Water worries slow magnetite miner

A plan to process waste rock from the old Whitehorse Copper mine is facing setbacks as regulators look for assurances the project won’t contaminate nearby residential wells.

Correction: Eagle Industrial Minerals Corp.‘s plans to process waste rock from the old Whitehorse Copper mine doesn’t involve crushing ore, as originally stated. There’s no need: the old ore is already crushed, and president Chuck Eaton says that reduces the project’s environmental risk.

A plan to process waste rock from the old Whitehorse Copper mine is facing setbacks as regulators look for assurances the project won’t contaminate nearby residential wells.

Eagle Industrial Minerals Corp. has promised the project will leave the abandoned mine site cleaner than it is at present.

But the company’s hydrological models have holes in them, according to a consultant’s report prepared for the Yukon’s Department of Environment.

And “without an appropriate model, the results and any conclusions derived thence are considered unsound and unreliable,” the department warned in a submission to the Yukon Environmental and Socio-economic Assessment Board.

Company president Chuck Eaton insists the company’s plan is solid. But he’s preparing more detailed models to put these fears to rest.

“It’s kind of their consultant versus our consultant, which is never good. Nonetheless, we’re trying to work out our way through that,” he said in an interview.

Eaton plans to pluck iron-rich magnetite from the old mine tailings at the site, eight kilometres south of downtown Whitehorse. He’d take the waste rock and mix it with water to create a slurry.

The mixture would then be dumped into giant drums lined with magnets. When spun, these drums ought to pick magnetite out from the mix.

Eaton hopes to yield 1.5 million tonnes of iron-rich ore from some 10 million tonnes of tailings. The metal would then be trucked to Skagway and shipped to Asia.

The operation is expected to run just six or seven years. During that time, it would create between 20 to 25 “good, well-paying jobs” for heavy equipment operators, said Eaton. A dozen truck drivers would also be needed to make 30 daily trips to Skagway.

Compared to other methods of extracting metal from rock, Eaton touts his project as being benign.

No arsenic, sulphuric acid or other nasty chemicals would be used. Nor would any drilling or blasting be involved.

And the rock isn’t believed to generate acid like the tailings at the old Faro mine. Nor does it leach metals, he said.

But he’s yet to convince regulators on the last point.

In 1991, a water quality survey of wells downhill from the mine found contamination that “showed the influence of historic mining,” according to a report prepared for Eaton’s company in February, 2011, notes the Health Department.

In the view of health officials, Eaton’s plan to circulate water through newly-disturbed tailings “has the potential to affect groundwater significantly.” Residential water wells are within two kilometres of the project.

The Department of Environment also has concerns. There may be few traces of contaminants in surface water now but it’s been 29 years since the mine was shuttered, it noted.

And the company hasn’t tested water in the underground mine workings. As contaminants often sink, environment officials suspect deeper water may be dirtier than is now known.

Following these concerns, the assessment board ordered Eaton to provide more information. He’s since met with officials from the board and territory to clarify what’s needed in his next submission.

Eaton plans to draw water from the mine pit and underground workings of the old copper mine, which operated from 1967 until 1982.

This water supply would be cleaned up before the operation started and treated during production to ensure it met drinking water standards, according to Eaton’s proposal. Used tailings would be stored in a pit.

He asserts there’s no reason to fear contamination because there’s little evidence of it having occurred at the site since the mine shuttered.

Water in the mine pit currently has amounts of uranium and molybdenum that exceed drinking water standards. But these metals are also found uphill from the site “so they appear to be part of natural background conditions and are not caused by contact with the old pit or the tailings,” according to Eaton’s submission.

Eaton’s company would also tidy up the abandoned mine site, using processed tailings to patch deep fissures in the earth created by collapsed mine workings. And they’d also cap areas where tailings dust blows freely.

The project is expected to cost $5 million to build. It’s being privately financed by Eaton, a California-based investment banker. His company also has magnetite plays in Alaska and on Vancouver Island.

Eaton had hoped to begin selling ore by this spring. Those plans have been delayed by one year, but he remains hopeful the operation will prove successful.

“I think the government agencies understand they’ve really delayed things here and that’s a problem for me. I think they’re trying to make this thing work.”

But time is of the essence. Within three years, the price of iron is expected to slump as more big mines open and as emerging economies like China and India start slowing.

Eaton wants to open before then “so everything is paid off and we can still operate through a lower-margin period.

“If it keeps getting delayed, then the economic viability of the project gets called into question.”

Contact John Thompson at johnt@yukon-news.com