Chieftain Metals Inc. is on schedule to build a mine at the Tulsequah Chief site near Atlin, B.C., despite continued financial problems and First Nations opposition, company president Victor Wyprysky insisted this week.
Representatives from the Toronto-based company were in Atlin this week for an open-house meeting to update the community on the project’s progress.
It would cost $400 million to bring the historic mine to production, according to a feasibility study released earlier this year. Chieftain acquired the mine after the previou owner, Redfern, went bankrupt. It plans to process 2,000 tonnes of zinc, copper, lead, silver and gold a day. The company plans to start production at the end of 2015 or beginning of 2016 after a two-year building period. The mine should operate for about nine years, and employ over 200 people.
A lot has changed since that study was released. The company purchased over 16,000 hectares in March, bringing the mine’s total size to over 30,500 hectares.
But Chieftain still needs money. Last September, it signed a memorandum of understanding with China Development Bank, China CAMC Engineering Co. Ltd. and its affiliate Procon Holdings (Alberta) Inc. for full project financing. The agreement has fallen through, Wyprysky said in a phone message this week.
The company wanted too much ownership, so Chieftain is working to secure financing from banks and strategic partners, he said. “We’re moving ahead on all fronts,” Wyprysky said in the message.
When reached at his Toronto office, he declined to give clear timelines. It all depends on financing, said Wyprysky.
The feasibility study envisioned the company receiving interim financing by March 15, and full financing by June 30. The latest presentation on the company’s website, dated May 22, assumes full financing by January 2014.
Chieftain is a public company, so information about where its financing is at is confidential, said Wyprysky.
“There’s a world called the global financial world that we are a part of, rules and everything. You don’t just ring up a company and say ‘When are you closing your $400 million financing?’” he said.
But he’s confident production will begin when planned.
“We’re trying to stick to that timeframe. In setting up these schedules, one typically leaves a lot of room for this whole financing process to take place, and we’ve given ourselves, at this point, an adequate cushion,” he said.
He couldn’t say when the company will reopen its shuttered interim water treatment plant. It closed nearly a year ago after around six months of operations, after costs ran four times higher than originally anticipated.
“The water treatment plant is just a very small part of the project,” he said, noting the company spent over $9 million on the plant.
But the closure raised the ire of conservationists and the Taku River Tlingit First Nation. The mine is in the First Nation’s traditional territory. In November, it issued a joint clan mandate opposing the project as currently proposed and directing leadership to “take all necessary steps to ensure that the Tulsequah Chief project, as currently proposed, is not developed in Taku River Tlingit Territory.”
The First Nation also had concerns about the proposed 128-kilometre access road to the site. The road could disrupt caribou populations and harm the First Nation’s culturally significant Nakina Trail. Chieftain received all the permits it needed to build the road earlier this year. The timeline released with the feasibility study said road construction could begin this year. The latest presentation says it could begin next year.
Neither company press releases nor the feasibility study have addressed the First Nation’s opposition. In a video posted to the company’s website last month, Wyprysky says the company has had “extensive” negotiations with the Taku River Tlingit First Nation.
That’s not true, said Chantelle Hart, a member of the Children of the Taku, a not-for-profit group dedicated to preserving the First Nation’s traditional way of life in that territory.
“They’re painting this pretty picture of harmony and peace between us and them, and that’s not what is occurring,” she said earlier this month.
“We have tried to contact them and have never received a response, ever. They’ve been very clear about bulldozing through our wishes and our needs, and completely disregarding our concerns,” Hart said at the time. When reached this week, she said she was not aware of the company’s meeting in Atlin.
The First Nation did not respond to requests for an interview before press time.
“I don’t really know why they’re opposing the project, and I don’t even know if they are opposing the project because they certainly have lots of interest in getting jobs with the project,” Wyprysky said this week. “So I don’t see how you can oppose it and want jobs at the same time.” But he knows about the mandate.
“I’m aware of it,” he said.
“But they don’t have a veto. We have the permits ready to build. That’s what you should focus on. Do you appreciate that? We have a fully permitted project. We’re ready to go.”
But moving forward with First Nations opposition could put the company at risk of lawsuits and blockades, said Ramsey Hart with Mining Watch Canada.
“It certainly is not what is expected of responsible mining companies in this day and age,” said Hart.
First Nations have constitutionally protected rights, and international case law recognizes the duty to consult with aboriginal groups, he said.
“It’s not just about asking and then going ahead and doing what you wanted to do anyways. You actually have to have the agreement of the First Nation before proceeding,” he said.
Contact Meagan Gillmore at