economics for a near-term, high-grade, bulk mineable underground gold operation at Red Mountain.

It demonstrated a high-margin, low-capital underground gold mine with a short development timeline, producing 91 000 oz/y of gold over the first two years of operation, with a life-of-mine (LoM) average output of 78 000 oz.

“With these positive results now in place, our highest priority is the ongoing exploration and resource expansion drilling adjacent to current reserves, with the objective of extending the potential mine life for Red Mountain. These zones remain open for expansion both along strike and down-dip,” stated president and CEO Robert McLeod in a press release.

At a gold price of $1 250/oz and an exchange rate of C$1 to $0.76, the project base case estimate generates a pre-tax net present value, at a 5% discount rate, of C$155-million and an internal rate of return of 40%.

The proposed mine will have a 1 000 t/d mill operating year-round over an initial period of about six years. The mine will produce 425 000 oz of gold and 1.17-million ounces of silver.

The initial capital expenditure to fund construction and commissioning is estimated at C$135.7-million, with a life-of-mine cost of C$202.4-million (including an average of 10% contingency and C$8.6-million in closure costs. The average operating cost is estimated to be C$140.02/t processed.

All-in sustaining costs are expected to be $611 per payable ounce.

The company said it will be filing its project application report for the project “imminently” with British Columbia and Canadian regulatory agencies.

The company aims to have approvals in place for a shovel-ready project by mid-2018.

“We believe Red Mountain is one of the few development-stage precious metal projects in Canada that could see near-term commercial operations,” executive chairperson Michael McPhie noted.

The mine plan is based on a ramp-access underground mining operation, producing an average of 1 045 t/d of ore from a blend of mining methods. This will entail a combination of transverse and longitudinal longhole stoping for mining blocks dipping steeper than 55°, which represents 63% of the reserves. This is the preferred mining method from a productivity and operating cost perspective, the company said.

It will also employ cut-and-fill for mining areas with dips of less than 55° and zones not amenable to longhole stoping. The remaining 4% of the potentially mineable tonnage comes from access and stope cross-cut development.

Red Mountain has proven and probable reserves of two-million tonnes grading 7.53 g/t gold and 21.86 g/t silver for 473-million contained ounces of gold and 1.37-million contained ounces of silver. The project also has measured and indicated resources of 2.07-million tonnes grading 8.75 g/t gold and 25 g/t silver, for 583 000 oz gold and 1.66-million ounces of silver.