Mineral Exploration is the official publication of the Association of Mineral Exploration British Columbia.
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Photograph : IDM Mining W I N T E R 2 0 1 4 25 V ancouver-based IDM Mining Ltd. recently announced sur- face sampling results from its Red Mountain underground gold project in northwestern British Columbia. IDM began surface drilling on several targets at Red Mountain in summer 2014. Highlights of the recent work from three new zones include 10.6 grams/ tonne gold over 3.94 metres in channel samples at the Wyy Lo'oop prospect in the Cambria Zone, and 10.9 grams/tonne gold over 8.13 metres in channel samples (Uxlox prospect, Cambria Zone). Eight of 10 grab and channel samples assayed more than 1.0 grams/tonne gold, up to 11.4 grams/tonne (Fridge Zone). IDM president and CEO Rob McLeod said in an announcement, "The discovery of high-grade outcropping sulphides 500 metres to the east and on strike from the Marc Zone resource is encouraging. We look forward to drilling the initial holes at the Wyy Lo'oop and Uxlox discoveries at the Cambria Zone [in the near future]." The positive drill results came on the heels of a July preliminary economic assess- ment (PEA) of Red Mountain that showed what the company says are the project's robust economics. The PEA outlines Red Mountain's expected low capital and oper- ating costs, robust economic potential and near-term production profile. Based on a gold price of US$1,250 per ounce and a silver price of US$20 per ounce, the pre-tax, base-case econom- ics indicate a net present value (NPV) of $90 million at a five per cent discount rate, an internal rate of return (IRR) of 43.3 per cent and a 1.3-year payback of initial capital. In addition, the after-tax, base-case economics indicate a NPV of $58 million at a five per cent discount rate with an IRR of 32.8 per cent and a 1.5- year payback of initial capital. Because of the wide nature of the mineralized zones, the majority of the deposit is amenable to bulk underground long-hole mining methods. The esti- mates are based on a production rate of 1,000 tonnes per day. The life-of-project direct operating cost of Red Mountain is estimated at US$516 per ounce of gold recovered. Net of the silver byproduct, costs are US$455 per ounce. Initial capital costs are esti- mated at US$76 million (including 15 per cent contingency). The economic model assumes base-case gold recovery rates ranging from 82 to 93 per cent for gold, and 71 to 86 per cent for silver. Mine life is estimated at five years, with average annual payable produc- tion at 55,500 ounces of gold and 171,000 ounces of silver. The mine is expected to Red Mountain IDM MINING ANNOUNCES POSITIVE EXPLORATION RESULTS By Peter Caulfield 1:43:50 PM