COVID-19 adds another delay to mine proposal
There is gold in the mountains of B.C.’s remote northwest, at least 39 million ounces of it in a claim staked out by Seabridge Gold a 65-kilometre helicopter flight from Stewart.
But a mine that would employ more than 1,000 people and generate $30 billion of gross domestic product for B.C. over a 59-year life cycle remains just a plan on paper. The company is looking for more time to begin construction before its environmental approval certificates expire.
Seabridge has formally filed an application with the B.C. Environmental Assessment Office for an emergency two-year extension of the B.C. environmental permit owing to the wrench that the COVID-19 pandemic has thrown into work needed to continue advancing its KSM mine proposal.
“We thought that asking for a two-year extension under this (COVID) emergency was realistic and warranted,” said Seabridge CEO Rudi Fronk.
Seabridge scaled back its field workforce this summer to just a handful from a crew of 60 to 80 rock-drillers and technicians it would normally have on site, honouring the request of its First Nations partners to reduce the number of outside workers coming into their territories, Fronk said.
As a result, the company will complete only about a quarter of its planned work this season in what is typically a $30-millionper-year program.
“Clearly, we don’t have the ability to get all the work done that we had planned to do this year, and perhaps next year, because of COVID.”
Seabridge was granted its B.C. Environmental Assessment certificate in 2014, which gave the company five years to begin substantial construction of a mine, with an option to request a five-year extension. However, Fronk said that approval came in the middle of a downturn in mining that made courting a major mining firm with pockets deep enough to shoulder the project’s now $6.7-billion cost difficult.
And discussions that Seabridge had been in with potential partners prior to the pandemic have also been interrupted, Fronk said, as those firms pare back their own capital spending.
“We were expecting a proposal from a syndicate back in March,” Fronk said, which “kind of pulled in their horns” as COVID hit.
To date, Seabridge has spent $300 million and estimates it will have to spend another $600 million to $750 million to advance the proposal to a final investment decision, preferably with a partner.
The firm did receive the five-year extension, giving Seabridge a 2024 deadline to begin substantial construction.
KSM stands for Kerr-Sulphurets-Mitchell, the names of three deposits in the claim that now includes a fourth by the name of Iron Cap, which makes it one of the world’s largest undeveloped gold deposits, according to the firm.
The total project would comprise three open pits and two underground block-cave mines expected to yield 183 million ounces of silver, 10 billion pounds of copper and 207 million pounds of molybdenum in addition to its gold.
Conservation groups, whose long-standing concerns with KSM have focused on the sheer size of its proposed tailings facilities to contain acid-generating waste rock, aren’t enamoured with the idea of that extension.
“They already have a certificate now which will give them 10 years to get their project substantially started,” said Greg Knox, executive director of the Terrace-based group Skeena Wild, who considers COVID-19 “a poor excuse” to ask for an extension.
“If they can’t get it done in 10 years, then they should have to go through a new environmental assessment and abide by the updated (B.C. Environmental Assessment) standards in the province.”
Knox said it could be an expedited assessment, considering all of the environmental studies Seabridge has already done, but after 10 years, the public should get a chance “to look at whether there are new technologies and mining practices available that could deal with this tailings dam issue.”
Section 46 of the Mines Act does allow the minister to vary conditions of a permit, including its deadline, in response to an emergency, said Scott Bailey, an associate deputy minister of energy and mines, in a letter to Seabridge.
To use that provision, however, “the minister must be satisfied the challenges the project currently face are directly related to the emergency and that the variance would be in the public interest.”
Fronk said some of the work Seabridge has done includes finding ways to reduce the surface impact of a potential mine by reducing the size of open-pit operations and increasing underground mining, which generates less waste.
And Fronk said all five First Nations impacted by the project, including the Nisga’a and Tahltan, which have impact-benefit agreements with Seabridge, still support KSM.