Economic Feasibility of Mining in the Chichagof and Baranof Islands Area, Southeast Alaska

Mining and processing cost analyses were conducted on magmatic segregation and low sulfide vein gold deposit types that may be found in the Chichagof and Baranof Islands Area. Resources and recoverable metal values (RMV) needed to make these deposits economically viable were modeled. Methods for estimating ore grades and required RMV are presented.

Economic modeling for magmatic segregation deposits indicated the RMV necessary for a 15% Discounted Cash-Flow Rate-Of-Return (DCFROR) for a surface mine with an on-site mill ranged from $61/mt for a 5,051 mtpd operation to $236/mt for a 631 mtpd operation. A surface mine using off-site processing at an existing mill located near Hyder, Alaska would require an RMV of $148/mt for a 5,051 mtpd operation to $261/mt for a 631 mtpd operation. Off-site milling was more costly than on-site milling.

Economic modeling for low sulfide vein gold deposits indicated the RMV necessary for a 15% DCFROR for an underground shrinkage stoping mine, off-site milling operation ranged from $219/mt at 643 mtpd to $653/mt at 80 mtpd, and from $181/mt at 643 mtpd to $828/mt at 80 mtpd for an on-site milling operation. Off-site milling was less costly than on-site milling until production exceeded approximately 300 mtpd. Then, economies of scale reduced operating costs enough to offset the higher capital costs required for on-site milling.