Underground exploration expected to start next year
Constantine Metal Resources plans to spend $18 million on the Palmer Project in 2022 — its largest annual project budget to date, according to a Wednesday press release.
The budget will cover construction of new infrastructure in preparation for underground exploratory operations, which the company expects to begin in mid 2023.
That infrastructure includes a year-round camp for 50 to 60 people, completion of an underground portal access road and facilities for an “updated wastewater discharge system” pending regulatory approval of a redesign that’s been in the works since 2019.
This year’s Palmer Project budget is about double last year’s.
The program “will set the stage to initiate underground exploration to provide essential technical information to be included in a future feasibility study,” Constantine president and CEO Garfield MacVeigh said in the press release. The company will continue exploratory surface drilling and environmental monitoring this summer. The underground exploration that could begin next year would involve building an underground tunnel of more than a mile long.
Constantine’s project partner, Japan-based Dowa Metals and Mining (DOWA), has committed to funding the entire 2022 program. Constantine will have the option to contribute before the end of the calendar year to mitigate dilution, the press release said. Constantine is the minority partner, with 45% ownership, but will remain the project operator.
“If Constantine does not contribute, it does not mean that DOWA will take over ownership of the project, but means that project interests would be adjusted according to project expenditures and contributions by both joint venture members and formalized with an audit at the end of the year,” MacVeigh said in an email to the CVN.
The Alaska Department of Environmental Conservation (DEC) in July 2019 issued Constantine a wastewater management permit for advanced exploration but remanded the permit a few months later following pushback from Haines residents and environmental groups who cited a pending federal court case about the limits of allowable groundwater pollution under the Clean Water Act.
DEC asked Constantine to do studies investigating the hydrology of the project area and submit a redesign of its wastewater management system for review before moving forward with construction. Constantine has yet to release the results of tracer dye testing initiated three years ago to determine connectivity between surface and groundwater. A 2020 U.S. Supreme Court decision could require Constantine to apply for federal permits if the studies show that there is connectivity.
“We have a Waste Management permit in place that would be reinstated upon regulatory approval,” MacVeigh told the CVN. “We will submit the redesign with supporting documents soon and will construct (it) once we have approval of the redesign. One challenge of operating in the project area is the short field season and we want to be prepared to complete any construction that we are permitted for this year.”
In other news, a Constantine representative told the CVN that the company is aware of the container rotation (“rotainer”) system that Yukon mining representatives recently said they could use to ship ore from a renovated Lutak Dock.
“Of course we will consider using this technology and it will be evaluated in detail along with other options during the feasibility study,” MacVeigh told the CVN.
More generally, in the press release, MacVeigh said the company intends to replace “the conceptual aspects of the current preliminary economic assessment” with “more detailed on-site and off-sight studies and cost estimates in a feasibility study.
Lynn Canal Conservation executive director Jessica Plachta raised concerns about DOWA’s lack of community engagement and pointed to public resistance as a potential problem for the Palmer Project.
“DOWA’s ongoing investment and gradual takeover of Constantine’s Palmer Project is alarming, but it can’t change the fact that this project has unsolvable social and environmental challenges,” Plachta wrote in an email to the CVN. “DOWA is the primary funder of the project but they have not responded to repeated requests to engage with the community.”
Local miner James Sage said he was excited to learn about Constantine’s news. “I’ve worked as a miner for 11 years and would love to see an underground mine here for my kids and others to work in,” Sage wrote in an email to the CVN. “I’m a hunter and fisherman too, so it’s not about trading jobs for the environment. Mining and logging and other industrial activities are not new to the Valley. They have helped build the community. I want to see my kids and others find work here at home rather than moving or traveling.”