Constantine drilling again at Palmer, water permit in limbo

  • Constantine Metal Resources Vice President of External Affairs Liz Cornejo and Alaska Gov. Mike Dunleavy check out core samples at the company’s Palmer prospect site in Southeast Alaska near Haines. The Vancouver-based company is continuing a major drilling program to define the prospect’s resource base. (Photo/Courtesy/Office of the Governor)

Constantine Metal Resources plans to put nearly $9 million into further drilling work at its underground Palmer mine prospect near Haines this summer after the pandemic curtailed work last year.

The $8.8 million summer work budget is largely for drilling to further delineate the Palmer project resource base as well as collect geotechnical data for the large underground exploration tunnel the company hopes to dig in the coming years.

In total, the leaders of Vancouver-based Constantine hope to conduct roughly 6,000 meters of drilling; the work is being funded by large Japanese mining company Dowa Metals and Mining Ltd. Constantine, which has led exploration at the polymetallic Palmer prospect for years and is continuing as the project operator, will see its ownership share drop to no less than 44 percent, according to a March 30 statement.

Constantine CEO Garfield Mac Veigh said in an interview that the company advanced its understanding of the environmental factors at play during the $2.2 million surface work program conducted at Palmer last summer.

This year the company hopes to find the “offset” to the prospect’s South Wall deposit with some of its drilling, according to Mac Veigh.

An offset is generally a similar geologic formation — in this case likely metal-bearing — that has been displaced and shifted by a fault.

“That could have a substantial impact on the economics of the project because that offset should be pretty accessible from our underground exploration,” Mac Veigh said.

If developed as currently envisioned, the Palmer project would be an underground mine that would process up to 3,500 metric tonnes of ore per day, or approximately 12.5 million metric tonnes over the life of the mine, based on figures from a 2019 preliminary economic assessment.

From that, the mine would produce more than 1 billion pounds of zinc, 196 million pounds of copper, 18 million ounces of silver, 91,000 ounces of gold and nearly 2.9 million tonnes of barite, a common industrial mineral, according to Constantine.

The deposit is adjacent to the Alaska-Canada border and near the Haines Highway about 40 miles northwest of Haines along the Klehani River, which flows into the Chilkat River. It is on a mix of federal mining claims surrounded by land owned by the Alaska Mental Health Trust Authority, which is open for development.

The mine would cost $278 million to develop and require another $140 million for sustaining capital and reclamation costs for an estimated all-in cost of $418 million, according to the 2019 report.

About 1,700 meters of the drilling this summer is dedicated to advancing the company’s knowledge of the geotechnical structures and hydrologic systems in the area of the proposed exploration tunnel, according to Mac Veigh.

Constantine was moving towards the major exploratory endeavor to blast a roughly 1.25-mile tunnel that would serve as a space to conduct exploration drilling and collect further geotechnical and hydrologic data in 2019 before a Supreme Court case originating from Maui pushed Department of Environmental Conservation officials to remand and review the wastewater discharge permit for the work and the company to reevaluate its wastewater plan.

In the Maui case, the Hawai’i Wildlife Fund and attorneys for the national environmental law firm Earthjustice contend the County of Maui for decades has been polluting near shore ocean waters by injecting millions of gallons of treated sewage water into the groundwater.

The groups brought a lawsuit against the County of Maui and in 2014 a federal District Court of Hawaii judge found the wastewater injection well operation violates the Clean Water Act because the wastewater seeping up through the ocean floor can be traced back to the injection wells.

The county’s appeal to the Ninth Circuit Court of Appeals was rejected as well. A 6-3 Supreme Court ruling hedged the issue somewhat, contending Maui needed a Clean Water Act National Pollutant Discharge Elimination System permit from the Environmental Protection Agency but also narrowing the scope of when such a permit is required from what the environmental groups were seeking.

In Alaska, where the state has taken primacy over wastewater management from the EPA, such permits are handled by DEC.

DEC spokeswoman Laura Achee wrote via email that Constantine’s wastewater permit remains valid but the company “is revising their wastewater disposal system engineering plans, and will submit their plans to DEC for review and approval.”

There is no timetable for how long that will take.

Gershon Cohen, project director for Alaska Clean Water Advocacy, originally petitioned DEC officials to reconsider their 2019 approval of Constantine’s wastewater discharge permit, contending it was wholly inadequate for the amount of groundwater contaminated with hydrocarbons, blasting solids and explosive residue prior studies indicate could be released by the blasting for the exploration tunnel.

Constantine’s original plan called for diverting the water into two settling ponds to handle 500 gallons per minute and hold up to 358,500 gallons each for 12 hours to allow solid materials to settle out of the water before it is sent back underground. According to Cohen, that would be enough capacity to handle just two days worth of water flow from the tunnel area and doesn’t account for how the system would operate in winter conditions.

“This is going to be a truck traffic-sized opening under a glacier for a mile to reach a deposit,” Cohen said, noting nearby Glacier Creek is a major coho salmon rearing stream and insisting the wastewater would reach the Chilkat, treated or not.

“Once it starts leaking it’s never going to stop. If they start digging that tunnel they will be setting in motion something that can’t be reversed.”

Constantine has dye water tracing tests ongoing in the area and will likely conduct seismic surveys of the Glacier Creek area to better understand the bedrock and soil makeup and how that could impact water flow as well as establishing infrastructure in the mountainous area, according to Mac Veigh.

He said it’s too early to tell how much the new water treatment design will differ from the original plan, but added it probably won’t be finished until late this year after the company has been able to digest all of the data it gathers this year, at the earliest.

Constantine is also looking at technologies that would allow it to clean the wastewater before it leaves the tunnel, according to Mac Veigh.

Elwood Brehmer can be reached at [email protected].

04/07/2021 - 9:16am