British Columbia Mines & Mineral Exploration Overview 2004 Ministry of Energy and Mines - Information Circular 2005-1 BRITISH COLUMBIA MINING AND MINERAL EXPLORATION OVERVIEW 2004 Ministry of Energy and Mines Tom Schroeter, PEng/PGeo; Michael Cathro, PGeo; David Grieve, PGeo; Robert Lane, PGeo; Jamie Pardy, PGeo; Barry Ryan, PGeo; George Simandl, PGeo; and Paul Wojdak, PGeo INTRODUCTION coal. For example, gold reached a 16-year high of over US$450 per ounce in early December. Mineral British Columbia’s mineral resources are strategically exploration expenditures increased to their highest level located to play a role in the international mining industry, since 1991 and are estimated at $120 to $130 million for particularly for North American and Asian markets. The 2004 (Figure 1). The number of new mineral claim units province has a well-defined potential for a wide variety of recorded in 2004 is 47 232, an increase of 30% from the minerals and deposit types. The geoscience database is previous year (Figure 2). The number of total mineral extensive and easily accessed and the provincial units in good standing as of January 1, 2005 was 184 464, government is committed to aggressively improving that up about 18% from 2003. The number of forfeited units in data and encouraging new developments. With attractive 2004 was 12 209, down 10% from 2003. This is the fifth energy costs, a well-developed, all-weather highway year in a row that there has been an increase in new system, rail links and a number of deep-water ports, mineral units recorded and a decrease in forfeited claims, British Columbia has the infrastructure to get coal, another indicator of sustained and growing interest in the minerals and resulting products to markets. province’s mineral resources. Mining is a strong component of the British Both the Mining Exploration Tax Credit Program Columbia economy with 7 metal mines and 9 coal mines, and Exploration Investment Tax Credit for flow-through approximately 27 industrial minerals quarries and mines, investors provide extra incentives to attract risk capital to numerous placer mines and more than 1100 aggregate pits the province. in operation. The Willow Creek and Dillon (Burnt River project) coal mines opened in the northeast and the 300 Gibraltar copper-molybdenum mine re-opened in late 2004. A number of other mine development projects are 250 underway and new mines are expected to open in 2005. 200 During 2004, British Columbia experienced a 150 significant upturn in minerals-related exploration activity 100 which will impact mining developments in the province Millions of Dollars for years to come. Commodity prices for nearly all metals 50 and types of coal rose substantially over the year, led 0 particularly by gold, copper, molybdenum and coking 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004e Figure 1. Mineral exploration expenditures. New Forfeited Good standing 400000 300000 200000 100000 0 Mineral Units Mineral -100000 -200000 1990 1992 1994 1996 1998 2000 2002 2004e Photo 1. The Willow Creek coal mine in northeastern British Figure 2. Mineral units (new, forfeited and good standing). Columbia opened in July, 2004. Mines and Mineral Exploration Overview 2004 1 MapPlace, the British Columbia government’s geoscience map and data information system, had over 4 million hits during 2004, reflecting the interest in finding new mineral resources. 4 3 2 MINING HIGHLIGHTS $ Billions 1 0 British Columbia's operating mines in 2004 (Figure 1988 1990 1992 1994 1996 1998 2000 2002 2004e 5) are forecasting a total value of solid mineral production Figure 3. Solid mineral production value in British Columbia. of $3.39 billion, an increase of 15% over 2003 (Figure 3). Industrial The province ranks third in Canada for the value of its Minerals 10% Lead 0.1% mineral production. Coal is the single most important Zinc 2.4% Coal 31% mineral commodity, and copper is a close second (Figure Silver 5% 4). Despite the increase in the value of production, the actual production dropped slightly for copper, gold, silver Gold 10% and zinc. Molybdenum production increased 164% in value over 2003 to about $350 million. This large increase reflects the much higher molybdenum price for production from the Endako and Huckleberry mines, and Molybdenum + others 10.6% Copper 25% mining of higher grade ore and improvements to the Construction molybdenum circuit at Highland Valley Copper. Mine aggregates 7% production and resources for 2004 are listed in Table 1. Figure 4. Forecast distribution of British Columbia mineral Clean coal production for 2004 is expected to total production by commodity – 2004. 27.1 million tonnes, with a forecast value of cinder, flagstone, industrial and medical/cosmetic clays, approximately $1.1 billion. British Columbia has three tufa, fuller’s earth, bentonite, slag, mineral wool, roofing major coal ports on the west coast - Roberts Bank, south granules, graphite, and gemstones. There are at least 20 of Vancouver, has a capacity of 26 million tonnes per major sites throughout the province where upgrading of year; Neptune terminals (Vancouver Port) has a capacity industrial minerals into value–added products takes place. of 8 million tonnes per year and Ridley Island terminal, Structural materials production, including the near Prince Rupert, has a capacity of 12 million tonnes important construction aggregate sector, is estimated to per year. All three had significant unused capacity in have a value of $240 million. There are aggregate 2004. operations throughout the province and they vary from British Columbia’s industrial minerals production for large pits which supply the major metropolitan areas to 2004 (including sulphur) is estimated at a value of $340 many smaller pits used locally for road construction. million. The most economically significant industrial Placer gold production and exploration in British minerals in British Columbia are magnesite, white Columbia was concentrated in the Atlin, Dease Lake, calcium carbonate, limestone, silica, dimension stone, Manson Creek, Cariboo and Fort Steele areas and small gypsum, sulphur, construction aggregate, and crushed operators ran most operations. rock. Commodities produced in lesser quantities include The provincial mining industry employed a direct jade (nephrite), magnetite, dolomite, barite, volcanic workforce of more than 9300 employees, as well as supporting at least as many spin-off jobs. The province has a total land base of 94.5 million hectares of which there are 27 000 hectares, or 0.028%, of disturbed mining lands which are subject to reclamation. Northwest - Major Mines The Eskay Creek underground gold-silver mine, operated by Barrick Gold Corporation, is expected to produce 9300 kg of gold and 450 000 kg of silver in 2004. It is the fifth largest silver producer in the world and among the richest in terms of value per tonne of ore. Current mine life is estimated to extend until 2008. Exploration was carried out mainly on the Deep Adrian Photo 2. Looking southwesterly over the Eskay Creek gold- and 22 zone areas, to the north and south of the existing silver mine in northwestern British Columbia. mine workings, respectively. 2 British Columbia Mines and Quarries Table Mtn 7 Metal mine Tulsequah Chief 9 Coal mine 29 Major Industrial Mineral quarry Red Chris Mine and Major Quarry Galore Creek Mt Klappan Kemess North Development Projects Kemess 12 Metal Sustut Copper Eskay Creek South (Au-Cu) (Au-Ag) 3 Coal Willow Creek (cl) 3 Industrial Mineral Dillon (cl) Kilometres Morrison Wolverine 100 50 0100200 Trend Huckleberry Endako (Mo) (Cu-Mo-Au-Ag) Cariboo Gold QR Gibraltar (Cu-Mo) Mount Polley Afton Bralorne Fording River (cl) Greenhills (cl) Orca HVC (Cu-Mo-Au-Ag) Line Creek (cl) Quinsam (cl) Elkview (cl) Coal Mountain (cl) Myra Falls (Zn-Cu-Au-Ag) Hills Bar Basin (cl) Eagle Rock Figure 5. Operating mines and major development projects in British Columbia 2004. The Endako open-pit molybdenum mine, operated Mine construction is in progress at the Dillon open by Thompson Creek Mining, has operated for 34 years pit coal mine of Western Canadian Coal Corporation, part and is a low-cost producer. As a result of very strong of its Burnt River coal project. Located 20 kilometres molybdenum prices, the company has embarked on a pit west of Tumbler Ridge, the first shipment of PCI coal was expansion to return to its normal production levels. shipped in December. In 2005, initial production is The Huckleberry open-pit copper-molybdenum forecast at 250 000 tonnes of raw coal. mine, operated by Huckleberry Mines Ltd, produced ore from its East zone pit and shipped the concentrates Central - Major Mines through the port of Stewart to Japan. A large exploration program identified a new potential deposit (Northwest Target), directly north of the Main zone pit. Mine life is The Kemess South open-pit mine, operated by estimated to extend until 2007. Northgate Minerals Corporation, is expected to produce 9300 kg of gold and 34 000 tonnes of copper during 2004. It is the largest gold producer in the province. Existing Northeast - Major Mines reserves will provide mill feed until 2008, but the mine life of the operation could possibly be extended more than Pine Valley Mining opened the Willow Creek coal ten years if the Kemess North deposit is put into mine, 45 kilometres west of Chetwynd. The company has production. Exploration at Kemess South identified an sales of 900 000 tonnes in place through to mid-2005 and additional 12 million tonnes of ore in 2004. hopes to increase the tonnage to 1 to 1.5 million tonnes The Gibraltar open-pit mine reopened in October, per year by 2006. Coal is crushed and screened and 2004, under a joint venture partnership between Taseko shipped raw as a pulverized coal injection (PCI) product Mines Ltd.