The Blackwater gold project has been acquired by a gold producing company who hope to see an open pit mine up and running at the site by 2017.
The project is located 100 kilometres south of Vanderhoof on the Nechako Plateau and was sold for $500 million by junior mining company Richfield Ventures who have been conducting gold exploration at the site for a number of years.
New Gold, an intermediate gold producer with other projects in Mexico, the United States and Australia, closed the deal with Richfield Ventures at the end of May, officially taking over the site on June 1 this year.
Representatives from New Gold stopped by in Vanderhoof at the last council meeting on July 20 to talk about the project.
“This project is at the forefront of our stove … and we’re really excited about it,” said Bob Gallagher, President and Chief Executive Officer of New Gold.
“The ultimate objective is to build Blackwater into a successful project that contributes significantly to the economic well being of all the stakeholders and shareholders,” he said.
The gold present at the site is relatively low grade, Gallagher explained, which means a lot of capital is required to extract the mineral.
“There’s basically one gram of gold per ton of rock,” he said.
“That means if you can imagine a million grains of sand … one of them would be gold.”
“And that means that it takes a lot of capital … that’s why companies like Richfield end up selling it to the bigger guys,” he said.
The site has direct access from Vanderhoof via the Kluskus Forest Service Road and then another unnamed logging road for the last 20 kilometres.
BC Hydro have identified four alternate right-of-ways for a high voltage powerline to the mine.
A 40-50 man camp is already located at the site, but New Gold are currently in the process of expanding it to a 100 man camp which they hope will be completed by the middle of October this year.
A number of contractors from Vanderhoof are currently working on the camp expansion.
Drilling at the site also continues, and plans are to bring more drills in and to continue drilling through the winter.
“Basically our next stage is to do a lot of drilling.
“We’re currently using five drills … and we hope to get the camp built so we can bring in five more drills and get ten going,” said Gallagher.
At present it has been announced that there is an estimated four million ounces of gold at the site, but Gallagher hopes the figure will end up being a lot more than that.
“Some of the biggest deposits in the world are 10 million ounces and up and that’s considered huge … we think … that we’re going to move well above four million – I don’t know if we’ll make it to ten but well above four million,” said Gallagher.
By the end of 2012, New Gold hope to have a project description written out which will describe how big the project will be and what the general concepts are. The project description document is what initiates the permitting process which takes about three years.
“Our intention is not just to develop that document and deliver it to the Environmental Assessment Office – we will also bring that document back to the public, to First Nations etc. and talk about it,” said Gallagher.
“There will be lots of public comment during the permitting process and if necessary we will change our plans to develop something that makes sense for everybody,” he said.
Environmental baseline plus waste and water management studies have already been started and are ongoing.
The project is located in a very sparsely populated area, with approximately three ranches in a 20 kilometre radius of the site.
Site drainage will be confined to Davidson Creek and the Nechako River and New Gold says that despite the projects name, there will be no impact to the Blackwater Creek catchment.
While Gallagher says he can’t guess at the size of the mine yet, New Gold plans to build it to have a 12-15 year life minimum.
He also estimated that the mill is going to be a similar size to those at other nearby mines such as Endako or Huckleberry.
“It will be about that size, so that’s between 40-60,000 tons a day,” said Gallagher.
He added that the Blackwater project will be unique to many other mines in B.C. because the gold product will be produced at the site.
“Most of the copper mines here produce a concentrate which will be trucked down to the coast and shipped to Asia … but what we’re doing here is we’re going to produce gold bars,” said Gallagher.
“So we’ll probably truck them to the airport here and fly them out … but we’ll have like three flights a week and only one will have the gold and if you’re thinking of the trucks, we’ll have three of those so you’d have to be pretty lucky,” he joked.
New Gold hopes to have both provincial and federal approval for the mine by the end of 2014. Once final approval is received the construction of the mine will start which should take between two to two and half years. The estimate for the start of operations is the end of 2016 to the start of 2017.
As the mine moves through its various stages of development, numbers of employees at the mine will fluctuate.
“So what you will see is a lot of drilling now and probably about 100 people working on the site.
“This will taper off somewhat when we start our key environmental studies … as we get into construction you’ll probably have 600-800 people building the mine and in addition to those 600-800 there will be about 350 permeant employees,” said Gallagher.
Rick Killam, Director, Environment & Social Responsibility for New Gold says they plan to hire locally and to utilize local services where available.
Operations under Richfield Ventures for Blackwater were largely ran out of Quesnel, but New Gold says Vanderhoof will be the key player for the mine.
“I think a lot of you are aware that Richfield’s owner was based out of Quesnel … we are gradually weaning off that.
“We feel very strongly that Vanderhoof is the gateway to our project,” said Gallagher.
He added that an office will be set up in town for the purpose of purchasing and community relations among other things.
As well as completing the drilling process, representatives of New Gold say a key priority at this point will be engaging the local communities and First Nations which will set them up to get through the permitting process. They are also in the process of hiring a First Nations Liaison.
“Stakeholder outreach begins with this meeting and you can expect to see us around lots in the coming months and years,” said Killam.
“We plan to build a relationship with you … we are accessible people, we’re people persons and we look forward to getting to know you and what your concerns are about this project,” he said.
New Gold will provide regular updates on the progress being made at Blackwater and hopes to release an updated resource estimate in early 2012.