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VANCOUVER, BRITISH
COLUMBIA--(Marketwire - Nov. 16, 2010) -
Imperial Metals Corporation (TSX:III) has
completed an update of the Red Chris Copper-Gold Project Feasibility
Study Report dated March 2005 (the "2005 Feasibility")
prepared by AMEC Americas Limited ("AMEC"). Imperial's Red
Chris 2010 Feasibility Study Update (the "2010 Update") is
intended to guide development of the project within its current Provincial
and Federal Approval framework and does not take into account the
results deep drilling carried out by Imperial.
The 2010 Update indicates an after tax internal rate of return
("IRR") of 15.7% at metal prices of US$2.20/lb copper and
US$900/oz gold and a capital cost of C$443 million.
The 2010 Update uses the mining envelope, mining rate and metal
recovery estimates used in the 2005 Feasibility. The block model used
was from the Red Chris Deposit Technical Report: 2010 Exploration,
Drilling and Mineral Resource Update dated May 19, 2010 (the "2010
Technical Report"). The 2010 Technical Report was prepared in
accordance with National Instrument 43-101 and is available on www.imperialmetals.com and
www.sedar.com.
Highlights of 2010 Update -- Reserves of over 300 million tonnes grading 0.359% copper and 0.274 g/t gold provide for a 28 year project life at a milling rate of 30,000 tonnes per day. -- Pre production period of only four months during which 1.8 million tonnes of rock and overburden would be relocated. The Red Chris orebody is exposed at surface resulting in a comparatively limited pre production phase. -- Recovered metal in concentrate would total 2.08 billion lbs copper and 1.324 million oz gold. -- After tax IRR of 15.7% at metal prices of US$2.20/lb copper, US$900/oz gold, US$12.00/oz silver, and exchange rate of CDN$1 to US$0.90. Project payback is 4.58 years. Life of mine production cost per pound of copper at these prices, taking silver and gold as credit, is US$1.22. Capital cost is C$443 million. -- At the October 2010 monthly average metal prices of US$3.76/lb copper, US$1342.60/oz gold, US$23.39/oz silver, and an exchange rate of CDN$1 to US$0.982, the project IRR after tax is 37.9%. The project payback is 1.87 years. Life of mine production cost per pound of copper at these prices, taking silver and gold as credit, is US$1.15.
Summary of 2010 Update
The project is the development of an open pit mining and milling
operation. The mining fleet would include 311mm electric rotary drills,
28m3 hydraulic excavators, 230 tonne capacity
haul trucks and associated support equipment.
Other mining fleet options under consideration include diesel powered
hydraulic drills and electric cable shovels. Ore would be fed to a 1.3m
x 1.8m gyratory crusher for crushing to a nominal -150mm. Crushed ore
would be held in a 120,000 tonne capacity
intermediate stockpile before recovery to the plant.
Plant design is based on a standard porphyry copper flow sheet
employing SAG and ball milling, flotation, regrinding, thickening and
filtering to produce a concentrate for export averaging 27% copper at a
moisture content of 8%. The grinding circuit would include a 10.36m x
4.72m x 11,200kW SAG mill feeding two 5.79m x 8.84m x 5,600kW ball
mills providing a primary grind of K80 of -150 microns. Coarse rejects
from the SAG mill would be crushed in a 600kW pebble mill. Ball mill discharge
would feed two banks of 5 x 100m3 rougher flotation cells followed by a
bank of 5 x 50m3 cleaner cells. Cyclone underflow would be fed to two
932kW tower mills to provide a K80 of -24 microns. The primary and
regrind product sizes were determined by G&T Metallurgical Services
Ltd. to provide the optimum conditions for copper recovery and
concentrate grade. Concentrate would be thickened and filtered and then
loaded on B-Train trucks of nominal 50 tonne
capacity for hauling to the Port of Stewart for shipment to smelters in
the Pacific Rim.
Rock management has been designed to minimize the impact on the
environment. Rock from the open pit would be stacked to the north where
topography allows any runoff to be directed to the open pit and the
tailings storage facility for collection. Low grade material would be
stockpiled to the northeast of the pit, just to the north of the
primary crusher for easy reclaim later in the mine life. The tailings
impoundment area would be located in a valley to the northeast of the
plant. The Company has presented a fish compensation plan to the
Department of Fisheries and Oceans Canada for approval and
recommendation to Environment Canada for commencing Metal Mining
Effluent Regulations Schedule 2 Designation of the tailings impoundment
area.
Plant infrastructure would include upgrade of the existing temporary
road and an extension to a 23 kilometre
access road from Highway 37 near Tatogga
Lake, a 250 person camp, equipment maintenance shop, warehouse,
administration office, satellite communication for voice and data, and
explosives storage and/or manufacturing facility and magazines.
The project assumes power would be supplied by an extension to the
Northwest Transmission Line from Bob Quinn. The project capital
includes the cost of building a 115 kilometre
power line from Bob Quinn north along Highway 37 and then branching off
to the mine site following the mine access road.
Mine capital costs have been based on the purchase of all new
equipment. All shovels, drills, haul trucks, dozers and graders would
be equipped with fleet management systems to improve safety and
efficiency.
The project would employ approximately 300 hourly, salaried and
contract personnel, and would operate on a fly-in/fly-out basis on a
two week rotation. Chartered aircraft would fly employees to the Dease Lake airstrip from where they would be bused
to the project site.
Following exhaustion of reserves, the project would close and be
reclaimed. All equipment and facilities would be removed and the area
graded and seeded, the rock storage areas and dam walls covered in till
and seeded, drainages constructed so any effluent from the rock storage
areas would be directed into the open pit for collection. Provision
would be made for a water treatment plant to recover metals, including
copper contained in any effluent from the open pit once it eventually
fills with water after completion of mining operations. The water
treatment plant would be designed for self sufficiency with the value
of recovered metals covering the operating and sustaining capital cost
of the plant. The project capital cost includes funding for a surety
bond to guarantee future reclamation obligations.
The project obtained BC Environmental Assessment Certificate in 2005,
which was extended in July 2010, and obtained Canadian Environmental
Assessment Act approval in 2006, which was confirmed by the Supreme
Court of Canada in January 2010 following a third party challenge. In
July 2010 the Company submitted a Joint Application for the Mines' Act
Permit and the Effluent Discharge Permit under the Environmental
Management Act.
Estimation Reserves and Resources
The Red Chris copper/gold deposit has several identified mineralized
zones. The 2010 Update uses the same ultimate pit shell, covering the
Main and East zones, developed using a Lerchs-Grossman
algorithm in 2005. However, the ultimate open pit was redesigned for
the 2010 Update to eliminate irregular bench features and include a
detailed and practical smoothed pit design with ramps. The more linear
pit walls would improve the overall wall stability and ease
construction. The ore reserves were updated using the computer
generated block model in the 2010 Technical Report.
Mineable Reserves and Mineral Resources
The mineable reserves estimate in the 2010 Update for the pit shell
designed in 2005 are provided below, and are all contained within the
upper portion of Main and East zones.
---------------------------------------------------------------------------- Tonnes Cu % Au g/t ---------------------------------------------------------------------------- Proven and Probable 301,549,000 0.359 0.274 ----------------------------------------------------------------------------
The Red Chris property hosts
significant mineral resources. The resource for the measured and
indicated category and the inferred category, a copper cut-off grade of
0.10% of the entire property, including all zones of mineralization,
are provided below. The estimated resources at different categories and
cut-offs are documented in the 2010 Technical Report which includes a
full description of the estimation method and the sampling, assaying
and QA/QC procedures.
---------------------------------------------------------------------------- 2010 Technical Report ---------------------------------------------------------------------------- Measured and Indicated ---------------------------------------------------------------------------- Tonnes 619.42 M ---------------------------------------------------------------------------- Cu % 0.38 ---------------------------------------------------------------------------- Au g/t 0.36 ---------------------------------------------------------------------------- Contained lbs copper 5.14 B ---------------------------------------------------------------------------- Contained oz gold 7.16 M ---------------------------------------------------------------------------- Inferred Mineral Resource ---------------------------------------------------------------------------- Tonnes 619.13 M ---------------------------------------------------------------------------- Cu % 0.30 ---------------------------------------------------------------------------- Au g/t 0.32 ---------------------------------------------------------------------------- Contained lbs copper 4.12 B ---------------------------------------------------------------------------- Contained oz gold 6.43 M ----------------------------------------------------------------------------
Risk Assessment
The estimates of mineral resources and mineral reserves have been
prepared and calculated internally by Art Frye, Mine Operations Manager
for Mount Polley Mining Corporation, and by
Greg Gillstrom, P.Eng,
Senior Geological Engineer with the Company, designated as the
"Qualified Person" as defined under National Instrument
43-101 for the resource calculation.
The determination of mineral resources for the Red Chris property has
been based on the results of data from exploration drill programs
conducted between 1974 and 2009 with data from 365 diamond drill holes.
Since 2005 several geotechnical studies have been completed. In 2010
AMEC Earth and Environmental was commissioned to complete a detailed
site investigation and design of the proposed tailing storage facility.
The majority of this work is now complete, and the findings have been
incorporated into the 2010 Update.
The 2010 Update has taken the results of the 2005 Feasibility and
updated the capital and operating costs. The pit is essentially as designed
in 2005, with some minor smoothing, and mineable tonnage and grades
have changed slightly reflecting the current cost and price regime, and
the results from additional drilling. Metallurgical recoveries and
plant design remain as in the previous study. The project is dependent
on the completion of a 335 kilometer long 287kV transmission line, the
Northern Transmission Line, an initiative to bring the electricity grid
to northwest British Columbia.
Changes in metal prices, operating costs, exchange rates,
transportation and shipping costs, smelting and refining costs,
taxation, legislation could individually or collectively have a
material impact on the reserves to the point where the project could
become uneconomic. The project also needs to complete further
permitting requirements before construction or operation of the mine
can begin.
The following charts demonstrate the sensitivity of the project's IRR
to changes in copper and gold pricing, CDN/US Dollar exchange rate,
capital and operating costs, mill head grade, mill recovery, and mill
through-put. The project's IRR is most sensitive to changes in copper
price and the CDN/US Dollar exchange rate, and less so to gold price
and capital cost.
To view the charts accompanying this press release, please click on the
following link: http://media3.marketwire.com/docs/iii1116.pdf
National Instrument 43-101 Compliance
The 2010 Update to the 2005 Feasibility used the computer generated
block model described in the 2010 Technical Report, which was prepared
in accordance with the guidelines of National Instrument 43-101.
Details on the methodology used to create the block model are described
in the 2010 Technical Report, available on www.imperialmetals.com and
www.sedar.com.
Additional details relating to the 2005 Feasibility are provided in the
National Instrument 43-101 compliant Technical Report on the Red Chris
Copper-Gold Project December 16, 2004, filed by bcMetals
Corporation, available on www.sedar.com.
Operating costs for the 2010 Update have been prepared by Imperial staff,
utilizing cost information from similar mines in British Columbia
operated by the Company. Merit Consultants International Inc. has
prepared the capital cost estimate for the 2010 Update, except for the
mining area costs which were estimated by Imperial staff. Merit
completed the cost estimate for the 2005 Feasibility and thus had a
thorough knowledge of the project. Revised quantity take-offs for the
earthworks in the tailings storage facility were supplied by AMEC Earth
and Environmental based on its 2010 site investigation and design work.
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