(FinancialPress)—A new copper-gold-moly mine may be coming to Vancouver Island, with promising economics for decades to come—as long as the jurisdiction’s challenges can be overcome.
Late last week, micro-cap explorer NorthIsle Copper and Gold (OTC:NTCPF)(TSX.V:NCX) released a preliminary economic assessment (PEA) on its proposed North Island open-pit mine, claiming the project could produce 75,000 tonnes per day, for 22 years.
Despite being a jurisdiction known for its challenges regarding building mines, NorthIsle’s management remain quite positive of the potential of the mine, which would reside approximately 200 miles to the northwest of the reclaimed Island Copper mine, previously operated by BHP Billiton (NYSE:BHP).
“We are very pleased with the results of our maiden PEA,” said Jack McClintock, President of NorthIlse in a press release.
“This PEA shows the Project can be built and operated with excellent returns based on conservative metal prices.”
According the PEA, the open-pit mine would produce 82 million pounds of copper, 79,000 ounces of gold, and 3 million pounds of molybdenum. Total indicated resources are 456.5 million tonnes at 0.2% copper, 0.25 g/t gold, and 0.008% molybdenum.
The cost of the project is an estimated CAD$1.3 billion (approx. USD$ 1.05 billion).
Now that several of the most important economic questions have been answered, the next challenge will be geopolitical, as a new government in the province of British Columbia presents a major hurdle.
The previous BC Liberal government was known to be quite favourable to the resource sector, especially with its track record of successfully opened mines during its 16-year reign in government, including the Brucejack project in Northern BC, which is an $811-million underground gold mine.
However, times have changed, and so has the government.
A bad taste in the mouth of the public was left when lacklustre government oversight was blamed for the tragic tailings pond breach disaster at Mount Polley in 2014.
The newly-established government formed through a coalition between the further-left New Democratic Party and the Green Party could be the barrier that prevents this project from happening.
Believed to have a mandate of preventing any future Mount Polley type incidents, the NDP-Green coalition has been public with its opposition to mining and energy projects.
Recently the government has sought intervenor status in court challenges against the Canadian federal government’s approval of a $7.4-billion pipeline project called the Trans Mountain project which would tie together petroleum suppliers in Alberta and Saskatchewan with tankers off of the Pacific Coastline.
Undeterred by sunk costs, the NDP-Green coalition has also mulled over the cancellation of the Site C hydro power dam, on which construction had already began under the Liberals.
Given that the NDP-Greens have overwhelming support of residents on Vancouver Island (carrying 13 of 14 possible seats in the Legislature), it’s not farfetched to believe that this project too will be hampered by government blockades.
Officially, the PEA was the first publicly released study on the Hushamu and Red Dog deposits, where were discovered in the 1960s. If a government intervention blocks further development of the project, expect another long gap before another project is proposed on Vancouver Island.