BMC Minerals has just released the feasibility study into its Kudz Ze Kayah Project confirming the proposed mine southeast of Ross River is economically viable.

“This is certainly a project that deserves development in our view,” company president Scott Donaldson told the Star in an interview Wednesday.

“This is a solid project and is economically viable,” he said. “We are happy with the results of the feasibility study confirming the results of the pre-feasibility study.”

Donaldson said they expect to have their quartz mining licence next year, once they’ve completed the screening process by the Yukon Environmental and Socio-economic Assessment Board.

They anticipate securing the water licence in 2021. After that, BMC’s board of directors will make a final decision on whether to go forward with the project, he explained.

Donaldson said mining companies typically wait until they have the required permits in hand before making the final decision.

Approximately 90 per cent of the lead, copper, zinc, gold and silver will be mined through open pit operations, with the remaining 10 per cent coming from a smaller underground operation beginning in year three.

The life of the mine is estimated at between eight and nine years, though the study notes there is positive potential to extend the project through ongoing exploration.

“The Kudz Ze Kayah Project is anticipated to produce copper, zinc and lead concentrates,” says the feasibility study.

“The copper and lead concentrates in particular are expected to contain high levels of precious metals that are in turn expected to result in significant precious metals credits as an offset to operating costs.

“Once these bysproduct credits are accounted for, the Kudz Ze Kayah Project is anticipated to be a low-cost producer when compared against other zinc and silver mines.”

The study estimates the sale of zinc will generate 32 per cent of revenue; silver, 28 per cent; copper, 17 per cent; gold, 15 per cent and lead, eight per cent.

BMC is planning to truck the concentrate to the port of Stewart, B.C., for shipment to smelters overseas, with Asia expected to be the primary market.

The company is targeting 2022 to produce its first concentrate.

BMC Minerals is a subsidiary of BMC UK Limited, a private company. BMC purchased the property from Teck in January 2015.

For reasons of confidentiality, Donaldson said, he was not at liberty to say exactly how much the company has invested to date, but the work has been substantial.

BMC conducted major exploration drilling programs in 2015 and 2016, followed by smaller programs in 2017 and 2018, he explained.

Donaldson said this year, they’re focused on the permitting process.

Since filing their proposal with the assessment board 17 months ago, the company has answered 480 questions from the board, he pointed out.

Donaldson said BMC has a close working relationship with the Ross River Dena Council, which announced last week the completion of its own independent environmental assessment of the project.

In last week’s announcement, Ross River Chief Jack Caesar said: “The Ross River Dena Council is proud of the work undertaken by our wholly owned company, Dena Cho Environmental, in completion of the Environmental Assessment Review and we look forward to continuing our positive working relationship with BMC in the upcoming year.”

Donaldson said it’s expected construction of the mine will take between 19 and 21 months, with a workforce of 400 or so.

Similarly, the mine expects to employ approximately 400 people during operations, he said.

The company president said the estimated cost of construction in the feasibility study has come in US$80 million higher than the cost identified in the pre-feasibility because of changes to the project BMC is making.

Partly as a result of consultation with all the stakeholders, the company is choosing to beef up certain aspects of the proposal, such as its water treatment plant and the liners for waste rock storage areas and such, he explained.

The treatment plant, Donaldson said, will be of bullet-proof quality.

“We determined we can do better than we allowed for in the pre-feasibility study,” he said.

“We just decided to take a more conservative approach so we can be more certain of the outcome.

“There is a cost to that, and we have committed to that cost.”

Donaldson the Kudz Ze Kayah Project is not complicated, but straightforward.

And the BMC team that has been working on it for the past five years includes individuals with expertise constructing mines around the world.

“This is my fifth or sixth in 20 years,” he said. “This is probably one of the best mine developments I have seen for a company this size.”

The total cost of construction, including the cost of the underground work beginning in year three and an estimated US$79 million to cover the cost of closure, is estimated at $587 million, says the feasibility study.

The annual operations costs of the mine are estimated at $140 million.

It’s expected the mine will process about 5,500 tonnes per day. By comparison, the Minto Mine had a capacity of 4,000 tonnes per day.

“The company believes that the district remains highly prospective in terms of the potential for future discovery,” says the feasibility study.

“Additional work is planned to be undertaken with the aim of building a mineral resource base that could significantly extend the life of the project.”