Table 5: Zinc Concentrate Trace Element Analysis
| Element |
Symbol |
Unit |
Reported Concentration |
Typical Smelter
Penalty Threshold o |
|
|
|
|
|
| Antimony |
Sb |
ppm |
Less than 0.5* |
1,000 |
| Bismuth |
Bi |
ppm |
Less than 0.1* |
1,000 |
| Cadmium |
Cd |
ppm |
864 |
4,000 |
| Cobalt |
Co |
ppm |
3 |
1,000 |
| Copper + Lead |
Cu + Pb |
% |
0.23 |
3.0 |
| Fluorine |
F |
ppm |
Less than 20* |
300 |
| Iron |
Fe |
% |
2.6 |
8.0-9.0 |
| Magnesium |
MgO |
% |
0.36 |
0.35 |
| Manganese |
Mn |
ppm |
100 |
12,500 |
| Mercury |
Hg |
ppm |
0.31 |
50 |
| Silica |
SiO2 |
% |
Less than 0.21* |
3.5 |
Pine Point zinc concentrates are expected to be predominantly smelted in North America using long-term benchmark contract prices with positive adjustments to account for its high-quality. The remaining portion is expected to be sold into both the Asian spot and benchmark contract markets.
Lead concentrates will be mainly sold into the Asian spot and benchmark contract markets with only a minor North American component. Both spot and benchmark contracts used long-term averages.
Proposed Infrastructure Upgrades and Indirect Costs
The Pine Point Project is located 60 km east of the town of Hay River in the Northwest Territories, on the south side of Great Slave Lake. Established infrastructure consists of an active power substation, paved GNWT highway access and one hundred kilometres of pre-existing 25-metre-wide haul roads from the original mining operation that provide access to all major deposit areas. The town of Hay River is serviced by an airport and a paved road from Alberta. The town is also host to a railway head operated by the Canadian National Railway.
The proposed Project will comprise of 55 mining sites(47 Open Pits and 8 Underground deposits), one central concentrator plant site,and envisions the main electrical substation will feed 9 MW during the winter months and 12 MW during the summer. The power requirements will be provided by theNorthwest Territories Power Corporation through the Taltson hydro-electric grid.The construction period is estimated to be 18 months long.
Additional power will be supplied by mobile LNG fuelled generators that can be quickly moved to the various sites requiring power and minimizing the amount of transmission lines needed as several open pit mines have a mine life of less than three years. Further studies will aim to optimize the number and capacity of these LNG power generation units.
The main offices, warehouse, and auxiliary camp facilities (“Plant Site”) will include the new central concentrator, maintenance and truck shop, administration offices and service buildings, mine dry, cafeteria, fitness room and dormitory, a pumping station for fresh drinking water and fire protection, as well as a control gate and parking area.
Overburden stockpiles and waste rock stockpiles will be located nearby planned open pit mines where necessary and waste rock will also be deposited in former historical open pit mines. The overburden and waste rock will also be used for progressive reclamation where feasible.
There will be no Tailings Management Facility (“TMF”) as certain former open pits from the Cominco Ltd. era will be used for tailings disposal and then covered by Pre-concentrator reject waste rock material and finally covered with coarser sterile waste rock.
Indirect costs such as engineering, procurement and construction management, temporary facilities for construction and other related items are estimated at $68.2 million. An additional $89.4 million has been budgeted over the LOM as contingency for specific direct and indirect costs.
Water Management and Dewatering Plan
Over its 24-year production history from 1964 to 1988,several studies were completed to evaluate and manage water during the Cominco Ltd. era. Using methodologies such as dewatering wells, grouting and mineplanning which considered hydrogeology, a preliminary dewatering plan was prepared for the Pine Point Project’s PEA.
For the North, Central and East Mill Zones, open pit mines were grouped into clusters measuring 3 kilometers long and 1 kilometer wide. Generally, pits located within a cluster are mined in sequence to reducede watering requirements. Lowering the water table within the deepest pit within a cluster will potentially reduce water management at that time for surrounding pits. Utilizing this type of dewatering strategy will help to optimize overall pumping rates and power requirements.
To reduce water management in underground mines in the West Zone, grouting was selected as the preferred water inflow restriction methodology. Discussions with experts and previous employees of Pine Point Mines during the Cominco Ltd. era benefitted the analysis and grouting was chosen as the preferred method to reduce water inflow.
Current overall dewatering costs are approximately in-line with historical dewatering records.
Environment and Closure Plan
All mining projects located in the NorthwestTerritories are assessed in accordance with the Mackenzie Valley Resource Management Act (“MVRMA”). Environmental assessments are conducted by the Mackenzie Valley Environmental Review Board (“MVEIRB”) and includes all relevant federal agencies, such as ECCC and DFO, as parties to the process.
At the completion of the environmental assessment (“EA”),ifthe board recommends the Project be approved, the Mackenzie Valley Land and Water Board (“MVLWB”) will process the proponents’ applications for a Water License and Land Use Permit through a public process.
A closure and rehabilitation plan estimate for the Project has been developed by WSP as required by the MVRMA. Reclamation costs were estimated at $62.8 million, less $15.6 million of equipment salvage value, resulting in a reclamation cost (net of salvage value) of $47.1M.
Activities during closure will include the dismantling of the buildings and infrastructure erected for the operations of the mines and processing plant, the closure of the tailing deposition areas in the former open pit mines, waste rock stockpiles and reclamation of other areas disturbed during the project life. This cost estimate includes both the cost of site reclamation as well as post-closure monitoring.
Stakeholder Engagement
The Company has taken a proactive approach toward working and consulting with local indigenous and non-indigenous communities that would be impacted by the Project. Consultation on the Project with the communities was initiated in 2017 and has continued with frequent notifications on project activities, meetings, open house presentations and employment and contracting opportunities.
Both the Aboriginal and non-Aboriginal communities have expressed strong support for the Project, with the objective of maximizing the economic benefits for local communities – specifically with a focus on employment and entrepreneurial opportunities throughout the various phases of the Project.
The realized Project would have a significant impact in the Northwest Territories, with the potential of generating over C$529M in combined federal and territorial tax revenue and contributing approximately 258 well remunerated jobs during the production phase and approximately 395 jobs during the construction period.
MRE Highlight
- Indicated Mineral Resource: 12.9Mt grading 6.29% ZnEq (4.56% Zn and 1.73% Pb) representing approximately 25.5% of the declared tonnage in the updated 2020 MRE.
- Inferred Mineral Resource: 37.6Mt grading 6.80% ZnEq (4.89% Zn and 1.91% Pb)
- Mineral Resources are 80% within surface pit constrained and 20% underground deposits. The increase in underground resources is attributed to the change in concept ofthe West Zone to underground mining methods to be consistent with the PEA.
- Drilling by Osisko Metals completed in H2 2019 in the East Mill Zone successfully extended the mineralization between separate pits. Drilling reduced the distance between the pits (see N39 Surface Map) and increased tonnage by 13% with a 3%increase in ZnEq grade.
- Indicated Mineral Resources are attributable to the inclusionof the available results from the 2018-2020 drilling campaign and the incorporation of Differential GPS survey data across the Project, as well as including several resampled and twinned historical drill holes from the Cominco Limited era.The difference in tonnage between the 2019 and 2020 MRE is almost exclusively attributed to the change of mining concept in the West Zone to underground which was partially offset by the addition of tonnage in the East Mill Zone. The tonnage that was removed from the mineral inventory in the West Zone were tonnes that graded between the cut-off of 2.0%ZnEq in the previous pit-constrained methodology and the new underground cut-off grade of5.0% ZnEq. All other zones saw minor change in tonnes and grade.
