Water shortage threatens Centerra Gold's Mount Milligan copper-gold mine

Mount Milligan mine | BIV files

Centerra Gold's (TSX:CG) Mount Milligan mine, located about 250 km north of Prince George, may have to reduce production due to reduced precipitation and a minimal snow melt

The Toronto-headquartered miner, which warned investors about water constraints in its second quarter news release, has applied to British Columbia regulators to access additional water sources through July 2020.

"If regulatory approvals to access water sources are not received as expected and given the expected maintenance shutdowns, the Mount Milligan mill would need to operate only one ball mill to conserve water and throughput would be reduced to approximately 30,000 tpd for the fourth quarter," says the company in a news release.

"At that rate, the outlook for 2018 production at Mount Milligan would be reduced to 175,000-195,000 payable ounces of gold and 40-47 million payable pounds of copper."

Mount Milligan is an open-pit copper and gold mine with a 62,500 tpd design capacity. The mine has faced water issues in the past.

Miners worldwide are facing growing water constraints and with grades declining, mines will need more water to operate.