The River Valley area, east of Sudbury, looks ripe for a potential open-pit platinum group metals (PGM) mine. After crunching the numbers in an economic study, New Age Metals announced there's enough palladium in the ground at its River Valley PGM project to support a large-scale mine for at least 14 years, creating 325 jobs in the process.
The Vancouver-based junior miner released a preliminary economic assessment (PEA) on June 27 of its property in Dana and Pardo Townships, 60 kilometres east of Sudbury.
On its 15,800-acre property, the company is proposing a $495-million bulk mining operation that would produce 119,000 ounces of palladium a year.
The main use of palladium is in the auto industry for catalytic convertors. Most of the world's palladium supply is mined in South Africa and Russia.
Since first acquiring the property in 1998, New Age (formerly known as Pacific North West Capital) has been expanding and touting this project as the "largest undeveloped primary PGM resource in North America."
Now it looks economically doable.
Last summer, New Age hired a stable of consultants to design a scenario for an open pit operation, all the required surface infrastructure and a tailings facility, as well as forecast the project economics, outline the metallurgical test work and processing aspects, and deliver an updated mineral resource estimate.
The company's business case is predicated on a palladium base price of US$1,200 an ounce. As of June 25, palladium prices had surged to US$1,510.
In laying out their mining scenario, New Age's plan is to develop a series of 14 open pits, starting on the northwest corner of the deposit, and progress in a southeasterly direction over a 16-kilometre mineralized j strike length.
The complex would include a crusher and concentrator, with the concentrated material trucked to Sudbury for smelting and refining.
In its release, New Age did not disclose if it has an agreement with either Vale or Glencore.
The last resource estimate at River Valley, released in January, shows 2.9 million ounces of palladium equivalent (both measured and indicated) and 1.1 million ounces in the inferred category. The property also has occurrences of platinum, gold, copper, nickel, rhodium and cobalt.
Should New Age decide to proceed with a mine, a contractor will be hired to run the operation.
The operation, itself, would require a fleet of 221-tonne haul trucks, excavators and rotary drills, typically used in open-pit...
