Arctic Deposit – Overview & Development Highlights
The Arctic deposit is in the Ambler Mining District of Alaska – a safe, mining friendly jurisdiction approximately 470 kilometers northwest of Fairbanks.
We announced the results of the Arctic Feasibility Study (FS) on August 20, 2020 and filed the technical report titled “Arctic Feasibility Study Alaska, USA NI 43-101 Technical Report” on October 2, 2020.
The FS for the Arctic Project describes the potential technical and economic viability of establishing a conventional open-pit copper-zinc-lead-silver-gold mine-and-mill complex for a 10,000 tonne-per-day operation. The base case scenario utilizes long-term metal prices of $3.00/lb for copper, $1.10/lb for zinc, $1.00/lb for lead, $18.00/oz for silver and $1,300/oz for gold. The FS was prepared on a 100% ownership basis and all amounts are in US dollars.
Highlights of the 2020 Arctic Project Feasibility Study are as follows:
- Pre-tax Net Present Value, at an 8% discount rate, ("NPV8%") of $1,550.9 million calculated at the beginning of the three-year construction period and an Internal Rate of Return ("IRR") of 30.8% for the base case.
- After-tax NPV8% of $1,134.7 million and after-tax IRR of 27.1% for the base case.
- Initial capital expenditure of $905.6 million and sustaining capital of $113.8 million for total estimated capital expenditures of $1,019.4 million over the estimated 12-year mine life. In addition, closure and reclamation costs are estimated at $205.4 million.
- Estimated pre-tax and after-tax payback of initial capital within 3 years for the base case at $3.00/lb copper.
- Minimum 12-year mine life supporting a maximum 10,000 tonne-per-day conventional grinding mill-and-flotation circuit to produce copper, zinc and lead concentrates containing significant gold and silver by-products.
- Life-of-mine strip ratio of 6.9 to 1.
- Average annual payable production projected to be more than 155 million pounds of copper, 192 million pounds of zinc, 32 million pounds of lead, 32,000 ounces of gold and 3.4 million ounces of silver for life of mine.
- A capital intensity ratio on initial capital of approximately $6,432 per tonne of average annual copper equivalent produced.
- Estimated cash costs of $0.32/lb of payable copper (C1 cash costs include on-site mining and processing costs, road tolls and maintenance, transport, royalties, and is net of by-product credits).
- Total "all-in" cash costs (initial/sustaining capital, operating, transportation, treatment and refining charges, road toll, and by-product metal credits) estimated at $0.98/lb of payable copper.
- Management believes economic indicators justify moving forward with permitting.
More information on the Arctic project can be found in the National Instrument 43-101 report titled, “Arctic Feasibility Study Alaska, USA NI 43-101 Technical Report” released on October 2, 2020 with an effective date of August 20, 2020.
Property Description & Location
The Arctic deposit is located in the Ambler Mining District in the southern Brooks Range, in the NWAB of Alaska. The Property is geographically isolated with no current road access or nearby power infrastructure. The Property is located 270 kilometers east of the town of Kotzebue, 36 kilometers northeast of the village of Kobuk, and 260 kilometers west of the Dalton Highway, an all-weather state maintained highway.
Geology & Mineralization
On the Property, polymetallic volcanogenic massive sulphide (“VMS”) style deposits (including Arctic) and prospects are hosted in the Ambler Sequence, a group of Middle Devonian to Early Mississippian, metamorphosed, bimodal volcanic and volcaniclastic rocks with interbedded metasediments. VMS-style mineralization is found along the entire 110 kilometer strike length of the district.
Mineralization at Arctic occurs as semi-massive to massive sulphide beds within primarily graphitic and quartz mica (+/- chlorite) schists. The sulphide beds average 4 meters in thickness but vary from less than 1 meter up to as much as 18 meters in thickness. The bulk of the mineralization is within an area of roughly 1 km2 with mineralization extending 250 meters below the surface. Mineralization is predominantly coarse-grained sulphides consisting mainly of chalcopyrite, sphalerite, galena, tetrahedrite, arsenopyrite, pyrite and pyrrhotite. Trace amounts of electrum and enargite are also present.
Maps & Cross Sections