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Chieftain Metals’ Proposed Tulsequah Chief Mine Fraught with Risks and Uncertainties Says New Report

Chris Zimmer : Feb 27.2012

 

FOR IMMEDIATE RELEASE
February 27, 2012

FOR MORE INFORMATION
Chris Zimmer, Rivers Without Borders, (907) 586-2166, zimmer@riverswithoutborders.org

 

Chieftain Metals’ Proposed Tulsequah Chief Mine Fraught with Risks and Uncertainties Says New Report

(Juneau, AK)— A report released today by Rivers Without Borders demonstrates that Chieftain Metals’ Tulsequah Chief mine proposal is fraught with financial risks and uncertainties. The report documents the involvement of some of Chieftain’s executives in bankruptcies and questions the reliability of mineral and cost estimates. The analysis also discusses potential permitting and construction delays, undeclared environmental risks, and economic returns to the local community. The report, Risk Analysis of the Chieftain Metals Tulsequah Chief Mine Proposal, can be found at http://riverswithoutborders.org/wp-content/uploads/2012/03/Tulsequah-Chief-Risk-Analysis-2012-02.pdf.

Tulsequah Chief Risk Analysis

Risk Analysis of the Chieftain Metals Tulsequah Chief Mine Proposal. Click on report image to see report.

“Based on this analysis, Chieftain Metals’ estimates of costs, minerals and profitability should be met with scepticism,” said report author Joan Kuyek. “This report demonstrates that Chieftain’s capital cost estimate of $365.3 million is likely underestimated.”

The controversial proposed Tulsequah Chief mine is located on a major tributary of the Taku River in northwest British Columbia, near the Alaska border. The Taku is the region’s number one salmon river. Alaskans continue to raise numerous concerns about the Tulsequah Chief project related to impacts on salmon and salmon habitat.

The report, written by mining analyst Joan Kuyek with assistance from Ugo LaPointe, B.Sc.H., a consultant in social and environmental responsibilities of the mining industry, analyzes publicly available documents, including Chieftain’s latest cost and mineral data. The analysis found that some major costs, such as road construction and decommissioning and site remediation, are likely underestimated. “The quantity of minerals that may be economically feasible to mine has not been established,” is another notable conclusion of the report.

The proposed mine access road route is through the traditional territory of the Taku River Tlingit First Nation (TRTFN). The recently-signed Land Use Plan between the TRTFN and the government of British Columbia requires an extensive consultation process and First Nation approval on any such road proposal. The report notes a history of TRTFN opposition to similar road proposals and also notes that the First Nation has made no decision on Chieftain’s road proposal.

According to the report, “There has not been a feasibility study for the mine with road access since 1995 that indicated the Tulsequah Chief project is economically viable. Two of the studies were stopped by the mining company when they did not show positive results. The latest partial feasibility study… indicated capital costs of over $500 million.” SRK produced a Preliminary Economic Assessment of the Tulsequah Chief in June 2011. A formal feasibility study is expected in April.

Previous attempts to re-open the Tulsequah Chief by Redcorp ended in bankruptcy in 2009, resulting in losses to secured creditors of about $100 million and investors’ losses of nearly $190 million.

Rivers Without Borders is a project of Tides Center and Tides Canada Initiatives.