Selwyn Chihong Mining Ltd. plans to spend $56 million in 2014 towards developing the Selwyn lead-zinc project in the Howard’s Pass region in eastern Yukon.
The company bought the project from Selwyn Resources Ltd. in June.
Because the new owners are such a big company, they can take a long-term view and invest despite the current downturn in the mining industry, said Maurice Albert, Selwyn Chihong’s vice-president of external affairs.
The previous owners, all junior mining companies, were “entirely dependent on the whims of markets to be able to raise money for the project,” said Albert.
For example, the company plans to spend $12-13 million to upgrade the Howard’s Pass access road, constructed in the 1970s, which has since fallen into disrepair.
The plan is to build five bridges this winter, and to repair the road itself in the summer and fall.
That route has been used on occasion as a winter road to bring in heavy equipment, but other than that all of the access has been by air, said Albert.
It’s hard for smaller companies to drum up the capital required for that sort of work, he said.
“That’s a lot of money for a junior mining company that’s going to go to the open market and say, ‘Hey, we want to build a road to the project, would you lend us $13 million?’”
But with deeper pockets, Selwyn Chihong can make the investments now that will make the project more attractive down the road.
Chihong has over 60 years of experience in exploration, mining and smelting.
The billion-dollar company’s major shareholder is China Yunnan Metallurgical Group, which is itself majority owned by the Yunnan provincial government.
The company has set its sights on a much bigger project than had previously been envisioned.
There are 15 identified deposits on the site, but the company only has good geological information for about two of them, said Albert.
So a drilling program has been planned for this summer to prove up some of those reserves, showing to investors that a bigger mine is warranted.
“The resources are quite considerable, on the site. So we know that it’s just a matter of drilling to locate the resources on the site. It’s one of the richest undeveloped deposits in the world.”
The exploration will use four to six drills beginning in March, with work continuing through the summer.
Up to 70 people will be hired for that work, to be housed at the existing camps on the property.
The company has all of its permits in place for both the road upgrades and the exploration program, said Albert.
The company will also start work on a bankable feasibility study for the mine.
That won’t be ready until 2015, said Albert.
The goal for 2014 is to identify the best options for power for the operations, a port to get the ore to market, and transportation get the ore to port, he said.
Selwyn Chihong is also working hard to implement agreements it has signed with the First Nations in the area.
The project lies on the traditional territory of the Kaska, as well as the Sahtu and the Dehcho in the Northwest Territories.
Contact Jacqueline Ronson at
jronson@yukon-news.com
