BRITISH COLUMBIA On April 2, Vancouver-based NEW GOLD INC. announced the results of a feasibility study conducted on its 100%-owned New Afton copper-gold project, 10 km west of Kamloops in south-central British Columbia. (See CMJ February 2005 for background.)
The feasibility study has confirmed that the New Afton project is economically and technically feasible as an underground block cave mine, with access by ramp from surface. It could produce ore at a rate of up to 4 million tonnes (t) per year (11,000 t/d), making it one of Canadas largest underground metal mines, based on tonnage of ore.
Reserves from the Main zone (based on copper at US$1.45/lb, gold at US$475/oz and silver at US$8.00/oz) are 44.4 million t grading 0.98% Cu, 0.72 g/t Au and 2.27 g/t Ag. This contains 960 million lb of copper, 1.03 million oz of gold and 3.24 million oz of silver. The estimate used a cut-off value of Cdn$15/tonne.
Measured and indicated resources in the Main zone and Hanging wall lenses (based on $15/t cutoff and US$1.20/lb Cu, US$450/oz Au and US$5.25/oz Ag) are 58.6 million t grading 1.1% Cu, 0.83 g/t Au and 2.73 g/t Ag. This contains 1.4 billion lb of copper and 1.6 million oz of gold. Using the same price and cutoff parameters, the C zone contains an inferred resource of 6.6 million t grading 1.1% Cu, 0.97 g/t Au and 1.75 g/t Ag.
According to the feasibility study, New Afton could be one of Canadas lowest cost gold producers, with cash costs of minus US$852/oz (net of copper and silver credits). The cost to produce copper is predicted as US$0.58/lb (net of gold and silver credits).
The study was carried out by a team co-ordinated by John Shillabeer of HATCH LTD., which also completed the processing and surface infrastructure engineering components of the study.
The initial capital expenditures are estimated at US$268 million, with additional life of mine expenditures of US$215 million. The initial mine life will be 12 years. Annual gold production will average 82,000 oz, while copper production will average 78 million lb/year. The initial construction period will be approximately two years in order to reach commercial production in the second half of 2009.
To expedite development, the underground mining contractor CEMENTATION CANADA is currently mobilizing to site, and is scheduled to commence underground work at the beginning of April. As well, the company has begun the process of ordering the 11,000 t/d SAG mill.
The formal Mines Permit application was submitted earlier this year for the approval of both the mine plan and reclamation program. Presentations have been made to the local First Nations, and to the public. New Gold is now focused on securing the financing required to develop the project.
A technical report summarizing the feasibility study will be filed at www.sedar.com as soon as possible. Meanwhile you can find more information at www.newgoldinc.com.