Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Canarc Resources (TSX: CCM) has wrapped up a preliminary economic assessment of its New Polaris gold project in northwestern British Columbia that indicates the project could produce 80,000 ounces of gold per year over an 8.7 year mine life. By market close the Vancouver-based junior’s stock had jumped 20%.
The study assigns New Polaris a $216 million after-tax net present value at a 5% discount rate and a 38% after-tax internal rate of return. It would cost $111 million to build and process 750 tonnes per day at a 90.5% recovery rate to achieve after-tax payback in 2.7 years.
The study eliminates the need to ship concentrate along the Taku River to a third party treatment facility, which the company had contemplated in past studies on the project. It would instead use bio-oxidation followed by a leaching process to produce doré bars at site.
Canarc initially explored the project’s C vein system between 1988 and 1997, infill drilling it between 2003 and 2006. The current resource consists of over 170 holes.
The project contains 1.68 million indicated tonnes grading 10.8 grams gold per tonne for 586,000 oz. gold. The project also contains 1.48 million inferred tonnes at 10.2 grams gold for 485,000 oz. gold.
The company is considering a feasibility work program at New Polaris that would include 24,000 metres of infill drilling and cost about C$10 million.
(This article first appeared in The Northern Miner)
