Looking ahead in B.C. and Yukon

Recent strong gold and metal prices have many mine-makers
looking to western Canada for opportunity

Seemingly, North Americans look to the west for opportunity. And when we in Canda look left, we see British Columbia and Yukon. Opportunities abound there for miners, so let us jump in.

Where better to begin than with one of the world’s largest copper, gold, and silver resources all wrapped up in the Kerr-Sulphurets-Mitchell (KSM) project belonging to Seabridge Gold.

With reorganization and a new focus on gold, the company bought what is now the KSM project from Placer Dome in 2000. The property is located 65 km northwest of Smithers, B.C. Exploration began in earnest in 2006, and by 2010 a prefeasibility study (PFS) was released estimating there were 8.5 million oz. of gold, 7 billion lb. of copper, and 133 million oz. of silver in the ground.

Since the first PFS, Seabridge has repeatedly updated the reserves and resources until they stand today at 47.3 million oz. gold, 7.32 billion lb. copper, and 160 million oz. silver in the proven and probable reserves. That includes 2.29 billion tonnes grading 0.64 g/t gold, 0.14% copper, and 2.2 g/t silver. The totals include three separate deposits – Sulphurets, Mitchell, and East Mitchell.

Inclusive of reserves, the measured and indicated resource contains 88.7 million oz. gold. 19.63 billion lb. copper, and 417 million oz. silver. The inferred resource has tremendous potential, too, as it is estimated to contain 71.5 million oz. gold, 38.48 billion lb. copper, and 461 million oz. silver. The Kerr and Iron Cap deposits are included in this total.

If KSM is not the world’s largest undeveloped gold-copper-silver resource, it must certainly be among the top. And the numbers above were conservatively calculated at prices of US$1,300/oz. gold, US$3/lb. copper, and US$20/oz. silver. With the exception of silver, those prices continue to rise.

The 2022 PFS put after tax net present value with a 5% discount (NPV5%) for KSM at US$7.9 billion, the after-tax internal rate of return (IRR) at 16.1%. Initial capital costs were pegged at US$6.4 billion and sustaining costs at US$3.2 billion, but the after-tax cash flow would be US$23.9 billion.

With recent spot prices for gold (US$2,200/oz.), copper (US$4/lb.), and silver (US$25/oz.), according to Seabridge’s November 2024 corporate presentation, those numbers continue to climb. The after-tax cash flow becomes US$35.9 billion, the NPV5% grows to US$12.7 billion and the after-tax IRR is 21.0%.

The PFS mine plan is based on three open pits with underground mining to follow. It includes less than a quarter of total mineral resources and does not include the Kerr or Iron Cap deposits. Over at least 33 years of mining, annual production at KSM will be 1.4 million oz. gold, 250 million lb. copper, and 3.8 million oz. The tailings permit specifies a capacity of 2.3 billion tonnes, or enough to manage only 21% of the known resource.

The early start of site construction began in 2021 and to date, Seabridge has spent $444 million in northwestern B.C., with a significant portion of the spend going to First Nation related companies. Work has been focused on roads, bridges, camps, fish compensation, and power infrastructure.

With major permits in hand (the provincial and federal environmental okays were given in 2014), KSM is moving forward. Most everything is in place with the exception of the billions needed to bring it to production.

Seabridge is currently hunting for a deep-pocketed joint venture partner. We look forward to a timely announcement.

Only 20 km away from KSM, Seabridge is also advancing the Iskut project. This undertaking includes the former Johnny Mountain gold mine and the Bronson Slope copper-gold deposit. Add in the company’s Courageous Lake gold project in the Northwest Territories, the 3 Aces gold project in Yukon, and the Snowstorm gold project in Nevada, and CMJ readers can expect to hear more from Seabridge Gold.

Artemis at Blackwater

Artemis Gold acquired the Blackwater property in August 2020 and began construction the following year. In late 2024, the first gold pour was made, and British Columbia had its newest gold mine. The project is now in the final commissioning stage.

Having a new gold mine is good news, but expanding it is already in the works. Phase two expansion will take annual Blackwater output to about 600,000 gold equivalent oz. from the phase one production of 400,000 gold equivalent oz. The timing of this work

will be based on the ability to fund it through operating cash flows rather than equity financing.

Artemis has a solid plan. Phase one carried a price tag of roughly $730 million to $750 million, creating a processing plant capable of handling 12 million tonnes of ore annually. Phase two could begin in year three and would bring throughput up to 15 million t/y at a cost of about $592 million, and a phase three beginning in year seven would boost mill capacity further to 25 million t/y at a cost of $852 million.

The Blackwater project has a peculiarity in its design: haulage from the pit to the plant to the tailings storage facility is all downhill. That will add up to savings in diesel consumption. Caterpillar financed $140 million for the original mining fleet, but Artemis has the option to begin placing orders for a zero-emissions fleet next year for shipment in 2029.

The company recently upped its gold price assumption to US$2,000 from US$1,400 and boosted the resource base. Total measured and indicated resources now stand at 116 million tonnes grading 0.64 g/t gold equivalent and containing 2.5 million gold equivalent oz.

The Blackwater deposit is open to the north, northwest, and at depth in the south. The land package is 1,500 km2 and largely underexplored. That gives the project long-term expansion potential.

Other projects in B.C.

British Columbia is likely to become a major Canadian gold producer as several other projects are active. Talisker Resources has taken its Bralorne project to construction. Skeena Resources has completed a feasibility study (FS) for its Eskay Creek project which includes a former gold producer, and the company also owns the former Snip gold mine 40 km away. Osisko Development has its Cariboo project at the permitting stage. And both the Yellowhead project of Taseko Mines and the Spanish Mountain project of Spanish Mountain Gold have prefeasibility studies (PFS) in hand.

For the non-gold bugs, PFSs have been completed by FPX Nickel for its Baptiste nickel discovery at the Decar property and by Defense Metals for the Wicheeda niobium-rare earths project.

Silver lining in Yukon

Hecla Mining, the oldest silver miner on the NYSE and largest U.S. silver producer, is active at the former Keno Hill silver property in Yukon. The area produced over 200 million oz. of silver from 1913 to 1989. With Hecla’s expertise there is no reason the area cannot again be a leading silver producer, maybe Canada’s largest.

The property lies about 350 km north of Whitehorse, Yukon. It covers 242 km2 with numerous mineral deposits and more than 35 past-producing mine sites. Silver guidance for 2024 was 2.7 million to 3 million oz. as the project reaches full capacity.

Hecla acquired Keno Hill through its takeover of Alexco Resource in 2022. There are five deposits at Keno Hill – Bellekeno, Lucky Queen, Flame & Moth, Onek, and Bermingham. The property is fully permitted and includes a 400 t/d mill, camp, and surface facilities at the Flame & Moth site.

The proven and probable reserves total 2.1 million tonnes grading 26.6 g/t silver, 0.01 g/t gold, 2.5% zinc, and 2.8% lead, containing 55.1 million oz. silver, 13,000 oz. gold, 104.8 million lb. zinc, and 116.3 million lb. lead. Reserves are based on US$17/oz. silver, US$1,600 gold, US$1.15/lb. zinc, and US$0.90/lb. lead.

As far as resources go, the measured and indicated portion is 4.5 million tonnes grading 7.5 g/t silver, 0.0006 g/t gold, 3.5% zinc, and 0.90% lead, containing 33.9 million oz. silver, 26,000 oz. gold, 314.7 million lb. zinc, and 82.2 million lb. lead. The inferred resource is 2.8 million tonnes grading 11.2 g/t silver, 0.003 g/t gold, 1.8% zinc, and 1.1% lead, containing 31.8 million oz. silver, 9,000 oz. gold, 103.7 million lb. zinc, and 64.1 million lb. lead. Resources are based on US$21/oz. silver, US$1,750/oz. gold, US$1.35/lb. zinc, and US$1.15/lb. lead.

Hecla has chosen underground development for the Bermingham and Flame & Moth deposits, the initial production targets. (Lucky Queen is in the advanced exploration stage). All deposits are characterized by high-grade, narrow veins, and challenging ground conditions. The company is using a mechanized cut and fill method followed by cemented rock fill. Mining is currently estimated to end in 2034.

Hecla budgeted US$8.4 million for exploration in the Keno Hill district last year, and numerous underexplored targets have been identified.

Hecla is also hunting gold in Yukon at the Rackla property acquired with the takeover of ATAK Resources in July 2023. There are two separate projects – Nadaleen and Rau. Nadaleen hosts Canada’s first Carlin-type gold discovery at the Osiris deposit. The Rau project hosts the advanced exploration stage Tiger deposit.

If that is not enough to make Rackla interesting, the property also hosts silver-lead-zinc, gold-copper, and gold occurrences.

Other projects in Yukon

The next most advanced project in Yukon is the feasibility-stage Coffee gold project owned by Newmont. Coffee is a proposed open pit and heap leach gold producer. It has been approved by both the federal and territorial governments, but other permits are pending.

The Nickel Shaw project owned by Nickel Creek Platinum is located about 300 km northwest of Whitehorse. The 2023 PFS calls for an open pit mine and processing plant, both of conventional design. Proven and probable reserves total 307.7 million tonnes, grading 0.26% nickel, 0.16% copper, 0.014% cobalt, plus gold, platinum and palladium. The deposit contains 1.4 million lb. nickel, 892 million lb. copper, and 96 million lb. cobalt.

Granite Creek Copper released a preliminary economic assessment for the Carmacks copper-gold project in 2023 that includes an open pit and conventional processing plant. It has a measured and indicated in-pit oxide resource of 15.7 million tonnes grading 0.94% copper and containing 326 million lb. copper. There is also an in-pit sulphide resource of 19.2 million tonnes grading 0.71% copper, containing 300 million lb. copper, in the measured and indicated categories. A measured and indicated sulphide resource below the pit has been estimated to contain 1.4 million tonnes grading 0.82% copper, containing 25 million lb. copper.

Conclusion

The old saw about going west for opportunity seems to be true for British Columbia and Yukon. There is a lot of activity among the gold hunters, but that is not the only opportunity for making new mines. The westernmost portion of Canada looks to be a solid producer of precious and base metals and several critical minerals.

All it takes now is patience, money and time to create future opportunities.