The Palmer VMS Project is a copper-zinc-gold-silver-lead-barite mine being developed by the Dowa Joint Venture (JV) in the Porcupine Mining District of the Haines Borough in Alaska, US.
An option and joint venture agreement was signed by Constantine North and Dowa Metals & Mining of Japan in February 2013 under which Dowa received the option to earn a 49% interest in the project by contributing $1.02bn as aggregate expenditure for a four-year period.
The JV was formed in January 2017 when Dowa completed its $22m earn-in to the project and exercised its option to participate in the project as a partner.
The partners in the Dowa JV are Constantine North a wholly owned subsidiary of American Pacific Mining, (51%) and Dowa Metals & Mining (49%). Dowa saw an increase in its interest in the JV in July 2021.
Project Gallery
With a total CAPEX of $418m, the project is an advanced stage and high-grade volcanogenic massive sulphate-sulphide deposit operated by Constantine North and managed by American Pacific.
A Preliminary Economic Assessment (PEA) of the project was prepared for Constantine Metal Resources and published with an effective date of June 2019 and a reporting date of March 2022.
According to the PEA, the economic analysis of the project shows that the project has a Post Tax Net Present Value (NPV) of $266m (base value price) at 7% discount rate, a Post Tax Internal Rate of Return (IRR) of 21% (base value price), and a Post Tax payback period of 3.3 years at base value price. The mine will produce for 11 years, and the production will cease in Q2 of year 11.
American Pacific signed an arrangement agreement with Constantine in August 2022 and acquired all shares (issued + outstanding) of Constantine in November 2022. This resulted in Constantine becoming a wholly owned subsidiary of American Pacific.
In December 2022, Constantine funded the project with around $1bn to maintain its ownership with 41.08% interest while 58.92% is owned by Dowa Metals.
The JV has funded $25.5m for 2023 programme.
Palmer Location and Description
The Palmer VMS Project lies 55km northwest of the Haines Town in Southeast Alaska. The western boundary of Palmer is coincident with the British Columbia Province of Canada and the international border.
The project is 2km from the Haines Highway and 60km from the deep-sea port of Haines. The highway links the deep-sea port of Haines with British Columbia, Yukon, and the Alaska Highway.
The Palmer Project consists of 63 state mineral claims covering an area of approximately 9,200 acres or around 3,680 hectares. The project also has 340 federal unpatented lode mining claims covering an area of approximately 6,765 acres or around 2,738 hectares. The Alaska Mental Health Trust also leased 65,772 acres to Constantine.
In total, the project covers an area of 81,737 acres or around 33,078 hectares.
History of the Palmer VMS Project
Barite and the base metal sulphides were first discovered by Merrill Palmer, a local prospector, in 1969 in the Glacier Creek prospect.
From 1969 to 1971, regional mapping was completed by the United States Geological Survey providing a groundwork for the project.
Anaconda Copper Company conducted diamond drilling of the first three drill holes (801m in total) in 1979. Anaconda started a mapping program in 1980 but terminated the option before follow-up drilling.
In 1983, high-grade massive sulphide boulders were discovered at the small ice sheet base near Mount Henry Clay. These were up to 1.8m diameter and grading up to 33% of zinc and 2.5% copper.
The discovery of boulders was followed by four consecutive drill programs by Bear Creek Mining/Kennecott (1984 and 1985), Granges Exploration inc. (1989), and Rubicon Minerals Corporation (1999).
The project was explored by Newmont Exploration Ltd. in mid-late 1980s and helicopter-borne magnetic electromagnetic survey was conducted by Bear Creek Mining in mid 1980s.
Cominco provided details of three airborne electromagnetic surveys with TDEM (EM-37) ground surveys in 1991. In 1993 and 1998, two drill holes, one in each year, were drilled by Bear Creek and Rubicon respectively.
Geology and Mineralisation
The Palmer VMS Project is located within a mafic-dominated and bimodal sequence of submarine volcanic rocks containing VMS mineralisation.
The volcanic rocks are discontinuously exposed belt of late Triassic, rift-related volcanic and sedimentary rocks of the Alexander Terrane.
The project consists of two VMS deposits: Palmer and AG Zone (newly discovered). The Palmer Deposit consists of the South Wall and RW Zones.
The Palmer Deposit contains six mineralisation styles and grouped according to dominant mineral assemblages and texture. The mineralisation includes Barite Mineralisation rich in zinc, massive Pyrite Mineralisation rich in copper, Semi-Massive and Stringer-Style Mineralisation, Carbonate Mineralisation, Barite-Carbonate Mineralisation, and Massive Pyrrhotite Mineralisation.
The mineralisation of the AG Zone consists of Massive and Semi-Massive sulphide and barite and feeder-style stringers and replacement.
Mineral Resource Estimate
The total indicated mineral resources of the mine are 4,677,000 tonnes containing 539Mlb zinc at a grading of 5.23%, 154Mlb copper at a grading of 1.49%, 4.6Moz silver at a grading of 30.8g/t, 45.1Koz gold at a grading of 0.30g/t, 1,116 K tonnes barite at a grading of 23.9 BaSO4%, 1,053Mlbs zinc equivalent (ZnEq) at a grading of 10.21%, and 404Mlbs copper equivalent (CuEq) at a grading of 3.92%.
The total inferred resources are 9,594,000 tonnes containing 1,047Mlb zinc at a grading of 4.95%, 124Mlb copper at a grading of 0.59%, 90Mlb lead at a grading of 0.43%, 21.4Moz silver at a grading of 69.3g/t, 120.6Koz gold at a grading of 0.39g/t, 2,654 K tonnes barite at a grading of 27.7 BaSO4%, 1,876Mlbs ZnEq at a grading of 8.87%, and 719Mlbs CuEq at a grading of 3.40%.
Mining Methods and Ore Processing
The mine is to be mined using transverse and long hole stoping methods.
An exploration drift of 5*5m (width*height) will be driven from the 680-exploration portal located 680m above mean sea level.
The exploration drift will function as a haulage route from the AG Zone deposit to the underground crusher.
A second 510 conveyor drift of 6*5m will transport material from the underground crusher to the processing plant.
The recovery of minerals will be done by an underground processing plant. The crushed product will be transferred to the plant at a rate of 3,500t/d producing copper, zinc, and barite concentrates. The plant will have an availability of 92% and operate 24 hours per day and 365 days per year.
The primary grinding circuit will have a semi-autogenous grinding (SAG) mill. It will operate in an open circuit and will be followed by a ball mill operating in a reverse closed circuit with cyclones. The circuit will grind the product to 80% passing (P80) 72µm.
The product will enter sequential copper and zinc rougher or cleaner flotation circuits. The copper and zinc regrind circuits will liberate the rougher concentrates targeting P80 grind sizes of 35µm and 50µm.
The copper and zinc flotation circuits will have a rougher flotation, a rougher concentrate regrind, and three cleaning stages. The barite circuit will have a rougher flotation and three stages of cleaning but no regrind.
The final concentrates will get thickened and filtered to a targeted moisture content of 8% for zinc and copper. These will be loaded to trucks for transport to a local port and then sent to smelters.
The barite would be dried to further 1% moisture and then transported to Haines. The pyrite rougher concentrate will be filtered and then mixed for depositing underground.
Infrastructure
The infrastructure of the project includes access roads, crushed mineralised rock bin, a mill feed conveyor, a processing plant, a re-agent storage house, a liquefied natural gas (LNG) fuel power generating plant and storage facility, and a tailing filtering and paste backfill plant.
The other facilities include a tailing management facility or waste rock storage facility, a water treatment plant, an administration and a mine dry building, a warehouse, site water management facilities, a 120,000l of on-site fuel storage and distribution facility, and industrial management facilities.
Power Supply and Distribution
The power is to be supplied by on-site generator sets. A power plant will be constructed consisting of five natural gas-fired reciprocating engine generator sets in a N+2 arrangement.
Each set will work on a 2,500kW cat engine G3520H or equivalent and operate at 1,500rpm and generating power at 4.16kV.
For approximately one week of operation, an LNG storage facility will be built at the power plant site. The fuel will be sourced from the existing liquefaction plants in Canada. Tractor trailers will be used to transport fuel through a highway to the site via Skagway to Haines.
Overhead transmission lines will supply power to the mine site. Substations will be built in the processing plant and site infrastructure facilities to step down 4,160V voltage as needed.
Contractors Involved
The PEA of the project has been prepared by JDS Energy & Mining, Core Geoscience, Advantage Geoservices, and Klohn Crippen Berger.
Kuipers & Associates performed the technical review of the technical report of the project in March 2020.