IDM Mining says Red Mountain project in Golden Triangle on track

Mike McPhie, executive chairman of IDM Mining. — Photo: IDM Mining

IDM Mining recently reported an update on its work on a Feasibility Study (FS) at Red Mountain.

i. Metallurgy

During the 2016 field season, infill and metallurgical drill holes were distributed throughout the three primary resource zones—Marc, AV and JW—at Red Mountain. The current proposed flow-sheet suggests a flotation and leach gold recovery process that will produce gold-silver doré bars.

ii. Resources

Underground drilling in 2016 included infill drilling that targeted the AV and JW zones, with the objective of potentially upgrading Inferred Resources to Measured and Indicated. In addition, 25-metre spaced step-out underground and surface drill holes were completed at all of the major zones. Geology and resource modelling is underway, with an updated resource estimate planned for January 2017.

iii. Tailings Management and Design

Design work for the tailings management facility (TMF) is underway. A site investigation program of drilling, mapping and lab testing was undertaken at the proposed tailings site in 2016. IDM has been working with regulators and the Nisga’a First Nation on the TMF design and assessment of alternatives.

iv. Underground Geotechnical and Hydrogeology

IDM says ground conditions at Red Mountain are excellent, and that minimal work was needed during the 2016 underground rehabilitation work. Significant but manageable meltwater inflows were encountered in the underground workings. The FS will include a water management plan.

v. Potential Project Improvements

The Red Mountain FS will build on the July 2016 NI 43-101 Preliminary Economic Assessment (PEA). The PEA identified many potential opportunities for the project, including reduction of capital costs through the purchase of used mining and processing equipment; expanding the resource base and the life of the mine; and sharing capital costs where possible.

The PEA outlines the anticipated capital and operating costs, economic potential and near-term production profile of the Red Mountain project. Some PEA highlights:

• Base-case economics assume a gold price of US$1,250/ounce and silver price of US$15/ounce and an exchange rate of C$1.00 = US$0.80.
• The pre-tax base-case economics indicate a Net Present Value (NPV) of $133.1 million at a five per cent discount rate with an Internal Rate of Return (IRR) of 42.4 percent and a 1.9-year payback of initial capital.
• The after-tax base case economics indicate an NPV of $86.6 million at a five per cent discount rate with an IRR of 32.3 percent and a two-year payback of initial capital.

IDM says Red Mountain has excellent exploration upside, with many mineralized zones and showings across the property. Also according to the company, glacial ice has retreated from the property, including areas adjacent to known high-grade showings, since the last significant surface work was performed on it in 1996.

There has been over 1,000 metres of glacial retreat around the southern portion of the property. IDM says there is significant potential in these unexplored areas.

“We’re feeling very positive,” said McPhie. “We have received lots of support from Stewart and the First Nations in the area. It’s given the company and our investors a lot of confidence.” McPhie said that if IDM decides to build a mine at Red Mountain, it will have a big economic impact on the region.

“It will be a significant project at both the construction and the operations stages,” he said. “The mine will employ several hundred people. Stewart will be the biggest beneficiary, as well as Terrace and Smithers.”

IDM Mining Ltd., a Vancouver-based mineral exploration company, is developing the Red Mountain gold and silver project.

Red Mountain lies in the Golden Triangle of northwestern British Columbia, which hosts many large and high-grade past-producing mines and deposits, including the Premier, Eskay Creek and Snip operations.

In the same belt of rocks as Red Mountain, Seabridge Gold’s KSM Project and Pretivm Resources Inc.’s Valley of the Kings Deposit host large precious metal deposits.

IDM Mining Ltd., a Vancouver-based mineral exploration company, is developing the Red Mountain gold and silver project.

Red Mountain lies in the Golden Triangle of northwestern British Columbia, which hosts many large and high-grade past-producing mines and deposits, including the Premier, Eskay Creek and Snip operations.

In the same belt of rocks as Red Mountain, Seabridge Gold’s KSM Project and Pretivm Resources Inc.’s Valley of the Kings Deposit host large precious metal deposits.