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Environmental group scrutinizes Constantine PEA

 

June 11, 2020



Rivers Without Borders commissioned an analysis of Constantine Metals’ preliminary economic assessment (PEA) which describes the Palmer Project as “highly speculative,” with a high likelihood of exceeding the estimated capital and operating costs.

The nonprofit group said the proposed local mine fails to demonstrate economic viability. Constantine vice president and spokesperson Liz Cornejo questioned the objectivity and depth of the report.

The environmental conservation organization hired Kuipers & Associates to analyze the PEA that Constantine released last summer. The PEA estimated an 11-year mine life that could be extended as exploration becomes more concrete. Constantine president and CEO Garfield McVeigh described the project as high-quality with strong economics.

The analyst, Jim Kuipers, disputes that idea. Kuipers has spent 35 years working in the mining industry. He has a bachelor of science degree in mineral processing from the Montana School of Mines. He’s worked as a senior engineer, chief metallurgist, mill superintendent, mine manager, project manager and consulting engineer at various mining projects in Nevada and Alaska. He formed his consulting company in 1996 and has consulted with public interest groups, environmental organizations, tribes and governments concerning mining and environmental concerns. In 2016, he testified to the U.S House of Representatives subcommittee on energy and mineral resources for an oversight hearing on how to improve technology, safety and environmental practices in the industry.

In his analysis of Constantine’s PEA, he was critical of the plan to produce and market barite, a mineral used in the oil and gas industry for drilling muds, and said that it overvalued the price it could sell barite based on United States Geologic Survey data.

“They had to include barite to make this work,” Kuipers said. “Green’s Creek, and a lot of other places, are situated in similar geologies and could also produce barite but they don’t. There’s a reason they don’t: it’s just not viable. They really have something that’s quite speculative.”

Kuipers also said the PEA’s estimated costs relative to both the design, reclamation and closure are based on the assumption that the tailings and waste rock facility will not result in a discharge requiring treatment post-reclamation.

“This assumption is based on preliminary information. The Greens Creek mine, which is noted as similar elsewhere in the PEA, also originally predicted no long-term water treatment, however today it is recognized that long-term treatment will be required.”

Rivers Without Borders Alaska campaign director Chris Zimmer said Constantine’s stock decline since the PEA’s release indicates a lack of investor confidence in the Palmer Project.

Constantine vice president and public relations person Liz Cornejo declined to answer questions specific to Kuiper’s report. She questioned the report’s objectivity and thoroughness. She said the PEA was developed by a team of independent engineers and geoscientists governed by professional ethics and a fact-based review of the science.

“It is important to remember that the Palmer Project is still in the advanced exploration stage. There are and will be many ongoing environmental, engineering and exploration campaigns necessary to complete the analysis of a feasible project,” Cornejo said. “In our view, Mr. Kuipers’ comments do not meet the same level of rigor or objectivity. Rather it appears his goal was to develop a report that supports the Alaska anti-mining lobby divestment efforts.”

 
 

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