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British Columbia-focused Chieftain Metals got some positive news from the provincial government this week. The minister of environment, Mary Polak, determined on Wednesday that the company’s Tulsequah Chief project “has been substantially started.”
British Columbia-focused Chieftain Metals (TSXV:CFB) got some positive news from the provincial government this week. The minister of environment, Mary Polak, determined on Wednesday that the company’s Tulsequah Chief project “has been substantially started.”
The decision means that Chieftain’s environmental assessment certificate (EAC) will remain in effect for the life of the project, allowing the company to continue development. There is a requirement that approved projects must be substantially started within a time limit set out on a company’s EAC, otherwise the certificate will expire, as noted in Wednesday’s government press release.
“We are pleased with Minister Polak’s decision,” said Chieftain’s president and CEO, Victor Wyprysky, in a statement. “The project has had well over $100 million spent on advancing it and this is a most welcome decision to the people of Atlin who have demonstrated widespread support for the project in recognition of the major economic and social benefits which will accrue to the entire community with the mine development.”
Back in February, when Zinc Investing News interviewed Wyprysky, the CEO mentioned a projected negative cash cost due to by-product metals at Tulsequah, as well as a “potential 10-fold upside” for the company.
However, Wyprysky admitted that financing was an issue, and the company hit a bump in that respect late last year — its $60-million streaming agreement with Royal Gold (TSX:RGL,NASDAQ:RGLD) was terminated in December, shortly after the company voluntarily moved from the Toronto Stock Exchange to the TSX Venture in a move to cut down on listing costs.
Still, the company seems to have kept things moving at Tulsequah, as it was required to invest significant amounts of time, effort and resources in developing the project in order for it to be considered “substantially started.”
In terms of what’s next, Wyprysky said that the company is planning to secure financing and move forward according to a feasibility study completed for Tulsequah late last year. The optimized feasibility study, which contemplates an 1,100-tonne-per-day underground mining operation with an 11-year mine life, reduces the capex for the project to $198 million through a design with lower tonnage.
“We are now finalizing project financing with partners with a plan to begin the next phase of construction, which will allow the company to develop one of the highest grade, lowest cost, zinc-rich projects permitted for construction,” he said. “The development schedule is expected to meet the looming global zinc supply deficit due to growing demand and numerous mines closing as they run out of ore.”
At close of day on Thursday, shares of Chieftain were up 9 percent, trading at $0.18.
Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.
Related reading:
Chieftain Metals: Negative Cash Cost Projection and Potential 10-fold Upside
