PRETIUM Resources has received final provincial and federal approval for its Brucejack Gold and Silver Project in northwest British Columbia, Canada. Advancement of the underground project has been assisted by the injection of US$81 million into the company by Zijin Mining Group which gave the Chinese group a 9.9% position in Pretium.
After the approvals were announced by the British Columbia Mines and Energy Minister Bill Bennett on July 31, Pretium said that construction would begin soon on the US$750 million underground gold and silver mine, 65km north of the town of Stewart, with first commercial production expected in 2017.
Brucejack is the first mine to be given the green light in BC since the failure of Imperial Metal’s Mount Polley tailings dam last year.
Minister Bennett stated at the time of approval: “With Brucejack, an unprecedented eight new mines have now opened or started construction since June 2011 - an achievement unmatched by any other jurisdiction in Canada.”
Brucejack is small but has high gold grades. It is in the Valley of the Kings near the Alaskan border and will create approximately 900 jobs during the two-year construction period as well as 500 jobs during an estimated 18-year operating life.
It also has the cooperation of, and benefits agreements with, First Nations in the region and requires no tailings pond. Half the tailings will go back underground and the rest into Brucejack Lake, which supports no fish population.
A feasibility study completed in June 2014 outlined proven and probable mineral reserves of 13.6 million tonnes grading 15.7 grams/tonne gold for 6.9 million ounces. Average annual production of 504,000 ounces of gold over the first eight years and 404,000 ounces of gold over the life of mine is expected with 2700 tonnes milled every day.
Most new gold mines face serious financing challenges but as gold prices have been volatile and at times below the US$1100 per ounce mark, the point where some newer mines become uneconomic, Brucejack’s economics are based on a sustaining cost of US$448 per ounce.
“A hallmark of the project is that it is a high-grade project, so that really offers a big benefit in times when you have uncertain gold prices or low gold prices,” said Pretium’s vice-president of corporate relations Michelle Romero. “Even if gold goes to US$800 an ounce, it’s still a double-digit internal rate of return. It’s still profitable at $800 gold.”