Selwyn Resources is gearing-up for advanced exploration work at its property along the Northwest Territories border.
Heavy equipment is now rumbling up Robert Campbell Highway, along the Nahanni Range Road that services the Cantung mine, and over a winter road that connects to Selwyn’s property at Howard’s Pass.
It’s believed to be one of the world’s largest unexploited zinc, lead and silver deposits on the planet.
If Selwyn has its way, a big underground mine will open there by mid-2014.
The mine would employ between 350 to 400 people and churn out 8,000 tonnes of concentrate per day.
Advanced exploration work, to start this summer and continue into next year, will be key to any of this happening. Underground drills, front-end loaders and trucks are being hauled into place to allow the company to test its mining methods and further prove-up its resources by digging two kilometres of new tunnel.
This work is expected to cost $65 million, said Justin Himmelright, vice-president of environment and community affairs. To date, Selwyn has spent approximately $70 million on exploring the property since 2005.
The company’s also applied to expand its camp to hold 160 people, up from 100 people. From now on, Selwyn’s work will be a year-round operation.
One of the company’s big challenges will be to find Yukoners willing and able to work at the mine, given the territory’s skilled-labour shortage, said Himmelright.
More than half of the workers who have been on site are Yukoners, and more than one quarter are of First Nation descent, said Himmelright. Selwyn is working with the Yukon Mine Training Association to train-up more.
This training can take up to two years, so “we should be doing that stuff now,” said Himmelright.
Other than requiring underground miners, the site will require cooks, cleaners, metalworkers, carpenters, electricians, heavy equipment operators, mechanics, environmental monitors, geologists, surveyors, pilots and more.
Workers typically spend three weeks in, two weeks out. Selwyn makes regular flights to Watson Lake, Ross River and Whitehorse for its crews.
The mine would initially be powered by diesel generators. “Were there grid power available in the Yukon, we’d definitely be looking at that,” said Himmelright. But, with the territory’s looming electricity shortage, that’s not in the cards.
Eventually, the company would like to see the mine powered by a 20-megawatt run-of-the-river hydro-electric facility, with diesel generators used to pick up any slack. But it remains unclear how long it would take to get that proposal past regulators.
Selwyn would prefer to send metal concentrate to the Robert Campbell Highway as a slurry pumped through a 180-kilometre pipeline, rather than hauling it by road, although both options are still being weighed.
A seven-inch pipeline, dug underground, is expected to cost as much as a road. It would reduce the company’s exposure to the whims of world oil prices.
And, unlike the back-up plan of building a road, it would not further open-up Yukon’s hinterland, with ATV tracks and additional hunting pressure on wildlife that this entails, said Himmelright.
No concentrate pipeline has been built in the Yukon, but the technology has been used “all around the world,” including in northwest Alaska, where the Red Dog mine pumps zinc and lead concentrate through an 80-kilometre pipeline, he said.
The company expects to submit its mine plans to the Yukon Environmental and Socio-economic Assessment Board by this summer. It remains to be seen whether the company’s passage through Yukon’s regulatory regime will become tripped up by the Liard First Nation, which has expressed concerns that Selwyn’s project would pollute the surrounding watershed.
The First Nation is trying to have an earlier assessment of the project thrown out through the courts.
Selwyn hopes to have its feasibility study complete soon, to demonstrate that the mine project would be profitable.
Borrowing money shouldn’t be a problem. Selwyn is partnered with Chihong Zinc and Germanium, which operates several lead-zinc mines in China’s southwestern Yunnan province.
That company and Chinese banks all ultimately report to the same boss: the Chinese state, which has an insatiable hunger for commodity metals that’s led it to gobble up foreign properties.
Selwyn Resources remains a publicly traded Canadian company, but it has sold half its stake in its property to Chinese partners. That makes this deal distinct from the wholesale Chinese takeover of Yukon Zinc Corporation, which operates the Yukon’s Wolverine mine.
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