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Avanti Mining Inc. is developing its core asset, the Kitsault Molybdenum (Mo) project, a former producing mine, with established (power-grid utility, road & ocean access) infrastructure, located near coastal British Columbia, 140 km north of Prince Rupert. View Animated Project Video
A NI 43-101 compliant Prefeasibility Study completed by Wardrop Engineering in December, 2009 calculated Proven & Probable reserves of 215.3 million tonnes grading 0.085 % Mo, with a 15-year mine life, producing 368 million pounds (average annual production of 24.5 million lbs/year) of molybdenum.
With cash operating costs estimated at $4.43 per pound Mo, this makes the Kitsault Moly project, not only one of the highest grade deposits, but one of the Top-5 primary molybdenum assets - worldwide.
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| Kitsault Molybdenum Mine, British Columbia |
The Kitsault Molybdenum mine is located 600 m above sea level, within a couple kilometers of tidewater on Alice Arm, in the Skeena Mining Division of British Columbia.
The Kitsault property contains three known Molybdenum deposits: Kitsault, Bell Moly, and Roundy Creek, all of which are within the western margin of the Bowser basin in the Intermountain tectonic belt, a few kilometers east of the Coast Plutonic Complex. Hosts for mineralization of these three deposits are thermally metamorphosed interbedded argillite and greywacke of the Upper Jurassic to Lower Cretaceous Bowser Lake Group, and the intrusive lithologies of the Lime Creek Intrusive Complex, Clary Creek Stock, and Roundy Creek instrusive complex, respectively. Intrusives associated with Molybdenum mineralization at Kitsault, Bell Moly, and Roundy Creek are multiphase diorite, quartz monzonite, and younger felsic units. Cross cutting relationships within the intrusive indicate that multiple mineralizing events produced the Molybdenum deposits.
Kitsault, Bell Moly, and Roundy Creek are intrusive related Molybdenum deposits that form zones of mineralization that are generally annular in plan and arcuate in section. Except for the chemistry and mineralogy of the source intrusive, there are many similarities to Climax-type Molybdenum deposits. Similar deposits include Ajax (Dak River), Cannivan Gulch, Bald Butte, Pine Nut, Buckingham, and Creston. These are distinct for the quartz monzonite batholithic type where Molybdenum mineralization has more of a lenticular shape and commonly related to the youngest phases of the batholiths. Typical examples of the batholithic type are Endako, Adanac, Mount Tolman, and Thompson Creek.
Kitsault Project Overview
- Kitsault is one of the top five primary Molybdenum development assets worldwide.
- It is a high-grade resource with existing infrastructure consisting of an electricity grid and ocean and road access.
- It is permitted, but will need an amendment for tailings disposal and the resultant environmental assessment.
- An ongoing reclamation plan is already in place.
- Avanti will be able to benefit from the extensive historical geologic, production and other data compiled by others during Kitsault's prior two periods of production.
- While it is early in the re-evaluation of the three Molybdenum deposits, there are some initial ideas for additional exploration that might lead to expansion of the resources and the possible discovery of previously unknown Molybdenum deposits. An airborne geophysical survey is needed to define areas of interest outside of the known deposits.
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NI 43-101 Compliant Resource Estimate
On August 5, Avanti announced a Canadian Institute of Mining, Metallurgy and Petroleum (CIM) compliant resource estimate for the Kitsault Molybdenum Mine. At a 0.04% Mo cut-off grade, this estimate contains an Indicated resource of 158 million tonnes grading 0.10% Mo, containing 348 million pounds of Molybdenum, and an additional Inferred resource of 133 million tonnes grading 0.08% Mo, containing 235 million pounds of Molybdenum. This resource estimate was the subject of a National Instrument 43-101 (NI 43-101) Technical report entitled "Technical Report, Kitsault Molybdenum Property, British Columbia," which was filed on SEDAR that date. The qualified persons ("QP"), as this term is defined in NI 43-101, who endorsed this Technical Report were Jeffrey Volk, P. Geo., and Roger C. Steininger, PhD, CPG.
The indicated and inferred categories were limited to an optimized pit shell using a Molybdenum price of $20/lb; a metallurgical recovery of 89%; unit mining cost and combined processing and G&A costs of US$2.00 and US$9.50, respectively; and slope angles of 40° in all areas. The mineral resources are reported at a cut-off grade to reflect the "reasonable prospects" for economic extraction.
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Mineral Resource Estimate
The mineral resources statement for the Kitsault Molybdenum project is summarized in the table below:
Kitsault Molybdenum Deposit* - July 16, 2008
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Grade |
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Contained Metal |
Resource
Classification |
Quantity
(mt) |
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Molydbenum
(%) |
Silver
(g/t) |
Lead
(%) |
WO3
(%) |
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Molydbenum
(Mlbs) |
Silver
(Moz) |
Lead
(Mlbs) |
WO3
(Mlbs) |
Indicated** |
158 |
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0.100 |
4.31 |
0.022 |
0.008 |
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348 |
22 |
78 |
0.880 |
Inferred** |
133 |
|
0.080 |
3.70 |
0.018 |
0.007 |
|
235 |
16 |
52 |
0.667 |
*Mineral resources are not mineral reserves and do not have demonstrated economic viability. All figures have been rounded to reflect the relative accuracy of the estimates. The cut-off grades are based on metal price assumptions of US$20.00/lb of Molybdenum, and a metallurgical recovery of eighty-nine percent for Molybdenum. Silver, Lead and WO3 were not used in the pit optimization.
**Reported at a cut-off grade of 0.04% Molybdenum contained within a potentially economically mineable open pit.
Preliminary Feasibility Study
- High-grade mine with a 15 year life
- 215.3 million tonnes of Reserves
- Grading 0.085% Mo (First five years averages 0.10% Mo)
- 368 million pounds of Molybdenum (24.5 million pounds/yr) (First five years average 28.8 m lb/yr)
- Strip Ratio of 0.75:1
- Averaging 40,000 tpd
- Metallurgical Recovery of 90.6%
- Positive Economics at an average LOM moly price of $15.76/lb
- Capital Costs of $641 million
- Operating Costs (Mine Site) of $4.43/lb of payable Mo
- After tax NPV (8%) = $551 million
- IRR of 20.6%
- After tax net cash flow of US $1.56 billion
- Pay back in 3.8 years
Craig J. Nelsen - President, CEO and Director
Mr. Nelsen has over 30 years exploration and development experience. He currently serves as a Director of New Gold Inc. Previously with Gold Fields, Metallica Resources and Lac Minerals.
Amjad J. ("AJ") Ali - Chief Financial Officer
Mr. Ali is a Chartered Accountant with over 25 years experience in the mining industry. Previously with Denison Mines, Vista Gold, EuroZinc and Centenario Copper.
Robert G. Blair - VP Exploration
Mr. Blair has more than 35 years of experience directly devoted to the exploration and discovery of porphyry molybdenum and copper deposits. He was one member of the team of three geologists directly responsible for the discovery of the world-class Henderson molybdenum mine at Red Mountain, Empire, CO. Previously with Cyprus - Amax, Climax, Getty Minerals and Coeur d’Alene.
Kenneth Collison - Senior VP Project Development
Mr. Collison has over 30 years of experience in the mining industry. Most recently, he served as Chief Operating Officer of Thompson Creek Metals, which included the responsibility for the operations of the Endako and Thompson Creek molybdenum mines. In addition, he has held various high ranking positions with Coeur d'Alene Mines and Rio Algom Ltd.
Thomas J. Gunthardt - Project Manager
Mr. Gunthardt has extensive international experience in managing the execution of natural resource development projects, ranging from prefeasibility studies to construction. He worked for Newmont Mining Corporation from 1996 to 2009 and filled various roles, most recently as Project Manager of an iron ore prefeasibility study in Guinea. Previously with Bechtel, Kilborn & Minproc.
