AVANTI BREATHING NEW LIFE INTO OLD KITSAULT MINE
Byline: Monica Lamb-Yorski
The Daily News (Prince Rupert)
Thu Feb 18 2010
Located 140 km north of Prince Rupert, the mine was abandoned by Amax in the early 1980s due to high costs of production. The mine had been operated by Amax for only three years.
In June 2008, the mine was awarded to Avanti through a bidding process, selling for $20 million.
Since then, the company has invested an additional $20 million into its development plans. If all goes well, construction should kick off sometime in 2011.
Speaking from Denver, Colorado on Feb. 17, Avanti President and CEO Craig Nelsen said he was researching molybdenum opportunities worldwide and knew the Kitsault was well known in the 1960s.
“The BC Ministry of Energy, Mines and Petroleum Resources has quite a bit of information on Kitsault. I had been researching the commodity and noticed that Kitsault stood out as having a highgrade concentrate. That’s always good when you’re building a mine,” Nelsen added.
Avanti began doing its homework and interviewed people that had worked in the mine when it was in operation.
“They confirmed a lot of the information we’d read about, so eventually we contacted the owners and learned they’d been contacted by a number of companies – so they conducted a bidding process,” Nelsen said.
The mine, he explained, will be a moderate sized open pit mine with a 40,000-ton a day concentrator. From that amount around 70 tons of concentrate can be recovered, so the remaining tailings will be stored in a compound area.
“In the old days, the tailings were dumped into Alice Arm, but we don’t advocate that,” confirmed Nelsen. Instead, the tailings will be permanently deposited behind the dam.
“Water is diverted around them and they are covered, eventually reclaimed and vegetated.”
Within the tailings there are small amounts of lead and silver associated with molybdenum and the company is hoping to eventually develop a process to earn profit from those commodities as well.
Initially the company had looked at the possibility of developing a kiln roaster in one of Prince Rupert’s industrial areas, for roasting concentrate from the Kitsault Mine and other companies, but they have re-assessed that idea, and decided against it.
“On the surface it doesn’t look to be that profitable of a decision,” Nelsen explained. “It was an alternative we were looking at, but it doesn’t seem economically viable. There are kiln roaster facilities around the world we’d ship to. Presently ocean shipping is a reasonable transportation cost.”
Nelsen is confident, however, that communities like Prince Rupert could benefit directly from the mine’s reopening. There will be 330 direct employees at the mine and the spin-offs regionally could be as high as 1,000 he noted, adding that he envisions a seven-day on and seven-day off scenario. Employment could be accessible for workers from the surrounding communities of Prince Rupert, Terrace, Stewart and the Nisga’a villages.
On February 17, the company submitted its application to the BC Environmental Process.
According to Nelsen, the environmental process and the financing will determine the mine’s start up date. “Those two factors will dictate our start.”
In the meantime, the company’s project manager, Finn Conradsen, is managing field activities at the site, said Nelsen.
“There are a number of environmental studies going on. We have a winter goat study and every month we monitor the snowfall. In June or July we’ll do stream monitoring and water chemistry. We drill hydrological holes to evaluate ground water,” Nelsen said.
It is also routine to drill ‘condemnation holes’ to find places ideal for waste ponds and tailings, making sure there is no ore.
“You don’t want to cover ore deposits that would be viable in the future. We think we know where most of the mineralization is, but we have to go out and prove it,” Nelsen said.
If progress looks favourable for the company to proceed with the project, there will be information sessions held in local communities over the next winter.
“Now that the application is going for the environmental review you should hear more and more about it formally,” Nelsen added.
One fly in the ointment is a court case, scheduled to take place March 8 – 10, 2010 at BC Supreme Court, between Avanti Inc. and the town of Kitsault’s present owner, Krishnan Suthanhiran.
Kitsault, a modern day ghost town, was built in 1981 to accommodate workers and their families at the old molybdenum mine. It had everything up-to-date, including curbed roads, a school, houses, hospital, shopping centre and swimming pool.
The President of the Virginia based Best Medical International, Inc., a biomedical engineering firm that specializes in medical devices to treat cancer, Suthanhiran purchased the town in January 2006 for $5.7 million US, with plans to develop it as an eco-retreat.
According to his website, his plan is to invite artists, scientists and single moms – giving the moms free room and board, while educating them – and at the same time working on a cure for cancer. The anticipated opening for the resort would be in 2011.
On September 2008 Avanti Inc. filed a complaint against Suthanhiran with B.C. Supreme Court, alleging it had attempted to access the town of Kitsault on Aug. 30, 2008 to work on the mine and was denied access.
“We don’t want to fight with our neighbours, but he doesn’t want to talk,” Nelsen said.
Contact with Suthanhiran concerning this issue has not yet been successful, but follow up will be attempted.
INTERVIEW WITH PROJECT MANAGER:
Finn Conradsen, Project Manager for the Avanti Mining Project at Kitsault, lives in Prince Rupert, and is excited about the possible economic opportunities of the mine for northwest communities.
“There has been quite a bit of employment generated around the mine redevelopment,” Conradsen said Wednesday. “People from Terrace, the Nisga’a Valley and Prince Rupert have worked at the site.”
To date most of the jobs have been created around the environmental studies that began in 2008, took place in the winter of 2008/2009, and are continuing now in winter 2009/2010.
“In addition to goat and wildlife surveys, there have been fish wildlife surveys, water quality surveys and ground water quality studies. There’s been geotechnical drilling along with the environmental studies. The environmental studies are a significant focus at this time,” Conradsen explained.
In the summer of 2009, a temporary camp at the mine operated for 120 days plus, employing over 24 people. The camp required support services by helicopter and water transport, while the project employed trades people and professionals. Even the two residents of Alice Arm, Charlie and Dana Fleenor, have provided support services,” Conradsen commented.
Conradsen has been working the area for six years. Prior to the mine project he was involved with the Anyox Hydro project.
He believes there will be socio-economic spin offs from the mine and that it will give better access to the area. Because there is already an existing infrastructure for the mine that includes water and road access, and hydropower, it is considered a ‘brownfield’ project, he explained. “It makes it affordable and the footprint of the project is less because it is utilizing an already existing infrastructure.”
© 2010 The Daily News (Prince Rupert)
