Exploration of deposit stalls 2nd year
Constantine Metal Resources Ltd., which has spent about $10 million exploring the Palmer ore deposit since 2006, probably won’t work at the copper and zinc claim near 38 Mile this summer due to difficulty in securing financing.
No work was done on the property last year.
“We are very disappointed to be idle on the property,” said Darwin Green, vice-president for exploration. “But we are optimistic about the long-term prospects for the deposit and its chances to develop into a future, modest scale, long-life, underground mining operation.”
At this point, expansion is the priority, Green said. The company’s website describes Palmer as a deposit with “tremendous” opportunity for expansion based on results of previous years’ exploration expenditures.
Tapping into the property’s significant expansion potential is necessary since it is not yet big enough to mine, Green explained in an interview.
He said Constantine isn’t sure when it will secure financing needed for further exploration. Investors are interested in the deposit, but not enough to restart exploration, he said. He attributed the difficulty to the current market. In general, investors avoid high risk investments in troubling economic times, he said.
While Constantine did have the opportunity to go ahead with a smaller scale drill program, the company is at a stage in the project where a larger investment is required to advance it, he said.
Constantine estimates that further exploration requires at least $5 million per year for two or three years to tell if the deposit has the size and grade necessary to make mining economically feasible. Additional years would then be spent conducting and analyzing environmental, engineering and other studies to determine mining viability.
The process requires patience, Green said. While things are moving slowly right now, the company is confident that it will secure the necessary financing – whether independently or through a partner, he said. “We are committed to finding a way to advance the project. We feel strongly it will be busy again before too long.”
Preliminary studies show that it is economically feasible to support a mining operation if Constantine can increase estimates of tonnage of similar grade by 50 or 100 percent. According to the company’s latest resource estimate published in 2010, Palmer holds a resource of 4.75 million tons grading 1.84 percent copper and 4.57 percent zinc. Per ton, the find holds .28 grams of gold and 29.1 grams of silver.
“It is a relatively high-grade deposit,” Green said.
Another key advantage of the property, he noted, is its “excellent” location. Located 38 miles from town near the Canadian border, Palmer has the “most obvious mine potential” of Constantine’s properties. The company’s other projects are located in British Columbia, the Yukon, and Ontario.
Constantine acquired its “flagship asset” in 2006 and has since drilled 42 holes. “We are highly committed to it,” Green said. “We hope that it will someday be a mine that provides a long lasting positive contribution to the region.”
The company always tries to hire and purchase locally, he said, adding that there is an “excellent talent pool” in Haines.
No exploration activity took place at Palmer last year but the company hired locals to help continue environmental work, including baseline water quality sampling, Green said. He said he expects that some Haines residents will work with Constantine on the project when exploration resumes.
Constantine will have an informational booth at the Southeast state fair.