With a mining camp of 270, 19 drill rigs, and more than $100 million allocated for exploration work this year, New Gold Inc.’s Blackwater project near Vanderhoof is poised to become one of northern B.C.’s largest mines.
“It’s certainly one of the larger and one of the more exciting projects underway in B.C. right now,” Gavin Dirom, president and CEO of the Association for Mineral Exploration BC, told Business in Vancouver.
Vancouver-based New Gold (TSX:NGD) acquired the project last year as part of its $513 million Richfield Venturesacquisition.
Bob Gallagher, New Gold’s president and CEO, said his company has spent approximately $40 million on advanced exploration work since the acquisition and plans to spend more than $100 million this year.
Last year, total mineral exploration spending in B.C. was $463 million.
“We’ve currently got 19 drill rigs there, and I’m pretty sure that’s the biggest mining exploration program in British Columbia – and it’s probably the biggest in Canada,” Gallagher said. “It’s a very big deposit, and we want to as quickly as possible determine what we’ve got.”
The project contains an estimate 5.5 million ounces of gold in an indicated category and 2.3 million ounces of gold in an inferred category.
Gallagher is quick to credit Peter Bernier, former president and CEO of Richfield, for making the discovery at Blackwater.
“Blackwater had been looked at by a number of companies since the 1970s, but nobody really drilled in the right place deep enough,” he said. “Bernier picked up the company as a very small company, he tapped his friends on the shoulder to get them to buy stock, he mortgaged his house – I don’t know if you’d say he bet the farm, but he certainly went way out on the line to raise the money to drill it out and explore it.”
Gallagher said New Gold acquired the company when the project began to require major capital.
He added that the total project will cost approximately $1.5 billion, but said that, if metal prices stay at or near where they are today, New Gold’s other operations will generate enough to cover the project cost.
“We should pretty much be self-financing.”
Gallagher said the project will peak during a two-year construction phase, anticipated for 2015 and 2016, with up to 1,500 employees. He added that once the project reaches a production stage, anticipated for 2017, New Gold expects to have approximately 500 permanent employees.
Vanderhoof Mayor Gerry Thiessensaid the project, which is approximately 160 kilometres southwest of the municipality, has driven jobs and economic growth in Vanderhoof.
“Not only [has New Gold] opened an office in town, they have employed many contractors and workers from Vanderhoof, some have started new lines of work, which have allowed them to diversify our economy.” •
