The independent panel investigating the Mount Polley tailings embankment failure released its report January 2015. — Photo courtesy Imperial Metals O
The independent panel investigating the Mount Polley tailings embankment failure released its report January 2015. — Photo courtesy Imperial Metals
Operations, Earnings and Cash Flow: The 2014 annual base and precious metals production from Mount Polley, Huckleberry and Sterling mines was 41.5 million pounds copper, 33.0 thousand ounces gold and 166.4 thousand ounces silver.
Production in 2014 was impacted by the interruption of Huckleberry operations due to the SAG mill bull gear failure and the suspension of operations at Mount Polley due to the tailings dam breach.
The base and precious metals production allocable to Imperial in 2015 from the Huckleberry mine is estimated to be 22.0 million pounds of copper. An estimate of Red Chris production will be made following the completion of commissioning. Mount Polley production will be estimated once restart of operations has been determined.
Derivative instruments for 2015 will protect the pricing on 79,800 ounces of gold in 2015 and about 33% of the foreign exchange movement on the Company's US$325.0 million Notes. In addition Mount Polley has hedged 36,000 ounces of gold for 2015 which can be allocated to the production expected from the Red Chris mine. However, the quarterly revenues will fluctuate depending on copper and gold prices, the CDN/US Dollar exchange rate, and the timing of concentrate sales which is dependent on concentrate production and the availability and scheduling of transportation.
Exploration: Exploration in 2015 will be limited in scope.
Development: At Mount Polley work on the repair of the tailings dam embankment to provide sufficient storage so the anticipated spring runoff from the mine site can be pumped to the Springer pit is nearing completion. As part of the rehabilitation of lower Hazeltine Creek two sediment ponds were commissioned in the fourth quarter resulting in a significant reduction in the turbidity of the water entering Quesnel Lake. Rehabilitation and restoration work is now focusing on the upper reaches of Hazeltine Creek, and its outlet from Polley Lake.
On January 30, 2015 the independent panel investigating the Mount Polley tailings embankment failure released its report. The report concluded that the failure was sudden and without warning. It also concluded the failure was due to the fact that the independent engineer's design did not take into account the strength of the glacio-lacustrine layer approximately eight metres below the foundation of the embankment.
The Company maintains its resolve to mitigate the effects of the breach, and is working together with regulators, the local community, the Xat'sull First Nation and the Williams Lake Indian Band to achieve that goal.
Mount Polley staff are working with both the Province and local First Nation communities to develop a plan to reopen the mine. Alternatives for a modified restart of mine operations have been studied and consulted on with First Nations and the Province. In the restart plan, mining would begin in the Cariboo pit with tailings deposited into the Springer pit. Production in 2015 is dependent upon receiving regulatory permission to restart operations.
Huckleberry's SAG mill was repaired in December 2014 and has since been working well. Huckleberry management is reviewing mining and milling plans, with a view to reducing costs and optimizing production in response to the recent drop in copper prices. The weaker CDN Dollar is helping to offset the impact of lower copper prices.
At the Sterling mine the focus will be to obtain the required permits for development of a new open pit mine and an expanded leach pad in the vicinity of the historic Sterling mine.
The Red Chris mine is operating and has shipped its first concentrate to the Port of Stewart. The plant commissioning is ongoing, and operating crews are focusing on achieving continuous operations and producing acceptable concentrate grades. As progress is made in these areas, emphasis will move to achieving design metal recoveries and throughput. Red Chris and the Tahltan community leaders are in the final stages of completing an impact and benefit agreement.
