NovaCopper makes major discovery at Bornite prospect


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An overhead view of the mining camp at the Bornite prospect in the Ambler mining district of Northwest Alaska. On Oct. 30, NovaCopper announced a major copper discovery this summer at the prospect, estimating the resource at some 9 billion pounds.

Courtesy NovaCopper

Minerals companies exploring the western Brooks Range say they have identified as much as 9 billion pounds of copper in high-grade ores and additional resources of zinc.

The Arctic and Bornite copper deposits have been explored for decades but a new discovery at Bornite by Vancouver,B.C.-based NovaCopper Resources this summer may push the known higher-grade copper resource to up to a critical mass where development may be possible.

“It’s not hard to see how a 10 billion pound copper resource could be identified in this district soon,” said Rick Van Nieuwenhuyse, CEO of NovaCopper Resources, the company most active in the region. There are also 9 billion pounds of zinc and 2.3 billion pounds of lead resources identified.

Van Nieuwenhuyse briefed the Alaska Industrial Development and Export Authority’s board Oct. 30 on the exploration. AIDEA could play a role in developing a road to the mine area, much like the state development corporation did in the 1980s to aid development of the Red Dog zinc and lead mine north of Kotzebue.

Copper was discovered at Bornite in 1957 and exploration by Kennecott Resources, which acquired rights to the property, continued for several years. Kennecott defined a large resource and but one that was still economic. In 1964 Kennecott built an exploration shaft down to 1,075 feet but never explored below that level, Nieuwenhuyse said.

The mineshaft flooded, which caused Kennecott to turn its focus to exploring other areas nearby, resulting eventually in the Arctic discovery.

Last year NovaCopper, working in a joint venture with NANA Regional Corp. of Kotzebue, which owns Bornite, decided to explore deeper. In 2012 the companies announced discovery of a new, larger and richer ore deposit at about 1,500 feet.

Where the shallower deposit found by Kennecott had ore values with about one percent copper the deeper deposit has richer ore with drill test results that ranging from 2 to over 5 percent, Nieu told AIDEA’s board.

NovaCopper and NANA are also exploring the Arctic deposit about 25 miles northeast of Bornite, which was discovered and also explored by Kennecott, and acquired by NovaGold Resources (now NovaCopper). In 2011 NovaCopper and NANA formed their joint-venture and merged the minerals lands owned by both.

The region, known as the Ambler Mining District, has several other promising deposits. One is the Sun deposit, east of Arctic and Bornite, that is being explored by Andover Resources. Ted Leonard, AIDEA’s executive director, told the authority board that he expects Andover to soon announce positive results of its new exploration at Sun.

Another deposit in the area is Smucker, to the west, which is owned by Teck Resources, which also owns and operates the Red Dog Mine.

Van Nieuwenhuyse said the Arctic deposit looks attractive on its own. A preliminary economic assessment has outlined the potential for a 4,000-ton-per-day mine that could be built with a $262 million initial capital investment. Another mine developed nearby at Bornite would allow for the sharing of critical infrastructure, particularly an access road from the Dalton Highway 200 miles to the east.

Over several decades several mining companies including Kennecott and firms that no longer exist as companies, like Anaconda, Noranda and Cominco, spent about $150 million in exploration in the region. NovaCopper itself, however, accounts for about half of this, or $75 million, including the amount paid to Kennecott to acquire the Arctic deposit and other properties, Van Nieuwenhuyse said.

NovaCopper spent $15 million in its 2012 exploration, Van Nieuwenhuyse said.

A road is key to development, however.

“Without a road there will be no mine,” Van Nieuwenhuyse told the authority’s board.

NovaCopper and NANA need about three years of further exploration to define an initial project. Another one to two years would be needed to complete a feasibility study and prepare the project for permitting, Van Nieuwenhuyse said.

Permitting the project, which would include a federal environmental impact statement, and construction, depending on the mine developed, would require about two years.

There is also the 200-mile access road built from the Dalton Highway that would likely total $300 million to $500 million.

Van Nieuwenhuyse said the mines developed in the area would ultimately pay for the road similar to the way the Red Dog Mine road was paid for, although it was built by AIDEA, the state authority.

 

Tim Bradner can be reached at tim.bradner@alaskajournal.com.

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