Mexico’s proposed higher mining royalties could block nearly $7bn in investments
The Mexican government proposed raising mining royalties under the argument that metal prices have risen in recent years.
Based on early results of this year’s drilling, Seabridge Gold (TSX: SEA; NYSE: SA) plans to reshape its KSM gold-copper project by integrating the Snowfield porphyry deposit, acquired from Pretium Resources (TSX: PVG) in December 2020.
“We are increasingly confident that integration of Snowfield into a new KSM mine plan will increase proven and probable gold reserves, increase grades in the early years of production and defer the need to pay for expensive underground block-cave development,” Seabridge chairman and CEO Rudi Fronk explained. He added the integration of Snowfield and Mitchell should be seamless.
Confirmation of the change is expected in the second quarter next year when the new KSM prefeasibility study is released. The company released an updated preliminary economic assessment (PEA) for KSM in April 2020.
Drilling at Snowfield has confirmed the geological model and block grades, as well as closely matching previously reported grades. The recent drill program totalled 9,450 metres, most of which was drilled to trace the margins of the Snowfield deposit and the route of the planned Mitchell Treaty tunnels (MTT) between the mine and mill.
To confirm model grade and obtain metallurgical samples, Seabridge drilled 3,484 metres at Snowfield and Mitchell targets. The results indicate that with the inclusion of the Snowfield zone, open pit mining can be extended longer than by mining only the Mitchell deposit.
The KSM and Snowfield properties are about 65 km northwest of Stewart, BC.
The KSM project has measured and indicated resources totaling 3 billion tonnes at a grade of 0.52 g/t gold (50.4 million oz. gold), 0.21% copper (14.2 billion lb. copper), 2.8 g/t silver (269.7 million oz. silver), and 48 ppm molybdenum (324 million lb. moly). The inferred resource is 4.6 billion tonnes grading 0.37 g/t gold, 0.32% copper, 2.2 g/t silver, and 29 ppm molybdenum.
The most recent resource estimate for Snowfield was released in December 2009. It contained 861.7 million measured and indicated tonnes grading 0.71 g/t gold (20 million oz. gold), 1.8 g/t silver (50.9 million oz. silver), 0.12% copper and 92 ppm molybdenum. The inferred resource was 948.7 million tonnes at 0.33 g/t gold (10 million oz. gold), 1.4 g/t silver (43.7 million oz. silver), 0.07% copper, and 81 ppm molybdenum.
The first Snowfield drill hole for which Seabridge has received assays returned 430.9 metres grading 1.08 g/t gold, 0.19% copper and 2.2 g/t silver, including 85.5 metres of 1.27 g/t gold, 0.22% copper and 2.3 g/t silver.
(This article first appeared in the Canadian Mining Journal)
