The mine ancillary equipment fleet includes such equipment
as excavators, mine rescue trucks, picker trucks, cranes, snowcats, forklifts, service trucks, welding trucks, sump pumps and float trucks.
All of the following snow fleet equipment is chosen to start
operating during pre-production and continue to the end of mine life, unless otherwise noted.
The snow fleet has a low utilization as it is only required
in winter. Other than the use of the scrapers for summer construction projects and stockpiling road crush, operating the snow fleet equipment
outside winter is not currently scheduled.
In addition to providing an area for maintenance bays, tire
shops, and a wash bay, the maintenance shop will also house:
The recommended shop sizing for the open pit operations includes
eight service bays, one welding bay, and three wash bays. This will accommodate the fleet for the LOM PFS production plan. The mine maintenance
facility will also include a machine shop area, tool storage area, mine muster area, warehouse, and office complex. A separate tire bay
facility will be required with an exterior heated pad to accommodate at least two trucks and a tire manipulator.
The summarized production schedule results are shown in Table
16.9 and Figure 1.2. The mine production plan starts in higher grade pits combined with lower strip ratios (higher margin pit phases)
as much as possible to reduce pre-stripping costs and time. Development mining within the pit limits will start with the development fleet,
transitioning to the large-scale equipment fleet. As work space becomes available. Pre-stripping will use the owner’s personnel
and mining fleet in the pre-production years and will expose sufficient ore to ensure the ongoing production can sustain the mill requirements
onward after mill startup. After mill startup, cut-off grade strategy is used to enhance revenues for a minimum capital payback period.
The cut-off strategy stockpiles lower grade open pit material early in the mine life. The LOM strip ratio is 1.05.
The proposed KSM plant for the 2022 PFS will start with nominal
process rate of 130,000 tpd and expand to 195,000 t/d by Year 3 of operations. The process plant will receive ore from Mitchell,
Sulphurets, and East Mitchell deposits. The planned mill life is approximately 33 years, excluding the production development stage and
closure stage. The Mitchell deposit will be the dominant resource of mill feed for the process plant and will supply mill feed throughout
the projected LOM. Ore from Sulphurets deposit will be fed to the plant together with the ores from Mitchell and East Mitchell pits starting
from Year 5.
A combination of conventional flotation and cyanidation processes
are proposed for the PFS. The processing flowsheet was developed based on the test results discussed in Section 13. In general, the mineralization
from Mitchell, Sulphurets, and East Mitchell deposits are amenable to the combined flotation and cyanidation process. The process plant
will consist of three separate facilities:
HPGR is proposed for the tertiary crushing because of its
energy efficiency. The process is shown in the simplified flowsheet in Figure 17.1 and detailed in the following sections.
The concentrator is designed to process an average of 195,000 t/d.
The major criteria used in the design are shown in Table 17.1.
The process plant is designed to process 195,000 t of ROM
per day in three separate lines, excluding bulk cleaner flotation, copper molybdenum separation, and gold and silver extraction circuits
which will be operated in one line. In the initial two years, the designed mill feed rate is 130,000 t/d. Additional equipment will be
installed before Year 3 to increase the mill process rate to 195,000 t/d in Year 3. The processing plant layout at Treaty site is
shown in Figure 17.2. The electricity power required for the process plant will be from FLT1 located at southeast of the process plant.
Details of the power supply are described in Section 18.11.
At the Mitchell OPC site, primary crushing will consist of
three 60 in by 89 in gyratory crushers, three apron feeders, one train load surge bin feed conveyor, and associated transfer
conveyors. The ROM material feeding the gyratory crushers will be mainly from the Mitchell pit in the initial years with main supplement
from the upper zone of East Mitchell. Although the ore from the Sulphurets pit will be fed to the mill in Year 5, its main contribution
will occur during Year 9 to Year 12. Most of the ore from the main East Mitchell zone will be introduced to the mill after Year 13. The
ROM will be approximately 80% passing 1,200 mm. The oversized materials will be fragmented by rock breakers. The gyratory crushers
will reduce the ROM material to a particle size of 80% passing 150 mm or less. The products from each gyratory crusher will be fed
to one 1.83 m wide by 37 m long conveyor via one 2.13 m wide by 10 m long apron feeder. The crushed ore from the feeders
will be transferred and fed to a 2.13 m wide by 495 m long train load surge bin feed conveyor, which will be located inside
of the Mitchell surge bin feed conveyor tunnel. The surge bin is designed to have a live capacity of 30,000 t (two pockets, each
15,000 t).
The ROM ore from the Sulphurets pit will be trucked to the
Mitchell site and crushed at the Mitchell crushing facility. Similarly, the ore from the East Mitchell deposit will be trucked to the
three crushers for crushing to 80% passing approximately 150 mm.
The crushed ore will be reclaimed by two automatic train
loading systems from the two coarse ore surge bins located underground at the Mitchell site and transported to the plant site at Treaty
site by a train transport system through the MTT. Loading chutes under the ore surge bins will feed ores into awaiting trains that will
transport the ores to an unloading station at the Treaty end of the MTT. The train cars will dump ore into a live underground unloading
bin. Two apron feeders will unload the bin onto two conveyors to transport the ore to the two coarse ore stockpiles adjacent to the MTT
tunnel port at the Treaty site. Loading chutes will be controlled remotely and unloading chutes will operate autonomously. No onboard
operators will be required within the tunnels during train system operation. Because the loading and unloading systems including surge
bins are located underground, the arrangement would mitigate potential freezing and weather interruption issues.
The crushed ore from the trains will be continuously and
automatically unloaded from the bottom discharge train cars into the bin underneath, with each car taking an average of nine seconds to
unload. The train will be driven via traction drives across the unloading station at a maximum speed of 2.5 km/h.
At the bottom of the surge bin, the ore will be reclaimed
by two apron feeders and then onto two conveyor belts that will transport the ore to the surface and feed two Treaty coarse ore stockpiles,
each with a live capacity of 90,000 t at the Treaty OPC covered site. Apart from the conveyor tunnel, a vertical escape tunnel that joins
the unloading station and the surface will be constructed for emergency egress.
The ore will be reclaimed from the stockpiles, each stockpile
by six 1.4 m wide by 8.5 m long apron feeders and conveyed in two lines to the secondary crushing circuit. A total of four conveyors
will reclaim the crushed ore to four double-deck vibrating screens for secondary crushing. A dust collecting system will be installed
to collect fugitive dust generated at each of the transfer points. The reclaim tunnels will be heated to prevent potential freezing during
operation in winter.
The reclaimed coarse ore will be conveyed to the secondary
crushing facility and fed to four vibrating screens. Each screen oversize will feed a secondary cone crusher. The cone crushing facility
consists of four cone crusher feed surge bins and four cone crushers. Each secondary crusher is in closed circuit with a screen. The cone
crusher product will return to the screen feed conveyor. In normal operation, all four cone crushers will be in operation. If one cone
is down for maintenance, the other three crushers will be capable of delivering the required tonnage for the downstream operation.
Screen undersize product that are finer than 50 mm will
be delivered by conveyor to three HPGR feed surge bins, each with a 3,250-t live capacity feeding two HPGR crushers. The circuit will
consist of the following key equipment:
The crushed ore from secondary crushing will be conveyed
to three tertiary crusher HPGR feed surge bins, each with a live capacity of 3,250 t.
The ore from the HPGR surge bins will be further crushed
by six HPGR crushers. Six belt feeders will withdraw the ore from the three HPGR feed surge bins and feed each of the six HPGR crushers
separately. Each HPGR crusher is in a closed circuit with a 4.0 m wide by 8.0 m long double deck vibrating screen. Discharge
from the HPGR crushers will be conveyed to three 3,250-t ball mill feed surge bins prior to being fed to the six ball mill feed screens
at a controlled rate. The material is wet screened at a cut size of approximately 6 mm. The screen oversize will return to the HPGR
feed bin while the screen undersize will leave the crushing circuit and report to the ball mill grinding circuits. The six HPGR crushing
lines will have a total process capacity of 8,644 t/h. The key equipment is as follows:
The grinding circuit will employ conventional ball mills
to grind the HPGR product to a particle size of 80% passing 125 to 150 µm. All the primary grinding circuits are designed to have
a nominal processing rate of 8,644 t/h, each line with a nominal capacity of 2,881 t/h.
The primary grinding circuit will include six milling circuits
(four circuits for the initial 130,000 t/d at Year 1 and six circuits for 195,000 t/d at Year 3), which are made up of the following equipment:
Each ball mill will be in a closed circuit with a cluster
of hydrocyclones. The hydrocyclone underflow will gravity-flow to the ball mill feed chute, while the overflow of each hydrocyclone cluster
with a solid density of approximately 35% weight/weight (w/w) will gravity-flow to one of the six copper-gold-molybdenum bulk rougher
flotation trains.
Lime will be added to each mill as required. Flotation collectors
will be added to the hydrocyclone feed sumps or to the hydrocyclone overflow collecting sumps.
There will be three copper-gold-molybdenum bulk rougher flotation
circuits. The overflow from two of the six hydrocyclone clusters from the primary grinding circuits will separately feed the three flotation
trains, each consisting of five 500 m3 flotation cells. The flotation reagents used will include lime, A208, 3418A, fuel oil,
carboxy methyl cellulose (CMC) and MIBC. A bulk copper-gold/molybdenum rougher flotation concentrate, approximately 6% to 7% of the flotation
feed by weight, will be reground. The flotation tailing will be sent to the pyrite flotation circuit.
The bulk concentrates from the three copper-gold/molybdenum
rougher flotation circuits will be combined and reground to a particle size of 80% passing 15 to 20 µm in a two-stage regrind
circuit. The first stage regrind circuit consists of three tower mills each with an installed power of 2,240 kW, in a closed circuit
with a 250 mm diameter hydrocyclone cluster. The overflow of the hydrocyclones with a particle size of 80% passing approximately
30 to 35 µm from the first stage regrind mills will further be classified by a 150 mm diameter hydrocyclone cluster. The hydrocyclone
underflow will be pumped to two stirred mills for further regrinding. The second regrind mill discharge, together with the second stage
hydrocyclone overflow, will be pumped to the bulk copper-gold/molybdenum cleaner circuit.
The hydrocyclone overflow will be cleaned in three stages.
In the first stage of cleaner flotation, six 160 m3 tank cells will be used; for the second and third stages, three 100 m3
tank cells and one 100 m3 tank cell will be used separately. First cleaner flotation tailing will be further floated in two
cleaner scavenger flotation cells, each with 160 m3 capacity. The concentrate product from the cleaner scavenger flotation
will be sent to the first cleaner cells and the tailing will report to the gold leaching circuit. The tailing from the second and third
cleaner flotation stages will be returned to the head of the preceding cleaner flotation circuit. Final copper-gold/molybdenum bulk concentrate
will be sent to copper-gold/molybdenum bulk concentrate thickener.
The same reagents used in the rougher flotation circuit will
be employed in the cleaner flotation circuits.
Depending on molybdenum content, the final copper-gold/molybdenum
concentrate may be further processed to produce a copper-gold concentrate and a molybdenum concentrate. The separation will employ a conventional
process, which will include copper suppression by sodium hydrosulphide and four stages of molybdenum cleaner flotation and regrinding.
The circuit will include the following key equipment:
The copper-gold/molybdenum bulk concentrate will be thickened
prior to the copper-gold/molybdenum separation. The thickener underflow will be diluted and conditioned with sodium hydrosulphide and
gravity flow into the molybdenum rougher flotation cells. The rougher flotation tailing will be scavenged by flotation and the scavenger
concentrate will return to the rougher flotation head while the tailing will be the final copper-gold concentrate reporting to the copper-gold
concentrate dewatering circuit.
The resulting rougher molybdenum concentrate will be classified
by a hydrocyclone. The hydrocyclone underflow will be reground by a stirred mill. The regrind mill discharge will join with the hydrocyclone
overflow and report to the molybdenum cleaner flotation circuit. Four stages of cleaner flotation were designed to upgrade the molybdenum
rougher flotation concentrate to marketable grade. The tailing of each cleaner flotation will be returned to the head of the preceding
molybdenum cleaner flotation circuit while the first cleaner tailing will be sent to the molybdenum rougher flotation conditioning tank.
To reduce sodium hydrosulphide consumption, the molybdenum flotation cells will be aerated by nitrogen gas, which will be generated on
site by a nitrogen generator.
The final cleaner flotation concentrate will be leached to
reduce the copper content if it is higher than 0.2%. The leached product will be dewatered in a molybdenum concentrate dewatering facility.
The upgraded copper-gold concentrate, together with copper
sulphide precipitate generated from the cyanide recovery circuit by SART treatment, will be thickened in an 18 m diameter high-rate
thickener. The thickener underflow will be directed to the copper-gold concentrate pressure filter to further reduce the water content
to 9% moisture. The copper-gold concentrate will be stockpiled on site and then transported by trucks to a port facility at Stewart, where
the concentrate will be stored and loaded into ships for ocean transport to overseas smelters.
The average annual output of copper concentrate for the initial
two years, including ramp-up period in Year 1 and a lower nominal process rate of 130,000 t/d in Year 2, will be 345,000 dmt/a. After
completion of process plant expansion to 195,000 t/d in Year 3, the annual copper concentrate production is expected to increase to approximately
505,000 dmt/a (Year 3 to Year 10 average).
The molybdenum concentrate will be dewatered using a process
similar to the copper-gold concentrate dewatering. The filtered concentrate will be further dewatered by a dryer to 5% moisture content,
before being bagged and transported to the processors. The key equipment used in the dewatering processes will include:
The tailing of the copper-gold/molybdenum rougher flotation
circuits will be further floated in a pyrite flotation circuit. The pyrite rougher flotation will consist of three parallel lines, each
line with five 500 m3 pyrite rougher flotation cells.
Tailing from the pyrite rougher flotation will gravity-flow
or be pumped to the TMF located southeast of the main process plant.
The pyrite concentrate will be reground to a particle size
of 80% passing approximately 20 µm in four 2,240 kW tower mills. A hydrocyclone cluster consisting of thirty-six 250 mm
diameter hydrocyclones will be incorporated with the mills in a closed circuit. The hydrocyclone overflow will report to the gold leach
circuit or the copper-pyrite separation circuit to recover liberated residual copper minerals.
Depending on copper content, the reground materials may be
subjected to a flotation process to separate copper minerals from the other minerals. The copper concentrate will be sent to the copper-gold/molybdenum
cleaner flotation circuit, while the flotation tailing will report to the gold leach circuit.
The reground gold-bearing pyrite product and the first cleaner
scavenger tailing from the copper-gold/molybdenum bulk flotation circuit will be thickened to a solids density of approximately 65% in
one 65 m diameter high-rate thickener.
The underflow of each thickener will be pumped to one direct
cyanide leaching circuit, consisting of two aeration pre-treatment tanks and nine cyanide leaching tanks. In the pre-treatment tanks,
the thickener underflow will be diluted with barren solution to approximately 45% w/w and aerated. Lime will be added to increase the
slurry pH to approximately 11.
The pre-treated slurry will be leached by sodium cyanide
to recover gold and silver in a conventional direct cyanidation circuit. The leaching circuit will consist of nine agitated tanks, which
are 14.5 m diameter by 14.8 m high. Six leaching tanks will be installed in Year 1 and three additional tanks will be installed
in Year 2 for the increased throughput from 130,000 t/d to 195,000 t/d. Compressed air will be sparged under the agitators.
The leach residue will be dewatered in one 65 m diameter
high-rate thickener. The thickener underflow with a solids density of 65% w/w will be diluted to approximately 40% w/w and further leached
in a CIL circuit. The overflow will be treated by a SART process to recover copper and cyanide, and gold and silver adsorption to recover
the dissolved gold and silver in a bank of four 3.5 m diameter by 5.5 m high carbon columns.
The CIL circuit consists of eight 14.5 m diameter by
14.8 m high CIL leaching tanks (three of the tanks will be installed later in Year 2). Similarly, compressed air will be sparged
under the agitators.
The loaded carbon leaving the first tank of the CIL leaching
bank will be transferred to the carbon stripping circuit, while the leach residue will be blended and sent to subsequent processes including
residue washing, cyanide recovery, and cyanide destruction circuits.
Compressed air will be provided for the leaching process
from four dedicated oil-free air compressors.
The overflow of the direct leach residue thickener will be
sent to a cyanide recovery circuit where the copper and the cyanide will be recovered from the solution by a SART process. The post SART
solution will be subjected to gypsum removal treatment prior to being sent to the gold adsorption circuit.
The SART treatment includes the leach solution acidification
by sulphuric acid, copper, and other heavy metal precipitation from the solution by sodium hydrosulphide. The copper sulphide precipitates
will be blended with the copper-gold concentrate for sale.
The overflow of the CIL leach residue washing thickener will
be sent to a separate cyanide recovery circuit where the copper will be removed, and the cyanide will be recovered from the solution by
a SART/AVR process. The SART treatment is similar to the one used for the solution from the direct cyanidation circuit. The resulting
copper sulphide precipitates will be blended with the copper-gold concentrate for sale. A part of the SART treated solution containing
free cyanide released from copper and other heavy metal complexes will be directly recycled back to the CIL circuit while the balance
is further treated by AVR cyanide recovery process. The solution will be pumped to two volatilization towers in series which will be carried
out in a negative pressure system generated by a vacuum system. The solution will be sprayed from the top of the tower and pass through
a fixed bed matrix while stripping air is blown from lower section of the tower to provide a high liquid surface area to promote volatilization.
The gas phase will be directed through an absorption tank,
in which a caustic solution is circulated counter-current to the gas to absorb hydrogen cyanide. The regenerated cyanide solution will
be returned to the leach circuit.
The cyanide-depleted solution from the volatilization tower
will be circulated to the leach residue washing circuit and the leach circuit after the solution is treated with lime to a pH above 9.5.
The loaded carbon will be treated by a Zadra pressure stripping
process for gold desorption.
The loaded carbon will be transferred to two elution vessels.
The stripping process will include the circulation of the barren solution through a heat recovery heat exchanger and a solution heater.
The heated solution will then flow up through the bed of the loaded carbon and overflow near the top of the stripping vessels. The pregnant
solution will flow through a back pressure control valve and then be cooled by exchanging heat with the barren solution prior to reporting
to the pregnant solution holding tank for subsequent gold recovery by electrowinning. The barren solution from the electrowinning circuit
will then return to the barren solution tank for recycling.
The stripping process will include barren and pregnant solution
tanks, two 3.5 t stripping vessels, four heat exchangers, and two solution heaters and associated pumps.
Prior to reactivation, the stripped carbon will be screened
and dewatered. The reactivation will be carried out in an electrically heated rotary kiln at a temperature of 700°C. The activated
carbon will be circulated back to the CIL and CIC circuits after abrasion treatment and screen washing.
The carbon reactivation process will include a reactivation
kiln, a carbon quench tank, and a carbon abrasion tank equipped with an attrition agitator, a reactivated carbon sizing screen, a carbon
storage bin, and fine carbon handling associated equipment.
The reactivated carbon may be washed by acid in two acid
washing columns to remove the metals/impurities that are loaded onto the carbon during gold and silver adsorption prior to being reused
in the leaching circuits.
The pregnant solution from the elution system will be pumped
from the pregnant solution stock tank through electrowinning cells where the gold and silver will be deposited on stainless steel cathodes.
The depleted solution will be subsequently reheated and returned to the stripping vessel. The electrowinning circuit will have a capacity
to process 150 kg/d of gold-silver doré bullion and will include two 3.5 m3 electrowinning cells, direct current
(DC) rectifiers, cathodes, anodes, and a pressure filter.
Periodically, the stainless steel cathodes will need to be
cleaned to remove precious metal residues by pressure washing. The cell mud will fall into the bottom of the electrowinning cells and
pumped through a pressure filter for dewatering on a batch basis. The filter cake will be transferred to the gold room for drying and
smelting after it is mixed with melting flux. A 125-kW induction furnace will be used for gold-silver refining. The area will be monitored
by a security surveillance system.
The residue from the CIL circuit will be pumped to a two-stage
conventional CCD washing circuit. The CCD circuit will consist of two 65 m diameter high-rate thickeners. The thickener overflow
from the first stage washing will be pumped to the cyanide recovery system. The underflow (washed residue) of the second thickener will
be sent to the cyanide destruction circuit prior to being pumped to the TMF.
The remaining cyanide in the washed leach residue from the
second washing thickener will be decomposed by a sulphur dioxide (SO2)/air oxidation cyanide destruction process. Sodium metabisulphite
will be used as the sulphur dioxide source. The equipment will include a 6 m diameter by 6 m high pre-aeration agitation tank,
three 12.5 m diameter by 13.5 m high sulphur dioxide oxidation tanks, and a wet alkaline scrubbing system. Compressed air will
be provided for the oxidation process. The treated residue will be sent to the copper removal treatment circuit.
A copper removal circuit is proposed to further remove the
dissolved copper from the treated residue slurry if the copper level in the slurry from the sulphur dioxide/air cyanide destruction circuit
is higher than the requirement. Activated carbon will be added to the residue slurry after the slurry is treated by cyanide destruction.
The copper removal treatment will be carried in two stages in two reactors. The loaded carbon will be removed from the first stage of
the copper removal reactor, while the fresh carbon will be added into the section stage of the copper removal reactor. The copper loaded
carbon will be stripped by acid washing and the copper in the washing solution will be precipitated by sodium sulphide. The precipitate
produced will be blended with the copper-gold concentrate for sale. The treated residue will be sent to the lined CIL residue cell in
the TMF.
The flotation tailing and the treated CIL residue will separately
gravity-flow to a tailing sand preparation facility adjacent to the TMF located southeast of the main process plant. Then both the tailing
and CIL residue will continuously flow to the TMF or be pumped to the TMF depended on the dam crest elevations. The flotation tailing
and CIL residue will be stored in separate areas within the TMF. If needed, the flotation tailing will be classified by hydrocyclones
to separate coarse tailing fraction for dam construction which will mainly be in operation in summer.
The CIL residue will be deposited in a lined CIL Residue
Cell. The residue will be covered with the supernatant to prevent oxidation of the sulphide minerals. The residue will be eventually covered
by the flotation tailing. The supernatant from the CIL residue pond will be reclaimed by pumping to the CIL circuit for reuse. The excess
water will be sent to a hydrogen peroxide (H2O2) water treatment plant to further remove impurities before it is
sent to the north or south tailing cells.
There will be three flotation tailing pipelines directing
the flotation tailing to the TMF. A standby pipeline will be installed for emergency bypass or maintenance requirements. If required,
the flotation tailing will be classified to produce coarse tailing sands by two stages of hydrocyclone classification. The coarse fraction
will be used to construct the tailing dam and the fines will directly report to the TMF. The supernatant from the tailing impoundment
area will be reclaimed by two reclaim water barges and sent to the process water tanks by two stages of pumping. The reclaimed water will
be used as process water for flotation circuits.
One energy recovery system will be installed on one of the
rougher flotation tailing lines to generate electricity.
A separate barge equipped with reclaim water pumps will be
installed in the flotation tailing storage pond to release the excess water via the Treaty Creek diffuser. Discharge will occur during
a five-month window, beginning during spring runoff when the creek flows are highest. A floating skimmer will be installed. If required,
flocculant will be added from the floating skimmer to improve the settlement of any suspended solids before the excess water is discharged.
All the reagents will be prepared in a separate reagent preparation
and storage facility in a containment area. The reagent storage tanks will be equipped with level indicators and instrumentation to ensure
that spills do not occur during operation. Appropriate ventilation and fire and safety protection will be provided at the facility.
Lime will be slaked, diluted into 15% solid milk of lime,
and then distributed to various addition points through a closed and pressurized loop.
Flocculant will be dissolved, diluted to less than 0.2% strength,
and then added to various thickener feed wells by metering pumps.
Flux will be added directly in solid form.
Three separate water supply systems will be provided to support
the operation: a fresh water system, a process water system for grinding/flotation circuits, and a process water system for cyanidation
and gold/silver recovery circuits.
On average, based on the preliminary water requirement and
water balance estimates, approximately 59,000 m3/day of process make-up water and 2,100 m3/day of fresh water will
be required for the processing plant.
Fresh and potable water will be supplied to two 12 m
diameter by 9 m high storage tanks from nearby wells and local drainage runoff areas. One tank will be located at the plant site
and the other at mine site. Fresh water will be used primarily for the following:
By design, the freshwater tanks will be full at all times
and will provide at least 2 h of firewater in an emergency. The minimum freshwater requirement for process mill reagent preparation
is estimated to be approximately 90 m3/h on average.
The potable water from the fresh water source will be treated
(by chlorination and filtration) and stored in a covered tank prior to delivery to various service points.
Two process water systems will supply the process water for
the process plant. The water for each circuit will be from different sources, as follows:
The water reclaimed from the flotation tailing impoundment
area will be sent to two 25 m diameter by 15 m high process water surge tank by two stages of pumping systems, while the bulk
concentrate thickener overflow will be directed to the primary grinding circuits. The process water tanks will be located approximately
25 m higher than the process plant base elevation. The water will flow to the various service points by gravity. A booster pump station
is provided at the plant site to pump water to the various distribution points where high pressure water is required.
The water from the CIL Residue Cell will be pumped to an
8 m diameter by 8 m high process water surge tank located at the plant site. The water will service the CIL leach/gold recovery
circuits. Any excess water from the CIL Residue Cell will be treated at the H2O2 WTP located at the Plant Site.
The treated water will be sent to the north or south tailing ponds.
The overall site water management is detailed in Section 18.2.
The assay laboratory will be equipped with necessary analytical
instruments to provide routine assays for the mine, process, and environmental departments.
The metallurgical laboratory, with laboratory equipment and
instruments, will undertake all necessary test work to monitor metallurgical performance and to improve the plant production and metallurgical
results.
The plant control system will consist of a Distributed Control
System (DCS) with PC-based Operator Interface Stations (OIS) located in the following three control rooms:
The plant control rooms will be staffed by trained personnel
24 h/d.
An integrated remote operation system has been incorporated
into the study. The integrated remote operations center (IROC) will be located offsite to remotely control and operate mining, process
and water treatment plant operations. The IROC will be operated by trained personnel 24 h/d. The integrated operation is the integration
of people, organizations, work processes, and information/operational technology to make faster and smarter decisions. It is enabled by
global access to real-time information, collaborative technology, and integration of multiple expertise across disciplines, organizations,
and geographical locations.
In addition to the plant control system, a closed-circuit
television (CCTV) system will be installed at various locations throughout the plant including the crushing facility, the stockpile conveyor
discharge point, the slurry pumping tunnel, the tailing facility, the concentrate handling building, and the gold recovery facilities.
CCTVs in these areas will be monitored from the local control room and the central control room.
An automated train dispatching system will be utilized to
achieve a safe and efficient flow of trains through the system, with no on-board operators. The system employing full radio-based train
spacing and speed supervision on the whole railway system will be supervised from a control room located in the train maintenance shop.
The train control system will operate using a wireless communications system (Wi-Fi) that must be in place for the entire track. While
wireless communications are the current state of the art technology for train control communications, it is recognized that more efficient
and reliable communications may be developed in the future.
Process control will be enhanced with the installation of
an automatic sampling system. The system will collect samples from various streams for on-line analysis and the daily metallurgical balance.
To protect operating staff, cyanide monitoring/alarm systems
will be installed in the cyanide leaching area as well as at the cyanide recovery area and destruction area. A sulphur dioxide monitor/alarm
system will monitor the cyanide destruction area as well.
In general, the mineral processing is designed to use conventional
flowsheet and mature technologies for the process plant. The flowsheet proposed is relatively simple and mining will start with conventional
open pit operation with an exposed ore body on the surface. HPGRs will be used for comminution circuit, which is expected to have fewer
potential rock hardness issues.
It is estimated that the plant may take approximately 12
months to reach 130,000 t/d after the plant is wet commissioned.
According to the metallurgical projections described in Section 13.6
and the current mine schedule, metal recovery and concentrate grades for the plant operation life are projected on a yearly basis, as
indicated in Table 17.2. The flotation concentrate grades for the low copper head grade materials has been adjusted to a minimum concentrate
of 23% Cu by adjusting copper, gold, and silver recoveries to achieve the target grade.
As shown by the test results, it is anticipated that, on
average, the impurity contents in the copper concentrates would be below the penalty limits as outlined for most of the smelters, although
in short periods the impurity content may slightly exceed the penalty limits as outlined for some of the smelters. The projected copper
concentrate quality is shown in Table 17.3.
In general, the molybdenum concentrate separated from copper
and molybdenum bulk concentrate will be leached on site to remove copper, lead, and other impurities. The anticipated molybdenum content
is approximately 50%. The main impurities such as copper and lead are estimated to be lower than 0.2% and 0.3%, respectively.
There will be two separate areas of infrastructure associated
with the 2022 PFS: the Mine Site and the PTMA. The Mine Site is the centre of mining activity and includes the primary crushing facilities
(Mitchell OPC). Process facilities will be located at the Treaty OPC in the PTMA, approximately 23 km northeast of the Mine Site.
Twinned tunnels (the MTT) will be constructed from multiple excavation headings to connect the mine site to the PTMA. Along the MTT route,
a topographical low (valley) is designated as the Saddle Area, approximately 17 km from the Mitchell portal, where the MTT will be
accessed via a construction adit. The TMF is located in a valley comprising the upper catchments of North Treaty and South Teigen creeks,
southeast of, and adjacent to the Treaty OPC.
The Mine Site layout at the end of construction is shown
in Figure 18.1.
The Treaty OPC area is shown in Figure 17.2 and the TMF area
is shown in Figure 18.2.
This section addresses the geotechnical designs for tailings
and mine rock management, as well as for site-wide water management. Designs were advanced in 2022 to incorporate incremental improvements
and changes to water management structures in the Mine Site and TMF areas, in response to commitments made during the EA process review.
In 2016, KCB re-assessed additional site climate and hydrology
data recorded through 2015. These analyses determined similar values to those adopted for the 2012 PFS (KCB, 2012a; KCB, 2013a; Tetra
Tech, 2012) for an average year. As a result, the water management design basis remained unchanged from 2012.
Other than 2019 Mitchell Valley rockfill sourcing investigations
for the WSD, 2021 hydrogeological drilling in the WSD, and 2021 foundation condition testing for temporary water treatment in Mitchell
Valley, no additional geotechnical site investigations have been completed for the WSD or RSF areas since the 2012 PFS (Tetra Tech, 2012).
In 2019 geomechanical and geophysical testing was completed
for monzonite rockfill for the WSD from the P8 Quarry which has similar properties to the Sulphurets Pit (KCB, 2019b).
In 2021 WSP Golder completed a hydrogeological drilling program
in the WSD area (Golder, 2021).
Foundation condition testing for Mitchell Valley temporary
water treatment facilities was completed by KCB (KCB, 2021).
The 2012 PFS provides a results summary of previous KCB Mine
Site geotechnical site investigations completed up to 2012 (KCB, 2009; 2010; 2011; 2012b; and 2012c).
Seabridge has completed regional geological mapping that
resulted in a Mine Site geology map, presented in Section 7.
Much of the annual precipitation at the Mine Site and PTMA
occurs as snowfall between October and May, while peak rainfall is associated with storms coming in from the Pacific between August and
October. Major elevation variations and numerous glaciers help create diverse climatic conditions across the site.
Two climatic regions are present within the site development
areas: the western region in the Sulphurets watershed (Mine Site) and the eastern region in the Treaty-Teigen watersheds (PTMA). The two
regions are 23 km apart and have differing climates. The two areas are separated by the Johnstone Icefield (ranging from 1,800 m
to 2,200 m in elevation).
Significant orographic and rain shadow effects were recorded
in the KSM area as part of the 2012 baseline study. In 2012, KCB and ERM performed extensive analysis of climate variations in Mine Site
and PTMA for engineering design and EA purposes (Rescan, 2013). Algorithms were developed based on the UBC watershed model to estimate
effects of variation in precipitation with altitude, and to adjust glacier and snow melt rates in response to climatic variations.
In 2016, metrological and hydrological data collected since
2012 was reviewed by KCB (KCB, 2016d). The result is that no significant trends have been observed in the additional data for average
site parameters, as compared to the data prior to 2012.
Weather data recorded at the Sulphurets weather station between
2007 and 2015 indicate the following:
The estimated mean annual precipitation is 1,652 mm
at Sulphurets weather station (elevation of 880 masl). Annual lake evaporation is estimated at 400 mm. Runoff at the Mine Site
is influenced by the effects of both seasonal snowmelt and glacial melt. Mitchell and McTagg glaciers are losing significant ice mass
on an annual basis. Runoff from glacier-influenced catchments is therefore larger than the annual precipitation over these catchments.
Effects of glacial meltwaters are included in the analysis of flows and extreme events. Monthly precipitation, evaporation, and runoff
distribution for the Mine Site, as well as the runoff distributions for the glacier catchments, is provided in Table 18.1.
Precipitation listed in Table 18.1 is representative
of the Sulphurets weather station at 880 masl and is derived from site data between 2008 and 2011. Additional site data recorded
since 2012 has not changed the values adopted for design.
The 2012 and 2016 KCB design reports present detailed analyses
of climate and hydrology data for the Mine Site (KCB, 2012b; KCB, 2016b) and PTMA (KCB, 2012a; KCB 2016b).
Seabridge has been monitoring the recession of site glaciers
by analyzing historical air photos, Light Detection and Ranging (LiDAR) data, ongoing GPS and remote sensing measurements of the glacier
extents. Glaciers in the Mine Site area continue to recede; recession rates for the Mitchell Glacier toe area recession since 2008 have
reached as much as 65 m/a and total recession has exceeded 2012 estimates. As a result, the Mitchell pit area is now ice free. The
locations of the initial stage proposed surface contact water inlets in the toe area of Mitchell Glacier are now also free of ice.
No additional geotechnical site investigations have been
conducted at the TMF since the effective date of the 2016 PFS, with the exceptions of a hydrogeological drill program by WSP Golder and
a program of mapping and sampling for till borrow material (KCB, 2019a) and a 2021 program that included refraction seismic and geotechnical/hydrogeological
drilling and testing in the PTMA plant site area (KCB, 2021)
A hydrogeological site investigation in the TMF area was
conducted by WSP Golder from June to September 2021, these investigations sought to reduce the hydrogeological data gaps at the TMF. Twelve
boreholes were conducted in the TMF area. Instrument installations included thirteen vibrating wire piezometers, at six locations, while
ten monitoring wells were installed at ten locations (Golder, 2021).
No additional tailings testing has been conducted for TMF
design purposes since 2012. The Treaty process plant will produce two tailings streams: the bulk rougher flotation tailings1
representing about 90% of the ore (by dry weight) and a fine, sulphide-rich cleaner tailings comprising 10% of the ore. The sulphide stream
will be cyanide leached using the CIL method and then processed for gold recovery. A two-stage cyanide destruction circuit is proposed,
using the Inco sulphur dioxide process, followed by hydrogen peroxide treatment2.
The flotation tailings is classified as NPAG and will be
cycloned to produce sand fill for construction of the tailings dams during the summer months. The fine cyclone overflow tailings will
be discharged along the upstream crest of the tailings dams. The entire flotation tailings stream will be discharged along the dam crests
during the winter months.
The CIL residue tailings is a high-sulphide concentration
material and is classified as PAG. This material will be deposited under water in the CIL Residue Storage Cell in the centre of the TMF
and kept saturated to mitigate the onset of acid generation.
Additional climate and hydrological data collected since
2012 was reviewed (KCB, 2016d) and the conclusion is that no significant trends in average parameters are apparent. As a result, the climate
and hydrology parameters used for design of the TMF in 2012 have been retained.
Weather data recorded at the TMF area from the Teigen Creek
weather station between 2009 and 2011, with additional data now available through 2015, shows the following:
The monthly precipitation and runoff distribution are provided
in Table 18.2.
A rendering of the ultimate mine site layout, including the
Mitchell RSF is provided in Figure 18.3. Design of the RSFs has not changed since the 2016 design other than the elimination of the
McTagg RSF and inclusion of a closure channel on the Mitchell RSF to replace the McTagg Closure Channel.
Conservative RSF designs were developed in collaboration
with MMTS to address the aforementioned design considerations using existing data. MMTS designed the RSF layouts, with geotechnical guidance
on slope stability and geotechnical recommendations from KCB.
The RSFs will be built in progressive lifts (bottom-up construction)
to initially confine toe areas and consolidate foundations to improve stability and reduce downslope risks.
Figure 18.3 illustrates ultimate water management structures
as existing at the end of mine life showing diversion tunnel routes and operational phase surface diversions.
Due to elimination of Mitchell Block Cave the MDT design
criteria is reduced from a 1,000-year to 200-year return period. This reduction is justified by the lower sensitivity of an open pit to
flood flows compared to a block cave. As a result, the MDT alignment can be a single axis. Additionally, the MDT is re-aligned to avoid
mineralized areas and to reduce tunnel length. The normally wetted depth of the revised MDT is concrete-lined to improve reliability,
reduce erosion and to reduce potential for loadings from areas of mineralized wall rock. The revised MDT alignment improves reliability
and constructability of the diversion with reduced risk from geohazards. The revised tunnel slope and alignment precludes MDT hydropower
development due to the challenging terrain for powerhouse and power transmission line development.
Elimination of the Mitchell Block Cave also allows for shortening
and realignment of the NPWDA that carries contact water from east of Mitchell Pit. Glacier recession and the elimination of the inlet
setback, that was previously required to avoid block cave subsidence cracking, allowed replacing the two additional stages of the surface
inlets shown in prior studies with a single stage.
McTagg Valley catchments are diverted around Mitchell RSF
and the WSF by an inlet at the same location as in the approved EA. The MTDT alignment discharges into the EA outlet location in Gingrass
Creek. The MTDT’s design is a single bore design that is fully concrete-lined. This design reduces tunneling volume, improves reliability,
and matches the rock types along the route. The MTDT includes provision for a single-stage, fully-developed hydroelectric facility from
start-up, instead of only in the later stages as in prior studies, thus replacing the start-up hydroelectric capability that was eliminated
at the MDT. The redesigned MTDT hydroelectric facility has a larger catchment than in prior studies. The revised tunnel route and outlet
portal location improves winter constructability and has direct access to the muck pads via a short construction access tunnel. The MTDT
construction access tunnel also shortens the length of the penstock to the McTagg Power Plant.
After mining is complete, perimeter closure channels will
be constructed at the top and margins of the RSF, and the channels widened for closure along the toes of the RSF. Operational phase channels
are shown on Figure 18.3; closure routings are similar.
Locations of the MDT sub-glacial inlets have not been adjusted
since 2012 (Tetra Tech, 2012). Elevations of the sub-glacial inlets, their arrangement, and the MDT alignment were adjusted for 2022 based
on ice-penetrating radar and hot water ice drilling completed over Mitchell Glacier in 2019. The 2022 PFS MDT outlet has been shifted
to a location that will support year-round construction via a construction access decline tunnel (KCB, 2022a).
The MDT alignment and elevation have been adjusted to avoid
or perpendicularly intersect the main identified faults in the area based on information from exploration drilling. From the inlets, the
tunnels curve eastward to intercept the Brucejack Fault at a near perpendicular angle. Further downstream, the alignment dips under the
sub-horizontal Mitchell Thrust Fault. The MDT configuration, as of 2022 design updates, consists of a single, partially-lined tunnel.
Due to the weaker Stuhini Formation rock in the area, the
MTDT alignment for the 2022 PFS will be a single, fully-lined tunnel. The inlet and outlet locations remain unchanged from the 2016 design.
The MVDT is a 5 km long, 5 m by 6 m tunnel
that drains to the WSF and conveys contact water around the Mitchel RSF. Prior to the construction of the MVDT in Year 2, water will be
routed around the pit and RSF area through surface channels to the WSF.
The MVDT connects to the NPWDA, which will be constructed
and available by Year 5, to accept pit wall drainage and local drainage of contact water from upstream of Mitchell pit and from the Snowfields
area.
The Mitchell RSF includes a Selenium Seepage Collection System
that is designed to collect up to 500 L/s of seepage and convey this flow to the Selenium WTP. Water from other sources will be treated
when seepage collected from the RSF is less than 500 L/s. The collection and treatment of seepage from the RSF, and other high selenium
loading waters, will enable selective removal of selenium from flows with higher selenium concentrations, compared to the lower concentrations
within the WSF. The Selenium Seepage Collection System will be operational by Year 5.
The Selenium WTP will discharge to the WSF to allow further
treatment for metals removal.
Seepage from the Mitchell RSF requiring treatment for the
removal of metals by the HDS process will be collected in the lower Mine Site by the WSD. The WSD is an asphalt core rockfill dam that
will create the WSF pond, and will be large enough to handle seasonal freshet flows as well as volume accumulated from a 200-year wet
year.
The WSD design was updated after the 2012 PFS (Tetra Tech,
2012) that included dam slope and internal zonation revisions (KCB, 2012e). The slopes and zonation of the dam are shown in section view
in Figure 18.4.
The WSD will be located in the lower Mitchell Creek area
and founded on competent rock. The WSD crest elevation is also unchanged from the ultimate dam height in the current design and will be
established at the full height of 716 masl (165 m height) before Year 1. An emergency spillway will be cut into rock on the
southeast side of the dam. There will be appropriate freeboard for avalanche wave mitigation and flood routing.
Water in the WSF is predicted to be acidic, similar to existing
seeps situated in the upper Mine Site. An asphalt core will be included in the dam to control seepage. Asphalt is inert with respect to
acidic water. To control seepage, the WSD and WSF Seepage Dam foundations will be grouted. The depth of the WSD grout curtain is designed
to vary from 25 m at the west abutment to as deep as 150 m at the east abutment if required. Grout hole spacing will be 2.5 m.
Fill for dam zones is specified such that critical zones
of the dam (e.g., sections in contact with the core) and drain zones will be constructed with materials that have low potential to react
with acidic water sourced from quarries tested to be geomechanically and geochemically adequate for construction. The anticipated quarry
to be mined for WSD construction rock will be the P8 Quarry residing in the western area of the Mitchell pit on the north side of Mitchell
Creek.
During the Application/EIS (Rescan, 2013) review process,
additional mitigations were developed to minimize seepage from the WSD. These design enhancements are included in the 2016 PFS. Changes
include six seepage interception tunnels that lower groundwater levels between the WSD and the WSF Seepage Dam to reduce the driving force
on seepage. The seepage collection tunnels will also facilitate foundation grouting both during construction and for remedial grouting
after completion of the WSD, if required.
An asphalt-core seepage collection dam will be located downstream
of the WSF. Water collected in this dam will be sent to the WTP via an HDPE pipeline.
The WSD Construction Diversion Tunnel (CDT) routes Mitchell
Creek around the dam footprint during construction. The diversion tunnel size is designed as 4.4 m by 5.0 m and is sized to
pass flows from a 50-year storm event. To reduce exposure to avalanche hazards, the downstream portal was moved upstream from where shown
in the EA resulting in a total tunnel length of 900 m.
Diverting McTagg Creek into a tunnel creates an opportunity
for hydroelectric power generation. Generated power can be used during mine operations or sold to the grid via the power lines through
the MTT. During operations, the hydroelectric plant will reduce the power requirements of the mine. Upon mine closure, the hydroelectric
plant will continue operating and will generate income and partially offset water treatment costs.
Temporary Water Treatment Plants (TWTP) and settling ponds
are designed to meet current guidelines for mine sediment control and settling ponds.
During the construction period, six TWTPs for TSS and metal
removal will be provided in the proposed mine area. Additional TWTPs will be located in the Saddle Area, and at the Treaty portal of the
MTT. The TWTPs are intended to deal with drainage from existing mineralized zones, PAG cuts, tunnel portals, and runoff from PAG tunnel
muck piles during the period before the permanent WTP is in operation.
The WSF and WTP is intended to be in operation during the
18-month pre-production period to capture sediment and runoff from mine area stripping and from fill placement during Mitchell OPC
and haul road construction.
The eight TWTPs and associated collection ponds will operate
during the construction period to manage potential metals, TSS, and ammonia in drainage from tunnel portals and from temporary stockpiles
of tunnel muck near the portals and other flows of contact water (Table 18.3).
The HDS WTP is designed to treat water that comes in contact
with areas of disturbance from mining operations and natural seeps in the area. Design of the HDS WTP process is unchanged since the EA
design. The HDS WTP was scaled down in 2022 due to revised estimated inflow rate commensurate with a reduction in impacted mine area.
Water will be collected in the WSF. Drainage from the Mitchell
pit and Mitchell RSF will be directed by gravity to the WSF. The water from the WSF will be pumped over the WSD to the HDS WTP. The HDS
WTP is designed with variable discharge rates in order to stage discharge to match the natural hydrograph, to ensure sufficient dilution
capacity to minimize any effects on the receiving environment.
The HDS WTP installed generation capacity will be 9 MW
and the two installed turbines will be capable of passing a flow of up to 4.0 m3/s.
The site selection for the HDS WTP is based on a mine life
and post-closure treatment for 200 years. The HDS WTP will be located at an elevation of 520 m on a flat benched terrain above the
flood plain near the confluence of Mitchell and Sulphurets creeks.
During operation, the sludge will be transported year-round
by truck to the Mitchell OPC and onto the ore trains within the MTT, where it will be transported with the ore to the stockpile located
at the Treaty OPC, fed through the Treaty process plant, and deposited with the tailings in the TMF.
The three principal reagents for the HDS WTP will be quick
lime, dry flocculant, and sulphuric acid for pH adjustment to 7.5. Table 18.4 provides an estimate of annual reagent consumption
based on an annual average of 49.8 Mm3 of water treated. The predicted total annual volume of water will vary from 44
Mm3 to 53 Mm3. After closure, the predicted long-term volume of water for treatment will be 43 Mm3/a.
Design of the Selenium Water Treatment Plant (Selenium WTP)
is unchanged since the 2016 PFS. BioteQ Environmental Technologies Inc. (BioteQ) demonstrated selenium removal of spiked Mitchell Creek
feed water during a pilot-scale ion exchange water treatment study (BioteQ, 2015).
The pilot study demonstrated reduction of selenium concentrations
from 120 ppb and 320 ppb feed water to less than 1 ppb (BioteQ, 2015). The Selen-IX™ Ion Exchange Circuit is designed
to selectively remove selenate from the feed water with a high efficiency in order to obtain the 1 ppb discharge limit, while concentrating
the selenium into a small volume of brine solution that is directed to the eluate treatment circuit. The eluate treatment circuit removes
selenium from the spent regenerant (or eluate) solution produced by the ion exchange circuit with an electro-reduction process using iron
and fixes the selenium into an iron-selenium solid that is easily separated from solution. The solution discharged from the eluate treatment
circuit is largely free of selenium and can be recycled back to the ion exchange circuit for re-use in resin regeneration.
As the Selenium WTP is only designed to remove selenium,
effluent from the Selenium WTP will report to the WSF for further treatment at the HDS WTP, prior to discharge to the receiving environment.
The general layout of the TMF is shown in Figure 18.2. The
TMF will be located within a cross-valley between Teigen and Treaty creeks. Three cells will be constructed: the North Cell and the South
Cell will store flotation tailings, and the CIL Residue Cell (fully lined with a geomembrane) will contain PAG CIL residue tailings.
The cyclone sand dams will be constructed over earth fill
starter dams using the centerline construction method with compacted cyclone sand shells and low-permeability glacial till cores. The
Saddle and Splitter dam cores incorporate geomembranes to limit seepage from the CIL residue tailings. The dams will be progressively
raised over their operating life to an ultimate elevation of 1,068 m.
Seepage from the impoundment will be controlled with low-permeability
zones in the tailings dams and dam foundation treatment. Seepage and runoff from the tailings dams will be collected downstream at seepage
collection dams and pumped back to the TMF. The ponds behind the collection dams will also be used to settle solids eroded by runoff from
the dam and fines from cyclone sand construction drain-down water.
Tailings flows will be initially routed by gravity in slurry
pipelines from the plant to the North Cell and CIL Residue Cell. Energy will be recovered during early years of operation of each cell
from discharge of the tailings into the impoundment. Tailings will be pumped to the CIL Residue and South Cell when required during later
stages of the operation.
Tailings will be retained by four cyclone sand tailings dams:
the North Dam, Splitter Dam, Saddle Dam, and Southeast Dam. During operation, elevations of annual dam crest raises will be set to provide
12 months of tailings storage and to store the PMF plus 1 m of freeboard.
Figure 18.5 illustrates the staging of the TMF. The
North Cell will be constructed first and will store flotation tailings production for the first half of the LOM production plan. During
operation of the North Cell, floods will be routed south. A pipeline and surface channel will divert environmental maintenance flows of
up to 2 m3/s from the East Catchment around the TMF into Teigen Creek. After the North Cell has been filled and closed
it will be reclaimed over a five-year period. The CIL Residue Cell will be constructed and operated in parallel with the North Cell, and
in the first stage, will be filled to about half its capacity with PAG CIL residue tailings. Halfway through the LOM production plan,
the South Cell goes into operation, providing flotation tailings storage for the remaining mine life. During this time, the East Catchment
Tunnel will route East Catchment flood flows away from the South Cell. The CIL Residue Cell will be filled to ultimate capacity. The South
Cell and CIL Residue Cell will then be closed and reclaimed over a five-year period.
Based on the mill ramp-up schedule, and assumed in-situ density
ranges possible at start up (starting with an initial 1.0 t/m3 ramping up to 1.3 t/m3 by end Year 2), the starter
dams can store about 18 months of tailings. The earth fill starter dams at the North, Splitter and Saddle dam sites will be constructed
to store a minimum of 8.4 Mm3 of water for mill start-up. The design operating PMF ranges from 42 Mm3
at start-up to 91 Mm3 at the ultimate dam elevation. The dams will then be raised annually by cycloning tailings sand. The
beach will be built up to separate the reclaim pond from the dams by at least 700 m, increasing to 1,200 m at the ultimate dam
elevation. The separation between the tailings dam and pond created by the beach increases the margin of safety against overtopping of
the tailings dam, and reduces seepage through the tailings dam and underlying foundation.
The South Starter Dam, at elevation 930 m, will be completed
half way through the LOM production plan to allow deposition to begin in the South Cell.
Note: Raising of cyclone dams within each stage is not shown
on these diagrams.
Over an initial four-year construction period, three earth
fill starter dams will be constructed at the North Cell and CIL Residue Cell (North, Splitter and Saddle) to provide start-up flotation
and CIL residue tailings storage. Halfway through mine life the Southeast starter dam will be required to form the South Cell. These dams
will be progressively raised over their operating life to an ultimate elevation, providing storage capacity of 2.29 Bt. A summary
of the tailings dams is provided in Table 18.5.
Starter dams will be earth fill embankments, with shells
of compacted random fill supporting the central glacial till cores. The glacial till cores will be keyed into the underlying foundations
to cut off seepage through weathered near-surface soils and any pervious strata. A blanket drain is provided to lower the phreatic levels
in the downstream shell. Riprap erosion protection will not be placed on the upstream slope due to the temporary exposure of the dam to
the pond water. Figure 18.6, Figure 18.7 and Figure 18.8 show typical sections of the starter dams.
The North, Splitter, Saddle, and Southeast dams will be compacted
cyclone sand dams with glacial till cores constructed by the centerline method. Dimensions of the dams are summarized in Table 18.5.
Details of the North, Splitter, Saddle, and Southeast dam designs are shown in Figure 18.6, Figure 18.7, and Figure 18.8.
A system of finger drains will be installed at the base of
the downstream shells of the North, Saddle and Southeast dams to keep water levels in the dam depressed. Main drains in the centre of
the valley floor will collect and convey seepage to the toe of the dam. Smaller secondary drains will convey water laterally into the
main drains.
Table 18.5 summarizes fill requirements for the dams.
For construction of the starter dams, general fill and core material will be excavated by a contractor fleet from local borrow sources
that were identified at each dam site. The cyclone sand TMF dams will be raised using a fleet of dedicated mine equipment.
Seepage recovery dams will be constructed of compacted glacial
till in a similar manner as for the tailings starter dams, but with flatter 3H:1V upstream and downstream slopes.
Figure 18.9 shows the schematic water balance with water
inputs and outputs from the impoundment.
Two main diversion channels, the Northeast Diversion and
the South Diversion, will be constructed around the TMF North Cell with additional diversions around the Treaty OPC to divert non-contact
runoff water into a tributary of Teigen Creek at the north end of the TMF.
Diversion channels are shown on Figure 18.2.
The TMF cells are designed to be able to store extreme flood
events without discharge. Specifically, the PMF can be stored, which is a flood resulting from a 30-day Probable Maximum Precipitation
(PMP) storm, combined with a 100-year 30-day snow melt. The perimeter diversions are assumed to be inoperative during this extreme flood
event.
During operations, water will be reclaimed from the ponds
and routed back to the Treaty OPC, where it will be treated as part of the mineral separation process. Surplus water from the TMF will
be discharged seasonally via the Treaty Creek Diffuser. Discharge will occur during an approximate period extending from May to mid-November,
when the creek flows are highest.
A number of tunnels will be excavated during both the pre-production
period and the operating periods. These tunnels are classified as either infrastructure tunnels or water tunnels. Table 18.6 summarizes
tunnels constructed in pre-production and Table 18.7 summarizes tunnels constructed in the operational phase.
The infrastructure tunnels provide for the transportation
of ore, personnel, and supplies between the Mitchell Valley mining area and the Treaty OPC. The principal infrastructure tunnel is the
MTT, which transports all mined ore from the Mitchell OPC to the Treaty OPC, and personnel and freight between the PTMA and the Mine Site
via the train system. The MTT also includes electric power cables to service the Mitchell mining area.
The water tunnels include the diversion tunnels in Mitchell
Valley for surface water management and the pit slope drainage tunnels for the Mitchell north high wall. At PTMA, in the later stages
of TMF operations (after Year 17) a diversion tunnel is required to divert East Catchment flows once the South Cell is in operation.
This section includes a description of the construction method,
sequencing, and cost basis for the tunnels as applied to the PFS schedule and capital estimate. The MTT design cross-section has been
modified since the EA to accommodate the change to train haulage from the previous ore conveyor system and for the 2022 PFS the cross-section
for the tunnels has been increased to accommodate a revised development fleet using 60 t low-profile haul trucks, rather than the
previously planned rail based development haulage. This will speed up the development rate. The alignment remains essentially the same
as previous studies with minor modifications to the portal locations and arrangements.
The quantities below in Table 18.6 and Table 18.7
are based on revised tunnel lengths and cross sectional areas by SRK, KCB, and MMTS. For MTT related excavations, SRK provided information
for the twin haulage tunnels (SRK, 2022) and MMTS added quantities for the other excavations included in the MTT system based on previous
studies. For the water tunnels, quantities are based on KCB’s updated designs. (KCB, 2022b)
| |
Table 18.6 | KSM Pre-Production Tunnels Summary |
| Tunnel |
Description |
Total
Length |
Excavation
Volume |
Lining
Volume |
| |
|
(m) |
(m3) |
(m3) |
| Infrastructure Tunnels - MTT |
| Principal Alignment |
Twin Tunnels |
43,737 |
1,338,352 |
|
| |
Saddle Declines |
708 |
21,665 |
|
| |
Ancillaries |
15,933 |
487,550 |
|
| Treaty Ore Handling |
Conveyor Discharge Tunnel |
514 |
30,000 |
|
| |
Bulk Excavation |
|
12,650 |
|
| |
Cross-Tracks (Cross-Overs) |
1,161 |
35,527 |
|
| |
Mitchell Ore Handling |
704 |
16,960 |
|
| |
Bulk Excavation |
|
22,057 |
|
| Infra. Tunnels Total: |
|
62,757 |
1,964,761 |
0 |
| Water Tunnels – MDT, MTDT, CDT and SCT |
| MDT |
Diversion Tunnel Inlets & other tunnels |
2,295 |
59,934 |
|
| |
Construction Access Tunnels Decline |
1,830 |
45,750 |
|
| |
Main Diversion Tunnels |
6,570 |
145,854 |
|
| MDT Subtotal: |
|
10,695 |
251,538 |
0 |
| MTDT |
Access Tunnel |
210 |
3,780 |
32,370 |
| |
Main Tunnel |
3,730 |
134,280 |
33,190 |
| MTDT Subtotal: |
|
3,940 |
138,060 |
65,560 |
| Other Water Tunnels: |
|
|
|
|
| CDT at WSD |
Construction Diversion Tunnel |
900 |
18,360 |
|
| SCT at WSD |
Seepage Collection Tunnels |
1,780 |
19,402 |
|
| Water Tunnels Total: |
|
17,315 |
427,360 |
65,560 |
| |
| Pre-production Tunnels Total: |
80,072 |
2,392,121 |
65,560 |
| Note: | Tunnel volumes are based on construction volumes and account for drill hole “look out” contractor tolerance where indicated
includes concrete lining. |
| Source: | Based on SRK (MTT haulage tunnels), MMTS (other MTT excavations) & KCB (water tunnels) and re-configured for costing. |
| Seabridge Gold Inc. | 18-29 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| |
Table 18.7 | KSM Operational Phase Tunnels Summary |
| Tunnel |
Total
Length |
Excavation
Volume |
Lining
Volume |
| |
(m) |
(m3) |
(m3) |
| NPWDA |
3,770 |
89,855 |
5,100 |
| MVDT and MVDT/NPWDA Decline |
4,000 |
131,240 |
2,560 |
| East Catchment Tunnel at TMF |
4,000 |
67,733 |
0 |
| Operation Phase Tunnels Total |
11,770 |
288,828 |
7,660 |
| Note: | Tunnel volumes are based on construction volumes and account for drill hole “look out” contractor tolerance where indicated
includes concrete lining. |
| Source: | Based on KCB (water tunnels) and re-configured for costing. |
| 18.3.1 | Mitchell-Treaty Tunnels |
The MTT is required to accommodate the ore transport system,
which is an electric rail-based twinned haulage system to handle all ore from the Mitchell mining areas to the Treaty OPC (see Figure 18.10)
It also handles personnel transport, supplies, and services between the two operating areas. Personnel transport includes mine side shift
exchange as well as daily personnel interchange. Supplies and services include rail-based fuel tanks, explosives, mine operating supplies,
maintenance parts and supplies, and electric power cables. Any oversized cargo during operations will be brought to the mine area via
CCAR.
The Mitchell-Teigen Tunnel Reserve 1006527 crosses Tudor
Gold Corp.’s Treaty project mineral claims immediately northeast of KSM. Tudor Gold owns a 60% interest in the claims. In March
2021, Tudor Gold published the first resource estimate for the project. Seabridge and Tudor Gold are actively discussing a cooperative
agreement towards mutually beneficial development of both properties.
| Seabridge Gold Inc. | 18-30 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| |
Figure 18.10 | MTT General Location and Alignment |
Source: SRK TER, 2022
MTT Design
Primary crushing of ore from the Mitchell OPC will produce
material that will be transported through the MTT to the crushed ore stockpile located at the Treaty OPC, approximately 22 km to
the east.
The twinned tunnel configuration provides higher capacity
with the haulage loop and rail cross-overs allow sections of the tunnel to be isolated for periodic tunnel maintenance. Under normal operations,
the North Tunnel will be designated for westbound travel and the South Tunnel will be designated for eastbound travel.
The MTT will comprise the following excavations:
| ● | twin tunnels, each approximately 21,900 m in length with seventy-three 30 m long cross-cuts, linking the two tunnels. Half of
the cross-cuts will be equipped with refuge stations |
| ● | nine 210 m long track cross-overs to allow for flexibility and tunnel maintenance during operations |
| ● | two Saddle declines of length 305 m and 367 m, driven at a -15% gradient, will be used for ventilation and materials handling, respectively. |
| Seabridge Gold Inc. | 18-31 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| ● | other excavations include electrical substations to be located in the South Tunnel, sumps, remuck bays, truck loading bays, cover
drilling bays and cut-outs for electrical starters. |
MTT Tunnel Support and Advance Rates
The length of the tunnel has been broken into six general
ground support classes to account for the different rock types and structures to be encountered in the tunnels, based on field investigations
comprising mapping, drilling, and testing. These support class segments are accounted for the tunnel advance rates, and costs per meter
for costing and scheduling.
MTT Mining Method
The tunnels will be constructed in accordance with BC Mines
Act and Health, Safety and Reclamation Code for Mines in BC using conventional drill and blast techniques and will follow the conditions
contained within the License of Occupation for the MTT issued in September 2014 by the Government of BC.
The MTT will be excavated by a contractor using conventional
drill and blast with haulage to the portals via 60 t low-profile diesel-operating trucks. Face jumbos and rock bolting jumbos will be
electric-hydraulic, therefore reducing ventilation requirements. Excavated rock will be temporarily stored at the portals in managed facilities
and relocated to permanent rock disposal sites when the permanent waste management plan is in operation.
At the end of the MTT excavation, contractors will lay the
track and install the electrical supply and distribution system for the trains.
Water Management
Both MTT tunnels will be driven with a ditch in the lower
corner for the collection of tunnel water during the operations period. The nominal grade of the MTT is 1.46% down from the Treaty portals
to the Mitchell portals; therefore, in operation the water in the tunnels will flow to the Mitchell portal where it will be routed to
the WSF.
During construction, tunnel water will be collected and
treated by TWTPs located near the portals.
MTT Mining Sequence
The MTT is on the construction critical path and has therefore
been broken into two segments to allow for concurrent development workplaces resulting in a shorter total tunnel construction period.
This preliminary sequence will be accomplished using the Saddle Declines, which are located in the Saddle area (See Figure 18.10).
This is a transverse valley along the tunnel alignment, located approximately 5.3 km from the Treaty Portal of the MTT and 16.6 km
from the Mitchell portal. Two declines will be driven at a negative grade from the Saddle and will access each of the north and south
MTT tunnels. They will allow the Mitchell-Saddle segment of the MTT to be driven from two headings from either end of the segment, with
four independent crews at one time. Additionally, two crews will be advancing the Treaty-Saddle segments from the Treaty portals, one
in the North Tunnel and one in the South Tunnel.
| Seabridge Gold Inc. | 18-32 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
Crews from the shorter Saddle-Treaty segment of the MTT will
finish early and will then be used to develop some of the other excavations that do not interfere with the advance of the primary excavations.
The North and South tunnels will advance together both from
the Mitchell and Saddle headings. As the twin headings advance, cross-cuts will be developed every 300 m joining the two tunnels.
The cross-cut closest to the face will be used for remucking, the next closest cross-cut will be used for the ventilation cross-over and
the cross-cut before that will be equipped with a refuge station.
Ventilation During
Construction
Since there are three sets of two headings advancing at one
time, there will be three primary ventilation circuits. The primary circuit will be established by installing two fans in a bulkhead just
inside the portal in the South Tunnel (and near the entrance to the Saddle adits), to provide fresh air under positive pressure through
the South Tunnel, and through the ventilation cross-cut with exhaust out the North Tunnel.
The secondary circuits will be established to intercept fresh
air from the primary circuits in order to ventilate the advancing faces. This will be done by two auxiliary fans with flexible vent ducting
installed in the South Tunnel on the fresh air side of the active ventilation cross-cut and blowing air to the advancing headings in each
of the South and North tunnels. The air from the South Tunnel will exhaust via the ventilation cross-cut where it will meet with the exhaust
air from the North Tunnel. This exhaust air stream will then flow out the portal. As the tunnel faces advance, a new remuck cross-cut
will be established and the previous remuck cross-cut will now act as the new ventilation cross-cut. The previous ventilation cross-cut
will be sealed and equipped with the advancing refuge station.
Ventilation During
Operations
During normal operations air will be moved through the tunnel
by the piston effect created by the movement of the trains. Thus, ventilation in the North Tunnel will generally be from east to west
and ventilation in the South Tunnel will generally be from west to east.
To allow for segments of the MTT to be isolated for maintenance,
sets of ventilation doors with axial vane fans will be installed at the portals and at the track crossovers. In this way, fresh air will
be supplied to the isolated sections of track where the crews will be working. Energizing or de-energizing of fans will be coordinated
with train traffic so that the fans will not move air against each other or against closed vent doors.
| 18.4 | Mine To Mill Ore Transport System |
At the Mitchell OPC, ore will be crushed and conveyed through
a tunnel to two live underground bins within the MTT. Loading chutes under the bins will feed into trains that will transport the ore
to an unloading station at the Treaty end of the MTT. The train cars will dump into a live underground unloading bin. Apron feeders will
unload the bin onto a conveyor to transport the ore to the top of the Treaty COS.
| Seabridge Gold Inc. | 18-33 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
The ore transport is configured to start operations at a
nominal production rate of 130,000 tpd and ramps up to 195,000 tpd for the start of Year 3. Each ore train Consist can carry approximately
1,600 tonnes per trip. Based on 20 hours per day and 350 days per year specifications for the two production rates are:
Ore Production Trains in operation at 130,000 t/d
| ● | Six trains, each consists of two 140 t Schalke Locomotives c/w 18 NMT 42m3 Bottom Discharge Wagons per consist. |
Ore Production Trains in operation at 195,000 t/d
| ● | Nine trains, each consists of two 140 t Schalke Locomotives c/w 18 NMT 42m3 Bottom Discharge Wagons per consist. |
Note: Two additional Consists have been included in Year
1 to account for reduced availability and as spare capacity to catch up production when required.
Speeds vary slightly for the different production levels
due to traffic requirements from modelling.
Unloaded trains will be able to travel downwards with a speed
up to 50 km/h. All traction motors are then operated in regenerative mode, feeding back approx. 870 kW (1.26% gradient) and 1580 kW (2.04%
gradient) of power into the grid.
The transport system capacity has been confirmed at PFS
level by simulation of the system using desktop simulation to define the train requirements.
The static modelling of the rail system has been carried
out based on all trains travelling to the most remote part of the rail transport system. In practice, the average distance travelled by
the trains will be substantially less than the distance to the furthest chute. Accordingly, the capacity of the system has been underestimated,
providing some contingency for congestion and unplanned delays. There is room for refinement in future studies.
The trains will travel on a conventional ballasted track
structure with treated timber ties and operate via an electrical overhead conductor rail system. Trains will be controlled by an automated
train control system managed from a remote control room. Loading chutes will also be controlled remotely and unloading chutes will operate
autonomously. Future developments in technology may enable full automation. No onboard operators will be required within the tunnels during
train system operation.
| Seabridge Gold Inc. | 18-34 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
Figure 18.11 shows a schematic plan view of the approximately
21.9 km long MTT dual track transport system. The South Tunnel will be primarily utilized for loaded trains travelling to Treaty
OPC, and the North Tunnel will be utilized for empty trains travelling back to Mitchell OPC. The tunnels will run uphill from Mitchell
OPC to Treaty OPC at an overall 1.46 % incline, such that tunnel drainage will flow to the Mine Site. Cross-overs are planned at both
end points of the tunnel, as well as in two intermediate points to split the route into three sections. One section of the tunnel can
be isolated when maintenance is required, and one-way traffic can be implemented and safely controlled by the train automation system.
A simulation verified that these traffic flow restrictions will not compromise average daily train production requirements. The chainage
to the cross-overs will be determined during construction when in-situ conditions from tunneling activities and probe drilling indicate
suitable locations for crossover intersections with the main tunnels without compromising the required traffic flow from the simulation.
| Figure 18.11 | MTT Dual Track Plan View |
Source: MMTS, 2022
Figure 18.12 shows a typical cross-section used for
both of the MTT tunnels. The inner profile indicates the minimum dimensions for the operating trains. The outer profile indicates the
larger dimension to facilitate the specified tunnel development equipment. The tunnel costs and productivities are based on the larger
profile.
| Seabridge Gold Inc. | 18-35 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| Figure 18.12 | MMT Cross Section (Typical) |
Source: SRK, 2022
Due to the 2.04% incline from Saddle to Treaty, two locomotives
are required per train since a tractive effort of approx. 550kN necessary. The two locomotives combined require 4,800 kW of power at the
wheels to maintain speeds between 45 km/h (1.26% gradient) and 38 km/h (2.04% gradient) while going uphill.
The current consumption of each locomotive is depending on
the voltage level of the conduction rail system and the operating speed of the locomotives. Operating the loaded trains uphill with a
maximum speed of 38 km/h on the 2.04% gradient will require a current draw of approximately 3,500 A for both locomotives on the train
from the conduction rail at an operational voltage level of 1,500 V DC.
The locomotives, as well as the loading and unloading chutes,
will carry their own fire suppression systems, and will not require a fixed system within the tunnel.
| Seabridge Gold Inc. | 18-36 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
An automated train dispatching system will be utilized to
achieve a safe and efficient flow of trains through the tunnels. This will be located at the IROC to coordinate ore flow from the mine
to the mill.
As shown in Figure 18.13, two parallel underground spur
lines coming off the main tunnel will be used for loading ore at the Mitchell end of the MTT.
Trains will be continuously loaded at the Mitchell OPC without
the need to stop between cars. Each 42 m3 car can be loaded in an average of 36 seconds. The mine ore cars adopted for
this PFS are bottom discharge with an overlapping apron between the cars.
Mine ore cars will unload into the surge bin centrally under
the unloading station. From the bottom of the bin, ore will discharge into two apron feeders and onto a conveyor belt that will transport
the ore to the surface and feed to the Treaty COS.
| 18.4.1 | MTT Freight and Personnel Transport |
The train system will also be used for transportation of
personnel and freight between the Treaty and Mitchell areas via the MTT. Freight and personnel transport will be scheduled on a daily
basis, and the transport trains will be controlled by the automated train control system.
Specially configured personnel and freight trains will transport
personnel, freight, and fuel through the MTT, with marshalling and unloading areas at each end, separate from the ongoing ore transportation
facilities. Personnel, freight, and fuel handling will only be scheduled during the day shift operations.
The train control system will ensure there is no haulage
of fuel or explosives when personnel are being transported in the tunnels. In the event of an emergency, the personnel cars will be equipped
with personal protective equipment (PPE) kits including self-rescuers. The twin tunnel configuration and cross-cuts provide alternate
egress and rescue stations will be installed through the length of the MTT.
Treaty Staging
Areas
Staging areas on surface near the Treaty Portal will be used
to load personnel, freight, and fuel onto the specialty train cars. These staging areas will be road accessible and include a laydown
area for all freight that is for transport through the MTT.
The personnel marshalling will be out of the South Tunnel
and will include a structure to protect waiting passengers from the elements.
A train maintenance shop will be located in the freight marshalling
area that will include workshop facilities, fuel storage and a control room for train system operations (see Figure 18.13).
| Seabridge Gold Inc. | 18-37 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| Figure 18.13 | Treaty Personnel, Freight, and Fuel Staging and Marshalling |
Source: Tetra Tech, 2022 (Train Facility Design by NMT)
Mitchell Staging
Areas
Three separate, enclosed, underground staging areas near
the Mitchell portal will be used to offload passengers, freight, and fuel, respectively (shown in Figure 18.14). Loaded fuel tanks
and other hazardous freight will be shuttled out of the tunnel as soon as possible. Personnel will exit the Mitchell portal by bus or
other light vehicles.
Freight and fuel staging areas will include gantry cranes
to offload the train payloads onto awaiting flatbed tractor-trailer units. Freight will be driven out to its ultimate destination at the
Mine Site.
| Seabridge Gold Inc. | 18-38 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| Figure 18.14 | Mitchell Personnel, Freight, and Fuel Staging and Marshalling |
Source: MMTS
Currently, the KSM Site can only be accessed by helicopter.
Helicopter support will augment the road pioneering work and construction camps set up. Avalanche mitigation will be constructed where
appropriate so that work can be safely carried out in Mitchell Valley.
The Mine Site roads after initial construction and pre-production
are shown in Figure 18.1. Figure 18.3 shows the Mine Site roads at the end of LOM.
Site road widths were designed to comply with the following
BC Mines Regulations:
| ● | for dual lane traffic, a travel width of not less than three times the width of the widest haul vehicle used on the road |
| ● | for single lane traffic, a travel width of not less than two times the width of the widest haul vehicle used on the road |
| Seabridge Gold Inc. | 18-39 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| ● | a berm height of at least three-quarters the height of the largest tire on any vehicle hauling along the road, where a drop-off of
greater than 3 m exists. |
Ditches are included within the travel width allowance.
Ancillary building construction considered for the PFS will
be pre-engineered, stick-built, or modular structures, as applicable. The HVAC for these buildings will be designed to industrial standards.
The following ancillary buildings and infrastructure are included in the PFS:
| q | fuel distribution station |
| q | assay and metallurgical laboratories |
| q | warehouse and maintenance building |
| q | concentrate storage/load-out building |
| q | cold storage/reagent storage building |
| q | ore train storage yard, maintenance shop and loading/unloading facilities |
| q | permanent operations camp |
| q | potable water treatment plant |
| q | substation and auxiliary power supply facilities |
| q | construction laydown areas |
| q | pre-construction fuel storage |
| ● | EPCM and contractors’ offices, concrete batch plant, temporary construction camps, TWTPs, and numerous other construction related
facilities |
| ● | Mitchell OPC and lower Mine Site areas: |
| q | truck shop including first aid facilities |
| q | HDS WTP with sludge storage facilities |
| q | Selenium WTP (operational by Year 5) |
| q | diesel fuel storage and dispensing |
| q | permanent operations camp |
| q | temporary construction camps |
| Seabridge Gold Inc. | 18-40 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| q | new concentrate storage and loadout at the Stewart port facility. |
Fuel Storage and
Distribution (Permanent and Construction)
The main fuel storage tanks at the Treaty OPC are sized to
store 1,300,000 L, which accounts for 6 days of fuel demand. All fuel storage areas will be lined with containment berms and approved
double-wall type tanks. Additional fuel stations will be located near the Mitchell OPC, truck shop, and at the Sulphurets pit. Gasoline
will also be similarly stored where required.
The majority of the fuel requirement is for mining activities
at Mitchell; however, some fuel will be distributed to all Treaty OPC facilities via pipelines from the Treaty Fuel Storage Tank to the
required facilities.
A pipeline from the Treaty fuel storage tank to the train
marshalling area will be installed, with hook-ups for fast fuel transfer directly to the ISO fuel tanks at the marshalling area. Wherever
possible, the ISO fuel tanks will not be removed from the train cars on the Treaty end.
Administration
Building
The pre-engineered administration building will be approximately
1,000 m2 in plan area.
Assay, Metallurgical,
Acid-base Accounting, and Geotechnical Laboratory
The pre-engineered laboratory will be an 815 m2
single-storey structure located in a separate building near the process plant at the Treaty OPC.
First Aid Buildings
The first aid buildings will be pre-engineered structures,
located at both the Mine Site and Treaty OPC, equipped with first aid facilities and provide emergency vehicle storage.
Concentrate Storage
The on-site concentrate storage facility will be a pre-engineered
structure, approximately 2,000 m2 in area. It will have a five-day storage capacity equating to approximately 4,600 t
of concentrate.
Cold Storage/Reagent
Storage Building
The cold storage/reagent storage building will be located
at the Treaty OPC and will be approximately 1,200 m2 in area.
Permanent Camp
The Treaty operations camp will be located at the PTMA, approximately
600 m southwest from the process plant. The camp components will include accommodation, office/recreation complex, kitchen/diner, parking,
sanitary sewer, potable water treatment and wastewater treatment.
| Seabridge Gold Inc. | 18-41 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
Warehouse and Maintenance
Building
An 800 m2 warehouse and maintenance pre-engineered
building will be constructed at the Treaty OPC. It will be located adjacent to the cold storage facility.
Truck Shop
The Mine Site truck shop will be a pre-engineered building,
approximately 9,500 m2 in area. The truck shop/mine dry will comprise eight maintenance bays, two light vehicle repair bays, a truck
lube bay, a truck wash bay, a welding and machine shop, an electrical and instrument shop, a storage warehouse and a dry area.
Permanent Camp
The Mitchell operations camp will be located between Sulphurets
and Gingras creeks, just north of the CCAR. Like the Treaty operating camp, the Mitchell operating camp is planned to be used for most
of the construction period and the entire LOM.
The camp components will include a helipad, sleeping dorms,
parking, fuel storage and loading area, recreation facility, sewage treatment, fire/fresh water tanks, an emergency generator, laundry,
and kitchen/diner.
Landfills
Two landfills are proposed to be permitted and developed,
one for the Mine Site and one for the PTMA.
The Mine Site landfill, which will occupy approximately 6.5 ha,
will be located within the Sulphurets laydown area.
The PTMA landfill, occupying approximately 8.4 ha, will
be located near the Treaty operating camp.
Each landfill will include a land farm. The land farms will
accept contaminated soils from spill clean-ups and leaks, while the landfill will be used to dispose of non-inert, dry industrial, and
forestry waste.
The wastewater treatment system installed at the construction
and operation camps in both Mine Site and PTMA will treat the anticipated maximum daily flow through a variety of processes to meet a
secondary level of treatment as defined in the Municipal Wastewater Regulation (MWR) (BC Reg. 87/2012) of the Environmental Management
Act (2003).
| Seabridge Gold Inc. | 18-42 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
For temporary construction camps off site with occupancy
less than 100, Type 3 effluent quality as defined in the Public Health Act (2008) sewerage guidelines will be applicable to the
sewage requirements for these camps.
| 18.8 | Communications System |
For permanent communications a fibre optic cable will be
installed over the 30 km transmission line from the Treaty OPC to BC Hydro’s TCT substation beside Highway 37 near Treaty Creek.
This fibre cable is required by BC Hydro for line protection and additional fibres have been allocated for communications. Tahltan Communications
(a partnership between Tahltan Nation Development Corporation (TNDC) and CityWest Cable and Telephone Corporation) have a pair of fibres
on the BC Hydro NTL transmission line from Cranberry Junction at Highway 37 north and are installing new fibre along HW 37 from the Telus
fibre along HW 16 near Kitwanga to Cranberry Junction to connect to the NTL fibre. An interconnection at BC Hydro’s TCT substation
will allow communications to the Treaty OPC over the fibre on the 287 kV KSM transmission line. The PFS budget also allows for the cost
of new fibre plowed into the shoulder of HW 37 from Cranberry Junction to Treaty Creek, by Tahltan Communications, to provide dedicated
(dark) fibre to the KSM site as may be required for mine operations in order to support remote tele-remote control and similar functions.
Installation of fibre-optic cable to site will also allow for the installation of dedicated cellular service.
A plant wide fibre optic communication system will be installed
in conjunction with the power distribution system in both the Treaty OPC and the Mine Site. A fibre-optic cable has been included in the
MTT to provide communications between Treaty OPC and the Mine Site.
An ultra-high frequency (UHF) radio system will be used for
mobile communications in both the PTMA and the Mine Site. Base stations and repeaters will be installed as necessary on ground and inside
tunnels.
Treaty OPC wired telephone service will be provided by a
Voice over Internet Protocol (VoIP) system. A local cell phone system is also planned, as is satellite television for the camps.
In addition, uninterruptible power supplies will be used
to provide backup power to communication systems and critical control systems to facilitate orderly shutdown of process equipment and
to back up computers and control systems.
| 18.9 | Fresh and Potable Water Supply |
Fresh and potable water for the Treaty OPC will be supplied
from nearby wells to an elevated storage tank approximately 12 m in diameter and 9 m in height. Fresh water will be used primarily
as:
| ● | fire water for emergencies |
| Seabridge Gold Inc. | 18-43 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| ● | cooling water for mill motors, mill lubrication systems and reagent preparation |
| ● | the potable water supply. |
| 18.10 | Power Supply and Primary Distribution |
Power generation and transmission utilities in BC are regulated
by the British Columbia Utilities Commission (BCUC), acting under the Utilities Commission Act. BC Hydro generates the majority
of power in BC, although there are an increasing number of private Independent Power Producers (IPPs). BC Hydro owns and operates the
major transmission and distribution system in BC and is the electric utility that would serve the KSM Mine via the recently constructed
NTL.
The utility interconnection capital cost for the KSM Mine
is as set out in the facilities agreement, an arrangement approved by the BCUC in January 1991, pursuant to Order G-4-91 that sets out
the rights and obligations of BC Hydro and the customer for construction, ownership, and operation of the facilities necessary for electric
service. As of Q1 of 2022, a facilities agreement is in place with BC Hydro covering the required capital contributions and bonding to
provide Utility construction power. A second Facilities Study and consequent Facilities Agreement for operating power will be finalized
within adequate time limits for BC Hydro to carry out additional system reinforcement to carry the full 245 MW operating load. The associated
costs will be covered by bonding and no further cash contributions are required.
| 18.10.1 | Northwest Transmission Line |
The 344 km long, 287 kV NTL runs from the Skeena
substation near Terrace, BC, to a new substation near Bob Quinn Lake (Figure 18.15). This new BC Hydro transmission line was commissioned
in the summer of 2014 and currently serves the AltaGas Forrest Kerr Hydroelectric Facility and the Red Chris Mine. A tap from this transmission
line will service the KSM Mine.
The previous BC Hydro Tariff Supplement TS37, which was enacted
to recover the cost overrun of the NTL transmission line construction, has been eliminated. Thus, a payment of $254,800,000 to be repaid
over 5 years after start of commercial production is no longer required. This represents a very significant saving in sustaining capital
over previous studies.
| Seabridge Gold Inc. | 18-44 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| Figure 18.15 | NTL Route Map |
Source: BC Hydro
| 18.10.2 | Treaty Creek Switching Station |
BC Hydro is responsible to deliver power from the transmission
system to a customer at the point of interconnection (POI). The customer is responsible to bring power from the POI to their site. For
KSM, the POI will be the Treaty Creek Terminal Station (TCT). The KSM site will take electrical service via a 30 km long, 287 kV
line extension from the Treaty Creek Switching Station, to be located on the NTL adjacent to Highway 37, approximately 18 km south
of Bell 2 Lodge. This installation will also be in the vicinity of the Treaty Creek Access Road junction with Highway 37. Metering will
also be located at this point. The TCT substation will form part of the BC Hydro system and will be constructed, owned, and operated by
BC Hydro. BC Hydro has completed site selection, and is doing basic design engineering and construction has started.
Seabridge previously reimbursed BC Hydro for the cost of
installing transmission line dead end structures when the NTL was constructed, as required to facilitate the connection of the of the
proposed TCT into the grid.
| Seabridge Gold Inc. | 18-45 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
The power supply facility infrastructure currently under
construction includes BC Hydro System Reinforcement and the Basic Transmission Extension, which is the circuit breaker and metering at
the POI. It is not the transmission line to the KSM site. Construction of the TCT substation, as per the BC Hydro Facilities Agreement
now in place, required a direct cash payment from KSM to cover a large part of the cost of the installation that is classified as the
Basic Transmission Extension. This cost is included in the KSM Substantial Start budget. The remaining station cost is classified as System
Reinforcement and is not a capital cost. However, Tariff Supplement No. 6 (TS6) Clause 5 (c) “Offset” requires that the customer
provide bonding for typically up to seven years, such that BC Hydro is assured of receiving enough revenue from the KSM operation to justify
the capital expenditure. Security is required in the form specified in TS 6 Clause 13 and in the amount as per Clause 5(b). The foregoing
bonding and charges are set out under the tariffs and are not negotiable. BC Hydro will return part of the security each year as the offset,
based on power billing, reduces the required bonding. The amount of the bonding is not included under the direct capital cost budget,
but is otherwise accounted for in the PFS economics. An important point to note is that as per the tariffs, the customer must pay the
actual final cost of construction, not the amount estimated by BC Hydro in a Facilities Agreement.
BC Hydro is responsible for obtaining all approvals and permits
for the TCT substation. A formal environmental assessment of TCT under BC’s environmental assessment process for reviewing major
projects was not required.
The Sept. 2018 System Impact Study (SIS) by BC Hydro provides
for a site maximum demand of 245 MW based on 3 power supply queue positions, which were a result of two increases in the mine power supply
based on two updates to the SIS, as the planned KSM size and load grew from the initial submission. As it stands, KSM have 245 MW reserved
for their use. The 245 MW contract demand is not exceeded until Year 3 of production which provides adequate time for an application to
increase the contract demand or install the budgeted combustion turbine.
| 18.10.3 | Transmission Line Extension To KSM |
The voltage selection for the proposed 287 kV transmission
line extension for KSM was based on the 287 kV transmission voltage selected for the NTL. A review of the technical requirements
to serve a load in the range of 245 MW confirmed that stepping the voltage down to a lower level is not technically acceptable nor economic.
The KSM Mine will be responsible for the construction and
operation of the transmission line extension, in accordance with the established BC Hydro tariff requirements. Line construction will
utilize steel monopoles, such that the line can be generally run in the TCAR right-of-way, beside the road, thus largely eliminating the
requirement for a separate access route.
The 287 kV transmission line from the BC Hydro TCT will
cross Highway 37 and the Bell-Irving River, then closely follow TCAR along the north side of Treaty Creek for approximately 12 km
to a deviation point where the line transitions from following the TCAR, to following the South Diversion Cut-off Ditch, up to main substation
FLT1 at the Treaty OPC. Steel monopoles are ideal for use where a transmission line is to be constructed next to a road and in areas of
high snow fall. To protect against avalanche damage, several structures will be mounted on concrete piers, to raise the pole bases above
the avalanche flow (in run-out areas).
| Seabridge Gold Inc. | 18-46 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
The environmental assessment for the 30 km section of
transmission line from TCT to Substation No. 1 was included in the KSM approved EA; therefore, approval is in place. Land tenure (a Licence
of Occupation) has been obtained for the transmission line right-of-way, from the Treaty Creek Switching Station to Substation FLT1 at
the Treaty OPC.
The 287 kV KSM transmission line includes a fibre optic cable
connection to the BC Hydro NTL fibre-optic cable system, as required by the utility for system protection. This fibre connection will
also carry the general communications to site for the permanent operations phase.
The transmission line land tenure has been obtained and clearing
started. The cost of right-of-way clearing is included in the road clearing budget.
The 287 kV transmission line will be constructed as part
of the KSM’s early works and consequently is not in the PFS budget.
BC Hydro performs studies to determine the cost, method,
and timing of transmission system customer interconnections. Seabridge first commissioned a BC Hydro SIS for KSM in 2009 to confirm the
technical viability of the interconnection. Subsequently, several updates were commissioned. The latest system impact study was completed
by BC Hydro in September 2018 for a contract demand of 245 MW. A Facilities Agreement was signed in February, 2022 for the supply of 25
MW of construction power. A planned second Facilities Study will be carried out by BC Hydro to define the costs for the supply of 245MW
for full operations power, as confirmed available by SIS. This study will confirm the system reinforcement bonding required for operations
power. No further capital contributions are anticipated to be required.
System load flow studies have been performed by PFS consultants
using system analysis software to confirm process plant and mine power system voltage control from no load to full load. System voltage
stabilization is based on switched reactors to control light load over voltages due to 287 kV transmission line and 138 kV cable
capacitance, and also assumes power transformers have automatic tap changers and that there is automatic control of the process plant
synchronous ball mill drive motor excitation systems for instantaneous voltage control, as requested by BC Hydro. The mine main substation
(FLT1) also includes automatic power factor correction capacitor banks to maintain unity power factor at TCT, as required by BC Hydro.
BC Hydro will also include a STATCOM (solid state power electronic compensation equipment) in their TCT substation to further stabilize
voltage.
Service from the Skeena Substation to the KSM Site will be
delivered over the existing NTL single-circuit 287 kV transmission line which entered service in 2014. Occasional service interruptions
and planned maintenance outages can be expected and are considered normal for mining projects.
| Seabridge Gold Inc. | 18-47 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| 18.10.5 | Electric Utility Requirements, Tariffs, and Cost of Electric Power |
The electric service to the KSM Site (including all terms
and conditions such as rates and metering requirements, connection charges, and many aspects of the KSM connecting transmission line)
will be in accordance with the latest edition of BC Hydro Electric Tariffs, in particular:
| ● | Rate Schedule 1823 – Transmission Service – Stepped Rate |
| ● | Rate Schedule 1901 – Deferral Account Rate Rider, |
| ● | BC Hydro Electric Tariff Supplement No. 5 (TS5) Agreement for Customers Taking Electricity under 1821 (1821 is now 1823) (TS5 is a
template for the Electricity Supply Agreement with the format set as per the tariffs and is not subject to change) |
| ● | BC Hydro Electric TS6 Agreement for Transmission Service Customers (TS6 is a fill in the blanks template for the Facilities Agreement
with the format set as per the tariffs and is not subject to change) |
| ● | BC Hydro Electric Tariff Supplement No. 74 (TS74) Customer Baseline Load Determination Guidelines. |
BC Hydro Rate Schedule 1823 is a two-tier schedule, nominally
with 90% of the Customer Baseline Load charged at economical Tier 1 energy rates, and the last 10%, plus all power above the Customer
Baseline Load, charged at costly Tier 2 rates. This system is designed to encourage energy conservation, as consumption reductions due
to energy conservation measures are applied against costly Tier 2 power. BC Hydro, under their Power Smart program for demand side load
control, offer incentives to transmission customers to reduce energy consumption, and for new customers incentives are given for energy-efficient
plant design.
The calculated power cost as estimated for the 2022 PFS is
somewhat below regular rates due to a large reduction or elimination of costly Tier 2 energy in accordance with an efficient plant design
as accepted by BC Hydro’s “Power Smart” program based on a study approved by BC Hydro. Thus, HPGR energy savings have
an impact far greater than just the energy savings in the grinding area. A separate report to BC Hydro has confirmed that the use of HPGRs
for KSM qualifies for these incentives.
BC Hydro Tariff Supplement TS6 (as approved by the BC Utilities
Commission) currently requires potentially large non-refundable 500 kV transmission and generation system reinforcement charges for
operations with a Contract Demand of over 150 MVA, if they require reinforcement to the 500 kV system supplying the Skeena Substation,
the power source of the NTL transmission line feeding KSM. The terms covering 500 kV system upgrades could potentially apply to KSM and
the required capital contribution would apply to the entire load as per the wording of the tariffs, not just the load that exceeds 245 MW
The Contract Demand (peak load) for KSM is currently estimated to be above 245 MW after production Year 3, considering the large
load due to trolley assist in the open pit, even considering that energy conservation and recovery measures will be implemented. Seabridge
currently has an approved SIS and an agreement with BC Hydro for electric power supply with a maximum Contract Demand of 245 MW. A combustion
turbine has been allotted for in the estimates after Year 3 due to trolley assist, which will cause the maximum demand to exceed the 245
kW limit.
| Seabridge Gold Inc. | 18-48 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
The cost of power for KSM, delivered to the 25 kV bus
bars of the Treaty OPC, has been estimated as Cdn $0.0596 per kWh, based on rates effective in Q1 of 2022) including applicable taxes
and energy cost savings due to BC Hydro’s Power Smart program. The KSM power cost includes the transmission line losses from the
metering point at the Treaty Creek Switching Station, plus Substations No. 1 and No. 2 transformer losses and peaking power cost.
The KSM power cost calculation takes into account reduced
rates due to BC Hydro Demand Side Management (DSM) and associated Power Smart initiatives for energy conservation measures designed into
new plants (such as using HPGR grinding in lieu of SAG milling). Such measures, as may be certified by BC Hydro, serve to reduce the standard
10% of energy under the two-tier 1823 Rate Schedule that would fall under the costlier Tier 2 category. If HPGR grinding and similar energy
conservation measures were not to be implemented, there would not only be greater energy consumption, but the cost of electric power per
kilowatt hour for the entire KSM operation would increase as high cost Tier 2 energy would supply 10% of the load, based on the current
(2022) BC Hydro rate schedule 1823.
Each year on April 1 (the start of their fiscal year), BC
Hydro sets new rates that are applied in accordance with the tariffs, subject to BCUC approval.
| 18.10.6 | Treaty Plant Main Substation (FLT1) |
The KSM 287 kV step-down Substation FLT1 will be located
at the Treaty OPC and will be constructed and owned by Seabridge in accordance with BC Hydro policy, which is also the most economical
solution. This substation is a critical installation for KSM. The substation equipment has been sized based on the latest PFS load list.
Redundant transformer capacity was included in the design. The substation will be a GIS switchgear design, utilizing 138 kV and 287 kV
gas insulated circuit breakers and bus bars, allowing a compact design contained in a building adjacent to the Treaty process plant. The
circuit breakers will use point-on-wave switching as required by BC Hydro. Connections to transformers will use high-voltage solid dielectric
cables.
The gas insulated substation will include:
| ● | Four transformers, each of the three winding type oil filled 75/100/125 MVA, ONAN/ONAF1/ONAF2 step down power transformers, with
automatic on-line tap changers |
| ● | nine 287 kV GIS circuit breakers |
| ● | eleven 138 kV GIS circuit breakers |
| Seabridge Gold Inc. | 18-49 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| ● | one 287 kV switched reactor for compensation of the incoming 287 kV line, to limit Ferranti effect over voltages |
| ● | four 138 kV switched reactors at the FLT1 end of the 24 km long, 138 kV cable to compensate for cable capacitance,
thus controlling bus voltage |
| ● | 25 kV grounding transformers and resistors. |
The four transformers included in Substation FLT1 will have
FR3, less flammable insulating fluid and will be installed in a concrete building. They will provide redundancy, allowing one transformer
to be out of service at maximum plant load. Shipping restrictions to the site were taken into account when sizing the transformers. The
138 kV tertiary windings will be connected to the 24 km long tunnel cables feeding the Mitchell (open pit mine) area Substation
FLT2.
Substation FLT1 will also include four line-ups of 25 kV
GIS switchgear, including all 25 kV circuit breakers required for power distribution to the process plant and around the Treaty OPC. The
secondary distribution voltage for the Treaty OPC will be 24.9 kV, 3 phase, 3 wire, high resistance grounded.
Substation FLT1 does not include harmonic filters. If these
are required by harmonic generating plant loads as indicated by studies during the detailed plant design, they would be located at the
process plant near the harmonic sources and at the MTT train rectifier stations. As the rail system is now regenerative, local harmonic
filers will most probably be required.
As part of Substantial Start, the gas insulated (GIS) substation
FLT1 building and approximately one third of the electrical equipment is being purchased to provide construction power. The remaining
equipment is included in the PFS budget for purchase, installation, and commissioning prior to production.
Substation FLT1 will be interconnected with Substation FLT2
by two sets of three, 138 kV, single-core, 300 mm2 , stranded copper, cross-linked polyethylene (XLPE) solid dielectric
insulated power cables suspended from the tunnel back in the MTT that will run between the two plant sites. The 300 mm2
(600 kcmils) conductor size quoted is the minimum physical size that vendors typically manufacture at 138 kV (due to the electric
field gradient at the conductor). This is a more than adequate capacity to carry any anticipated load, including allowance
for mine trolley assist, the cable charging current, etc. To limit induced sheath currents, the cable sheaths will be “cross bonded”,
which is the normal design for high-voltage, high-current, single-core cable installations. Adequate (significant) space must be allowed
in one of the train tunnels for these cables.
| 18.10.8 | Mitchell Substation FLT2 |
The 138 to 69 kV - 25 kV Substation FLT2 is also critical
infrastructure for KSM. As an alternative to a standard 138 kV air-insulated outdoor substation, substation FLT2 is planned to be
a GIS installation. This is a very compact design, requiring only a fraction of the space of a conventional air insulated high voltage
substation and allows for the total installation to be included in a reinforced concrete building that provides a high degree of protection
against geo-hazards such as avalanches and eliminates problems due to high snow fall. It also eliminates hazardous high-voltage overhead
lines in the vicinity of the Mitchell OPC and requires much less plant area. The substation includes:
| ● | three 138 - 69 - 25 kV, 55/73/90 MVA ONAN/ONAF1/ONAF2, oil filled power transformers with automatic on-line tap changers (two, 3 phase
units are provided for redundant capacity, with space provided for a third unit to cater to future load growth) |
| Seabridge Gold Inc. | 18-50 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| ● | eleven 138 kV GIS circuit breakers and associated bus work |
| ● | four switched 138 kV reactors to compensate 138 kV cable capacitance and control voltage |
| ● | ten 69 kV GIS circuit breakers connecting to site 69 kV power distribution system to the large pit trolley assist load and the facilities
more remote from Substation FLT2 |
| ● | grounding transformers and resistors |
| ● | three line-ups of 25 kV GIS switchgear for site local power distribution including 25 kV circuit breakers for all local power distribution. |
| 18.10.9 | Site Power Distribution |
Site power distribution in the mine area from Substation
No. 2 will be by 25 kV cables and overhead pole lines locally and by 69 kV overhead pole lines to feed large trolley assist loads at more
distant facilities where modular substations will step the 69 kV down to the local distribution voltage. The relatively long distances
and high initial future pumping and trolley assist loads require 69 kV distribution to transmit the power and limit voltage drop.
Power to the Mitchell open pit itself will be provided by
69 kV feeders and local 25 kV overhead distribution lines. The required pit 25-7.2 kV portable substations (also serving as
pit switch-houses), and trailing cables for the 7.2 kV pit mobile electric shovels and drills, are included in the electrical power budget.
7.2 kV to 600 V portable substations are also included for pit dewatering. Similar installations are included in sustaining capital for
the Sulphurets open pits. The open pit design also includes 69 KV transmission lines, step-down transformers, DC substations and trolley
lines for open pit trolley assist.
Trolley assist for the mine haul trucks has been included
in mine design. This both reduces greenhouse gas emissions and also significantly reduces fuel costs as electric power is being substituted
for diesel fuel. The cost of power for the 2022 PFS is just under 6 cents per kilowatt hour and for fuel switching, BC Hydro has a new
tariff (Rate Schedule 1895 – Transmission Service - Fuel Switching) that offers a reduction in electric power cost of up to 20 percent.
This has recently been applied in BC for a trolley assist project at another mine site. No capital credit for Rate Schedule 1895 has been
assumed in this 2022 PFS. Ninety-eight per cent of the power generated by BC Hydro is from clean, renewable resources, mostly being hydro
power, thus greenhouse gas reduction is very significant when on trolley.
| Seabridge Gold Inc. | 18-51 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
As many large haul trucks are already diesel electric, like
locomotives, rather than mechanical drive, modification by the manufacturers to adapt these trucks for trolley assist is relatively easy
and several major manufacturers have proven solutions in operation, including currently in BC.
The mine plan has different trolley configurations over the
mine life and thus savings will vary from year to year. In addition, the savings will vary to some extent based on the specific equipment
purchased. However, it is fair to say on an 8% ramp there would be a fuel saving of over 95% (as the engine is on idle) and a speed gain
in the range of 90%, depending on truck specifics.
To facilitate the high power demand of trolley assist, in
the range of 35 to 40 MW, power distribution from Mitchell substation FLT2 will be via 69 kV pole lines with unit substations provided
to step the voltage down to 25 kV for local distribution and utilization. The trolley system itself would include DC traction (rectifier)
substations that supply power to the catenary system that consists of the catenary support aerial cables, the contact conductors and parallel
heavy duty aerial feeder cables. The aerial conductors would be supported by steel cantilever cross arms and galvanized steel poles bolted
to precast concrete foundations. The system is designed for relatively rapid installation and with the ability to move and re-use the
lines.
Each truck would be fitted with a pantograph to receive external
DC electric power from the catenary and the necessary power electronics to convert the DC power to variable frequency alternating current
(AC) for the truck wheel motors.
| 18.10.12 | Construction and Standby Power |
Modular diesel generator sets will be provided to supply
construction power for tunnel driving, camps, temporary water treatment plants, plant construction sites, and other initial construction-related
facilities that are not adjacent to main substation FLT1 which will supply construction power from BC Hydro for facilities in the area
of the Treaty OPC. The capital and operating costs of these facilities plus local distribution including step-down transformers and overhead
pole lines have been included in construction indirect costs. Fuel and operating costs for construction power are also accounted for in
the construction indirect costs. The power distribution costs for supply and installation of cable and electric panel boards within the
various tunnels are included in tunnelling costs.
Any additional costs for moving equipment and fuel to site
during the early stages of the KSM construction, such as by helicopter, are included elsewhere in the capital cost estimate and are not
in the construction power budget.
The construction generating stations are modular, complete
with switchgear, and designed for PLC automatic unattended operation. Environmentally approved double-walled fuel storage tanks and associated
piping are included for each power station.
| Seabridge Gold Inc. | 18-52 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
Several of the construction gensets will be retained after
initial construction is complete and reconfigured to serve as future standby/emergency generation for the mine, process plant, and accommodation
centres. The cost to refurbish construction gensets and reconnect this equipment for standby service in the permanent plant was included
in the general site maintenance operating costs.
The estimates include the purchase rather than rental of
construction gensets. The relatively very long KSM construction period will make construction genset rental uneconomic.
| 18.10.13 | Energy Recovery and Self Generation |
There are several opportunities for energy recovery from
process flows, as well as power generation from mini-hydro plants, taking advantage of water flows that must otherwise be diverted around
the mining operations. As these energy recovery and mini hydro schemes, to a large extent, make use of facilities otherwise required for
KSM, they are generally economically attractive based on the current two tier utility rate schedule and will reduce the total energy consumption
of the KSM operation. The value of the generated power would be at the BC Hydro rate schedule 1823 Tier 2 energy (set at BC Hydro’s
marginal cost of generation).
All of the listed energy recovery plants will be located
within the KSM mining lease. The energy recovery plants recover energy from process plant flows.
All of the generating plants, similar to small IPP hydroelectric
plants, will operate unattended and will be automatically controlled by PLC systems. The locally generated power will be fed into the
25 kV mine distribution power lines.
The generation facilities included in this PFS are summarized
in Table 18.8.
| Table 18.8 | Mini Hydro and Energy Recovery Power Generation |
| Name |
Type |
Installed
Capacity
(kW) |
Net Annual
Generation
(kWh) |
Machines |
| WTP* |
Energy Recovery |
9,000 |
19,866,000 |
Pelton Turbines |
| Tailings |
Energy Recovery |
1,194 |
10,414,000 |
Pumps as Turbines |
| McTagg Diversion* |
Mini Hydro |
10,000 |
29,842,000 |
Francis Turbine |
Notes: * Operation continues after mine reclamation.
| Seabridge Gold Inc. | 18-53 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| 18.11 | Treaty OPC and Mine Site Secondary
Electrical Power Distribution and Utilization |
| 18.11.1 | Mine and Plant Power Consumption |
The total initial mine and process plant annual energy consumption
is estimated to be 1,726 GWh based on the (HPGR) load list for the initial 130,000 t/d operation valid on average for Years
1 and 2. This equates to an average annual load of 197 MW. With a load factor (LF) in the range of 0.87 as typical for a large mine such
as KSM, the annual worst month peak load (15-minute demand) is estimated as 226 MW. For Year 1 the peak loads are well below the
245 MW contract demand.
The corresponding figures for Year 3 with a throughput of
195,000 tpd is an annual energy consumption 2,152 GWh, an annual average load of 246 MW, and a maximum peak load of 283 MW.
The required utility supply will be reduced in the summer
and fall by self-generation from energy recovery and mini-hydro plants. During the winter low stream flow conditions, the average self-generation
will be almost zero. To prevent the KSM operational demand from exceeding the 245 MW trigger point for generation reinforcement, a proposed
22 MW peaking combustion turbine, located in at the Treaty OPC, will be operated. In addition, it would be possible to institute demand
control for the large pit trolley assist electrical load. As the mine develops, there is ample opportunity to investigate the cost of
increasing the BC Hydro contract demand to 300 MW. As this additional power would not be required until Year 3 of production.
| 18.11.2 | Power Distribution –
Treaty Plant Main Substation FLT1 |
For a discussion of power distribution refer to Section 18.10.6
Treaty Plant Main Substation FLT1.
Ball Mills
The ball mills as planned were integrated into BC Hydro’s
SIS and any changes to these drives will require a new BC Hydro SIS and potentially a new Facilities study.
The Treaty process plant ball mills are major power consumers.
Each of the four ball mills (rated 14,000 kW each) in Year 1 and 2 additional mills in Year 3, will be fed via dedicated 25 kV
feeders and step-down transformers to 13.8 kV. The mills will each be equipped with two, 10,000 hp, low-speed “Quadratorque”
fixed speed synchronous motors, directly driving mill dual pinions via air clutches, as has been used in the industry for many years.
Step-down to 4.16 kV
The ball mills will be fed at 13.8 kV. Other large fixed
speed motors (generally those rated 250 hp and greater) and large variable speed drives (generally those rated over 400 hp)
will be fed at 24.9 kV or 4,160 V. As the VFDs include integral step-down transformers the larger VFDs will be fed at 25 kV, to save
transformer costs. The 4,160 V supply will be derived from 25 kV to 4,160 V outdoor liquid filled step-down transformers.
Redundancy will be provided by utilizing sets of two transformers, each feeding a 4,160 V metal clad switchgear line-up with the
two line-ups connected by a tie breaker that may be closed if one of the transformers fails or must be taken out of service.
| Seabridge Gold Inc. | 18-54 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
Step-down to 600 V
Motors and other loads below 250 hp will be fed from
one of several 600 V systems. Generally, these systems will consist of FR3 liquid insulated 25 kV to 600 V step-down transformers,
feeding two line-ups of 600 V power distribution centres (with tie breaker), which in turn feed a series of 600 V motor control
centres (MCCs). General power and lighting will also be fed from the 600 V system.
Remote Loads
Remote Treaty OPC loads will be served by 25 kV overhead
lines. Examples of remote loads include, fresh water pumping, the TMF return water and seepage pumps and ancillary buildings.
| 18.11.3 | Mitchell Substation FLT2 |
For a discussion of power distribution refer to Section 18.10.8,
Mitchell Substation FLT2.
Power Feed to Pits,
Trolley Assist and Primary Crusher
The Mitchell primary crusher will be fed from substation
FLT2 by a 25 kV cable. The Mitchell pit 25 kV overhead power line will be fed from a section cable leading into the substation.
The mining electric shovels and drills will be served at
7.2 kV via portable 25 to 7.2 kV step-down substations fed from the perimeter pit pole line. The estimates include appropriate
lengths of trailing cable and couplers. 7.2 kV to 600 V portable step-down substations and trailing cables are also included for pit dewatering.
A 69 kV GIS circuit breaker and cable will feed an overhead
pole line supplying remote loads including the truck shop, WTP, Selenium WTP, WSD pumping, explosives facility, permanent camp, and also
connecting to the mini hydro and energy recovery power plants. There will be local unit substations stepping down from 69 kV to the
local distribution voltage.
Because of the large power demand associated with pit trolley
assist, 69kV distribution lines and 69kV unit substations are included in the trolley assist power supply to step the voltage down to
25kV to supply trolley assist DC substations.
| Seabridge Gold Inc. | 18-55 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| 18.12 | Permanent and Construction Access
Roads |
The Mine Site and PTMA construction will require a combination
of permanent and temporary access roads. Preliminary design work was performed pre-2009 utilizing remote sensing data (LiDAR) and was
ground-truthed between 2009 and 2012. Primary access to the mine during construction will be via the CCAR and TCAR, with a winter access
road being utilized during the initial construction phase. In total, seven roads are proposed with varying design criteria that match
that anticipated traffic volumes generated at the Mine Site and PTMA during construction and operation. A map outlining the proposed roads
is shown in Figure 18.16.
Current proposed permanent access roads include the existing
59 km long resource access route from Highway 37 to the former Eskay Creek Mine and camp facilities. The proposed 33 km
long CCAR will commence near the southern limit of this existing road, and extend south then west to the proposed Mine Site.
The TCAR network provides access to the Treaty OPC, the TMF,
and the MTT Saddle Area. It will include a 30 km two-lane access route from Highway 37 to the Treaty OPC, TMF, and Treaty MTT
portal, and include portions of the TCAR and NTAR.
The current proposed access roads include the:
| ● | Lower NTAR (early mine life) |
| ● | Upper NTAR (early and mid-mine life) |
| ● | Cut-off Ditch Access Road |
| Seabridge Gold Inc. | 18-56 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| Figure 18.16 | Proposed Access Roads Network |
Source: Tetra Tech
| Seabridge Gold Inc. | 18-57 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| 18.12.1 | Route Descriptions |
The current updated route descriptions, including relocations
of the road alignments, are provided in the following sections.
Eskay Creek Mine
Access Route
Seabridge plans to use portions of the existing Eskay Creek
Mine Access Road, linking Highway 37 to the proposed CCAR.
This road was constructed in 1993 to provide access to Homestake
Canada Inc. Eskay Creek Mine. In 2002 the mine was assumed by Barrick Gold Corp. (Barrick) until its closure in 2008. The property is
now under option with Skeena Resources Ltd. The road commences at Highway 37, south of the Bob Quinn Forest Service Road, and follows
the Iskut River Valley west for approximately 38 km to the crossing of Volcano Creek. The road was originally designed as a single
lane, 5 m wide gravel road, with a nominal design speed of 60 km/h. Substantial portions are built to a nominal 8 m wide
(double-lane standard), providing ample passing opportunities.
An overview evaluation of the road condition and its suitability
for Seabridge’s requirements was conducted; findings are summarized in McElhanney (2013).
Coulter Creek Access
Road
The CCAR will be constructed as a single lane (6 m surface),
radio-assisted road with pullouts, and will connect the existing Eskay Mine road to the KSM mine site.
Heading southwest from near the end of the existing Eskay
Creek Mine Access road (approximately 59 km off of Highway 37), this road will follow an existing mine access road for approximately
three or more kilometres towards Tom MacKay Lake. It will then descend out of the alpine meadows, along the height of land between Coulter
Creek and the Unuk River. Construction of the first 8 km of road began in 2021 and is ongoing in 2022. Additional road building to the
Unuk river is under consideration by Seabridge for the 2023-2024 timeframe.
The proposed three-span bridge crossing of the Unuk River
will be 88 m in length. The Unuk River is a major crossing and will need to meet the requirements of the Navigable Waters Protection
Act. Beyond the Unuk River, the route traverses a short section of low-lying wet and swampy areas and then starts to climb steeply
through a series of switchbacks into the Sulphurets Valley and canyon. The alignment extends to the HDS WTP where the CCAR road design
(and Special Use Permit [SUP] boundary) ends. Beyond this point, the road design is determined by the mine development, and is the responsibility
of the open pit mine designer MMTS.
Eskay Mining Corp. owns a large claim block immediately southwest,
west, and northwest of KSM. Parts of the proposed CCAR is situated on mineral tenures held by Eskay Mining. On July 5th, 2021,
Seabridge and Eskay Mining Corp entered into an agreement where both companies will share the costs equally on construction and maintenance
of the first 8km portion of this road.
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| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
Additionally, Skeena Resources owns mineral claims and leases
covering other parts of the CCAR immediately north of Eskay Mining’s exploration project. Skeena owns the previously operating Eskay
Creek gold and silver mine, last operated by Barrick, and is developing new resources elsewhere on its claims. Seabridge and Skeena are
actively discussing a cooperative agreement towards mutually beneficial development of the access road.
Treaty Creek Access
Road (HWY 37 to KM 17.9)
The TCAR will leave Highway 37 approximately 19 km south
of Bell 2, and head west. It will be constructed as a two lane (8 m surface) all-season road to the junction of the Treaty Creek
and North Treaty Upper road at km 17.9.
Meetings were held between McElhanney, Seabridge, and the
provincial Ministry of Transportation and Infrastructure (MOTI) to discuss and establish a set of design criteria for the proposed intersection
at the Highway 37/TCAR location. Construction design work has been completed and the intersections’ construction is fully permitted
by MOTI.
Initially, the TCAR will follow a former forestry access
road. A three-span 119 m long bridge is proposed for the crossing of the Bell-Irving River. This is a major river and will need to
meet the requirements of the Navigable Waters Protection Act. Construction of this bridge began in Q1 2022 and will be commissioned
in Q3 2022. The proposed road follows the north side of the Treaty Creek Valley and construction began in 2022. It will generally be located
between the flatter riparian zone below and the steeper avalanche-prone terrain on the north slope. The TCAR will continue as a double-lane
road further west to a future intersection with NTAR. Heading west from there, the TCAR will transition into a single-lane road leading
to the MTT saddle area.
Treaty Creek Access
Road (KM 17.9 To Tunnel Saddle Access Portal)
Beyond km 17.9 road intersection and heading west up
the Treaty Creek Valley, the TCAR will provide construction period access.
North Treaty Creek
Access Roads
There are currently three permanent access road alignments
proposed within the North Treaty/Teigen Creek valley. They are referred to as the lower NTAR, the upper NTAR, and the Cut-off Ditch Access
Road.
Lower NTAR
Earlier access can be obtained by constructing the lower
NTAR. This will leave the TCAR at approximately km 16.9 and follow the lower valley. The lower NTAR will be quicker to build. It
will result in a slightly shorter travel distance between Highway 37 and the Treaty OPC and TMF, and with generally flatter grades.
This road would be used for approximately the first half of the mine life, until such time as it is necessary to construct the southeast
tailings dam. The primary purpose of the NTAR is to provide early access to the lower valley for the construction of the tailings dam(s).
Eventually, the north section of this road would be buried by the southeast tailings dam.
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| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
Upper NTAR
The upper NTAR will leave the TCAR at approximately km 17.9.
It will traverse approximately 12 km north from the TCAR to the Treaty OPC and TMF. The road would then parallel the proposed drainage
cut-off ditch, which will divert drainage off the west slope of the valley, north to the Teigen Creek Valley.
Cut-off Ditch Access Road
The proposed cut-off ditch access road is to provide construction
and maintenance access only. The power transmission line to the process plant will follow this route.
North Treaty/Teigen TMF Service Roads
Access to the Tailings Management Facility will be provided
by approximately 28.4 km of 6 m wide service roads (with pullouts). These roads will provide access to the east side of the North Treaty
and Teigen Creek valleys, including a water well. The TMF service roads include the following segments:
| ● | South Teigen Road 11 (5.5 km) |
| ● | South Teigen Road 11a (3.15 km) |
| ● | South Teigen Road 12 (9.1 km) |
| ● | South Teigen Road 12a (0.3 km) |
| ● | Upper Dam Road 12b (1.2 km) |
| ● | South Teigen Road 15 (3.7 km) |
| ● | South Teigen Road 15a (2.7 km) |
| ● | Water Well Access Road (2.7 km). |
| 18.12.2 | Road Design Requirements |
The KSM Site access roads are classified as resource development
roads.
The Eskay Creek Mine Road and CCAR will be maintained for
the life of the mine to support the mine development, transport of oversize loads, and to provide alternate emergency access. However,
these roads will only be used seasonally, and not used during winter months.
The CCAR will be a single-lane (6 m surface) radio-assisted
road with turnouts and widenings to allow the largest vehicles and loads access to the Mine Site. The CCAR would have some sections with
sustained maximum grades of 12%. Design speeds vary greatly, in large part controlled by the terrain.
The proposed TCAR to km 17.9, and the connecting upper
and lower NTARs, will be required for permanent access to the Treaty OPC and TMF, and to the Mine Site via the MTT tunnels. These will
be two-lane roads (8 m finished surface), capable of carrying highway legal axle loading year-round. The roads will provide access
for supplies, equipment, and crew transport, and be used for hauling concentrate to Highway 37.
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| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
Alignment controls such as maximum 10% sustained grades (11%
short pitch), and minimum 100+ m radius horizontal curves are utilized for the higher-traffic volumes anticipated on this route.
Appropriate vertical profile crest and sag curve “K” values are applied. Except for a few control sections, the nominal minimum
design speeds for these sections of road is 50 km/h.
All bridges will be designed to BC Forest Service minimum
L100 loading (90,680 kg gross vehicle weight [GVW]) and minimum 1.5 m clearance above the estimated 100-year flood level (Q100).
Select structures must meet additional requirements, as prescribed by the Navigable Waters Act. All bridges, including those on
the TCAR, will be single lane. The exception is the Bell Irving River Bridge that was designed to a L150 loading.
Major culverts have been designed to pass the estimated 100-year
flood level (Q100) with no headwater.
Early Design Work
(Pre-2009)
Utilizing LiDAR survey data acquired in summer 2008 and fall
2011, and the resulting digital elevation models developed, the preferred preliminary access routes identified by Seabridge and McElhanney
were prepared. The preliminary road alignments were subsequently located in the field using GPS, and marked with flagging. The objective
was to locate and map the most appropriate road alignment for each route based on design standards established by the team. Road alignments
and cross sections took into consideration the requirements for both construction and operation phases.
The routes were assessed in the field and adjusted as deemed
appropriate. Often several preliminary lines were investigated in order to achieve the preferred road location. Selecting the ultimate
road locations was an iterative process involving both field and office design. Based on the preliminary layout, terrain information was
gathered, along with bridge and major culvert crossing information. The originally flagged centerline provided a base for follow-up environmental
and geotechnical assessments.
Based on the field reconnaissance, design standards, and
associated surveys and preliminary assessments/input by other sub-consultants; preliminary road design plans and profiles, conceptual
bridge and stream crossing structure designs, and construction cost estimates were prepared. Engineering assessments were conducted in
conjunction with available geotechnical and environmental studies of all proposed routes. The field reconnaissance and bridge site surveys
confirmed the accuracy of the LiDAR data.
Design Work (2009-2012)
From 2009 through 2012, consultants BGC and Rescan (now ERM)
conducted further geotechnical and environmental assessments, respectively, on the proposed, and altered routes. Where appropriate, McElhanney’s
QP at that time accompanied these consultants in the field to make joint determinations with respect to the most appropriate locations
for specific sections of road. McElhanney worked with these consultants to optimize the road locations and designs.
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| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
All proposed final road locations were marked with survey
flagging. Flagging was marked with survey crew and date information (black felt marker), and locations identified by real-time kinematic
(RTK)-GPS survey methods. Select field station references are now indicated on the road plan/profile design drawings for cross reference.
Work included gathering of detailed information to be utilized
in refining the design(s), including soils, vegetation, potential borrow/waste areas, drainage culvert requirements, and other relevant
information. Stream crossing surveys were completed on “smaller” tributaries. Generally, this includes any stream with an
estimated 100-year peak flow of 6.0 m3/s or greater. Details for all such structures were completed to satisfy the requirements
of the BC Ministry of Forests, Lands and Natural Resource Operations (MFLNRO) for the SUP applications. Preliminary stream crossing structure
designs have been completed for all sites requiring bridges or major culverts.
Design Updates
(post-2012)
Additional field work was conducted in 2012 along the proposed
access routes by McElhanney, BGC and ERM. New information was incorporated to optimize the road and structure designs. Horizontal and
vertical alignments were modified to best meet the environmental, geotechnical and archaeological concerns and requirements. During 2012,
work was completed to locate potential borrow and waste sites, at appropriate locations to accommodate road grade construction requirements
along the access corridors. Provision was also made to identify areas of potential gravel sources for road construction and surfacing
materials.
Log landing locations were identified for decking of timber
felled during right-of-way clearing operations. Log landings were located, and spaced, as appropriate for logging/skidding operations.
Timber maturities/volumes, etc. were considered in establishing proposed landing locations.
The proposed right-of-way (clearing) boundaries now defined
on the design drawings are minimum 30 m wide, expanded to include proposed borrow and waste areas, and log landings as described above.
The approved SUP boundary limits extend a minimum of 37.5 m either side of proposed road design centerline (total 75 m width), widened
as required to incorporate additional areas as otherwise defined. The intention is that this will provide some flexibility in adjusting
the design or construction methodology as may be required due to actual field conditions encountered, without requiring multiple amendment
to the SUP during the construction period.
The potential for ML/ acid rock drainage (ARD) has been assessed
for all access road rights-of-way. Additional assessments were conducted in late 2014 for km 0 to 6 of the CCAR which had been flagged
by government agencies as an area of special concern.
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| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
The SUPs for road construction associated with the site access
construction were granted by the Provincial MFLNRO Road Division office on September 27, 2014. There is a requirement to provide a security,
payable to MFLNRO, prior to commencing construction. Payment for SUP S25750 in the amount of $520,000 for CCAR was made in July 2021 and
for SUP S25751 in the amount of $4,300,000 for TCAR in January 2022.
Access road surveys, designs and drawings were prepared in
conformance with standards provided in the then most current version of the BC government Forest Service Engineering Manual (November
29, 2012). Detailed engineering of specific slope stability measures will be subject to review by the geo-technical engineer(s), immediately
in advance of, and during construction activities.
Bridge and major culvert structure site plan surveys, designs
and general arrangement drawings have been prepared in accordance with MFLNRO Road Division requirements and current industry standards.
General arrangement design drawings have been signed and sealed independently by a professional engineer registered to practice in BC.
Detailed structure design details will need to be completed in advance of construction.
During 2021, field survey data was collected for all major
crossings on TCAR, and final design drawings were prepared for TCAR, NTAR and CCAR. Road construction drawings and accompanying specifications
for CCAR were prepared by McElhanney and used in tender and initial construction on the first 8 km portion of road. Additionally, CCAR
construction design was revised from km 2.2 to 5.1 to avoid an overlap with Lease No. 740715 (DL 7325) and approved by the Ministry of
Forest, Lands and Natural Resource Operations and Rural Development in August 2021. Road and bridge construction drawings and accompanying
specifications for TCAR and NTAR were prepared by Allnorth and used in competitive tender for major bridge and road building projects
initiated in 2022.
The KSM Site is currently accessible by helicopter only.
Helicopter support will be used initially to transport equipment, supplies, and personnel prior to completion of the access pioneering
roads to the Mitchell valley and the Treaty plant site.
Once surface routes of TCAR, NTAR and CCAR are established,
construction equipment, materials, personnel and consumables will be imported to various work fronts located across the KSM site through
these routes and dependence on helicopter support will reduce significantly.
Copper concentrate will be transported from the KSM site
by trucks to a deep-water port facility in Stewart, BC, and then loaded onto oceangoing vessels. Two full service ports exist at Stewart,
each with roll-on/roll-off freight handling capacity and either are presently, or would by the time operations begin, be capable of concentrate
storage and handling to ship loading.
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| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
The port is at the head of the Portland Canal, which is a
150 km fjord that is the northernmost ice-free port in North America. The port is accessible via truck on Highway 37A; however, there
is no direct rail service. Concentrates from other northern BC mines are currently shipped from this port. In addition, there is interest
from other operations in the region for concentrate handling services at the port.
For the purposes of this PFS, Tetra Tech calculated that
the copper concentrates will be shipped in bulk, and that the average annual output of copper concentrate for the initial two years, including
ramp-up period in Year 1 and a lower nominal process rate of 130,000 t/d in Year 2, will be 345,000 dmt/a. After completion of process
plant expansion to 195,000 t/d in Year 3, the annual copper concentrate production is expected to increase to approximately 505,000 dmt/a
(Year 3 to Year 10 average).
Molybdenum concentrate will be transported in bags from the
KSM site via trucks to the port of Prince Rupert. The bags will be transferred from the trucks to containers and then delivered to Fairview
Terminal for ultimate loading onto an oceangoing vessel.
It was assumed that the processed molybdenum will be loaded
in 1 t bags for transport purposes, and that the average annual output will be approximately 1,077 dmt/a molybdenum in the first
two years of operation prior to process plant expansion to 195,000 t/d in Year 3. The estimated average annual molybdenum production during
LOM is about 3,854 dmt/a.
| 18.14 | Preliminary Construction Execution
Plan |
The Construction Execution Plan describes how the KSM Mine
could be constructed. It is a plan in the preliminary planning stage and briefly defines the construction elements required to successfully
execute construction management for KSM. It is notable that the mine development approach will be dictated by the majority owner operatory
of KSM when it goes into construction and may deviate from that described herein.
The KSM Mine will require up to six years to construct, depending
on the scope of Early Works completed prior to full development approval based on a Bankable Feasibility Study. The construction scope
is intended to meet the following key objectives:
| ● | deliver an optimized, safe, and environmentally compliant mine development in accordance with the systems and procedures in place |
| ● | perform construction activities safely, striving for zero recordable accidents |
| ● | construction conducted in accordance with the IBA that are in place with the First and Treaty Nations |
| ● | ensure that regulations, license agreements, applicable specifications, and standards are met |
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| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| ● | complete construction within the agreed schedule, not exceeding the budget, and delivering the full scope as described in the construction
authorization. |
An Early Works Plan will be developed to ensure certain key
infrastructure (e.g., construction camps) and support services (e.g., catering) are in place early during construction and functioning
efficiently for a successful construction program. Portions of this early work scope are being executed by KSM starting in 2021.
The following planning and field construction focus areas
must be addressed in the Early Works Plan:
Planning
| ● | permit review and renewal plans |
| ● | staffing, recruiting and labour relations plan, including commitments in accordance with the IBAs that are in place with the First
and Treaty Nations |
| ● | contracting strategy and plan, including commitments in accordance with the IBAs that are in place with the First and Treaty Nations
– vetted and approved by the Owner |
| ● | site access plan – pioneer roads, bridges, followed by completed permanent roads |
| ● | health, safety and security (HS&S) management plan and manual |
| ● | site and camp rules and regulations plan |
| ● | environmental and cultural sensitivity awareness training plan |
| ● | health and hygiene program |
| ● | site safety and security orientation program |
| ● | geohazards and avalanche management plan |
| ● | logistics supply and materials management plan for early material requirements, including helicopter support |
| ● | employee transportation plan for early construction program; air and ground planning required |
| ● | environmental management plan to manage sediment control, waste, spills, fueling, etc. and wildlife management plan for early construction
activities |
| ● | community relations plan |
| ● | quality management system |
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| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| ● | safety and emergency response plans including content related to medical facilities and medical attention, emergency medevac, etc.
Final Level IV resource loaded construction schedule |
| ● | Final development execution plan |
Field Construction
| ● | establish explosive supply storage and controls |
| ● | identifying and proving borrow pits |
| ● | sourcing road materials and aggregates; setting up crushing and screening facilities |
| ● | build pioneering roads along CCAR and TCAR alignments to establish road access to the Mine Site and Treaty OPC |
| ● | establish aggregate plant, aggregate wash plant, batch plant installation and supply of cement and aggregates |
| ● | install asphalt plant and supply of asphalt |
| ● | develop fuel supply and storage locations on site immediately upon achievement of road access build construction camps |
| ● | establish temporary construction power – standalone power supply systems (gensets) in containers with fuel systems; build TWTP
ponds and muck pads, and install TWTP’s where tunnelling is on the critical path (e.g., MTT) |
| 18.14.3 | Construction Scope |
The construction scope outlined in this section, summarizes
the main infrastructure items constructed as permanent facilities or activities required to support permanent constructions within and
surrounding the Mine Site, Mitchell OPC, MTT and PTMA:
| q | upgrades to the existing Eskay Creek Mine Access Road |
| q | CCAR (33 km, permanent access road; begun in 2021) |
| q | Mitchell OPC (primary crushing at a peak of 10,000 t/h) |
| q | WSF (WSD crest built to elevation 716 masl) and ancillary facilities |
| q | HDS WTP with three large clarifiers and sludge storage to initially process up to 3.0 m3/s |
| q | six TWTPs and associated muck piles and treatment ponds |
| q | surface water diversion tunnels (MDT and MTDT) |
| q | power distribution comprising construction gensets, overhead transmission lines, power distribution, and substation |
| q | logging, site clearing and grubbing (overburden, soils stockpiles and large woody debris for future reclamation purposes); rough/finish
grading; structural excavations and fills; foundations; steel erection; architectural, mechanical, electrical and instrumentation works |
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| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| q | Mine Site ancillary buildings and infrastructure such as camps (permanent and temporary), fuel storage yard, sludge storage building,
diversion ditches and bypass pipelines, material handling, temporary truck assembly yard, energy recovery plants |
| q | two 21.9 km long tunnels plus ancillary excavations train system for ore transport that is
capable of delivering 130kt/d of coarse ore to Treaty OPC |
| q | two 15,000 t ore bins and associated transfer conveyor from the Mitchell OPC |
| q | power distribution infrastructure |
| q | train maintenance building |
| q | train loading/unloading facilities |
| q | TCAR (30 km, permanent access road including major bridges) |
| q | TMF (North Dam built to 930 masl, and Splitter and Saddle dams built to 935 masl, with a fully lined and drained basin for
placement of CIL tailing) |
| q | COS and transfer conveyors |
| q | process plant built for 130,000 t/d average throughput, including concentrate storage and load out, select portions of process
plant built out to accommodate Year 3 expansion to 195,000 t/d |
| q | two TWTPs and associated muck piles and treatment ponds |
| q | power distribution comprising construction gensets, overhead transmission lines, power distribution, and substations |
| q | logging; site clearing and grubbing (overburden, soils stockpiles and large woody debris for future reclamation purposes); rough/finish
grading; structural excavations and fills; foundations; steel erection; architectural, mechanical, electrical, and instrumentation works |
| q | PTMA ancillary buildings and infrastructure such as camps (permanent and temporary), cold storage, fuel storage yard, diversion ditches
and pipelines, and material handling |
| ● | Infrastructure (major, both on- and off-site): |
| q | concentrate storage and loading at the Port of Stewart |
| q | switching station at TCAR turn off from Highway 37(by BC Hydro, begun in 2022) |
| q | 287 kV overhead power line from switching station to PTMA |
| q | fibre optics along power line right-of-way and tie-ins |
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| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| q | Highway 37 marshalling yard and Highway 37 turnoff, including site security infrastructure. |
| 18.14.4 | Construction Schedule |
The 2022 PFS construction schedule was compiled in accordance
with the AACE® International (AACE®) recommended scheduling guidelines (level of detail is at Level 2),
with a Class 4 definition. The construction schedule is estimated to be six years and has been designed to accommodate major seasonal
and environmental constraints.
Critical path consists of pioneering roads along the alignments
of the principal access arteries to the construction areas (CCAR and Upper TCAR), MTT, and the train system that will connect the Mine
Site with the PTMA. Prior to completion of the remaining KSM site access pioneering roads on CCAR, helicopter support will be utilized
to support early construction activities at the Mine Site. The strategy is to establish site access pioneer roads as early as possible
to reduce heli-support costs. Upon completion of the access roads to full width, major equipment and materials will be transported to
site via ground freight.
Major site infrastructure such as the WSF and the TMF could
potentially be on the critical path should the MTT tunneling duration be shortened. A preliminary construction schedule has been developed
with a start date for the construction program assumed for mid-Year -6.
Contractors to begin construction on the CCAR and Upper TCAR construction would assume to mobilize for mid-Year -6.
Mine Site pioneering begins with the development of the site
access roads to the major infrastructure pads such as HDS WTP area, WSF, Mitchell OPC, MTT portals, water diversion tunnels, batch plant,
TWTPs, accommodation complexes and powder storage, initially from when CCAR extends into Mitchell Valley. Early works material and equipment
will mobilize to the Mine Site via heavy helicopter lift then general construction materials and heavy earth moving equipment will mobilize
via the CCAR. PTMA construction will utilize the TCAR/NTAR route established in Early works to transport all material and equipment.
The construction duration is estimated at 68 months. The
summary schedule is shown in Figure 18.17.
| Seabridge Gold Inc. | 18-68 | 221062-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| Figure 18.17 | Construction Schedule Summary |
Source: Tetra Tech, 2022
| 18.14.5 | Engineering and Procurement |
Engineering and procurement activity will be managed by teams
of professionals who will report up through the EPCM contractor’s directorate. The Engineering Team will provide the required drawings,
specifications, and documents to the Procurement Team in order to purchase all equipment and materials for the construction, and to allow
field construction of the scope to the design intent. The EPCM contractor’s scope will include process facility and infrastructure
engineering, including managing specialty contractors for major dam and tunnel designs. Mine designs will be developed and delivered by
the Owner’s Team.
The Procurement Team will receive the engineering documentation
and obtain multiple quotations that meet engineering specifications and provide a purchase recommendation to EPCM director. After EPCM
director approval, the Procurement Team will purchase equipment and materials and arrange all logistics to deliver the items to the construction
site ready for installation. The Procurement Team will also be responsible for establishing service contracts for engineering and field
construction services.
Both the Engineering and Procurement teams will be including
commitments in accordance with the IBAs that are in place with the First and Treaty Nations.
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| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
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| 18.14.6 | Construction Management |
The Construction Management Team will be responsible for
the management of all activities related to the construction management scope that includes all construction activity in the mine, process,
and infrastructure areas (on site and off site). Mining activity, environmental monitoring and reporting and community affairs, which
will be the accountability of the Owner’s Team.
The Construction Management Team will oversee the installation
of all materials and equipment according to engineering and manufacturers specifications and build the facilities to satisfy the design
intent and be fully operable. The Construction Management Team is also accountable for construction activity and the construction site
until hand over to the Owner following dry commissioning.
| 18.14.7 | Construction Supervision and
Contractor Management |
The objective of all site construction activities is the
timely and cost-effective completion of the construction facilities in a safe manner to the design intent and required standards in accordance
with schedule. Construction supervision staff, while ensuring that standards are maintained, will provide all oversight management to
contractors in achieving this objective.
The Contracts Management Group, which falls under the responsibilities
of the site procurement manager, will use an integrated data management system to track contractor invoicing, changes, and requests for
information (RFIs). The EPCM contractor will develop a comprehensive set of procedures, in conjunction with and approved by the Owner.
These procedures will outline the requirements for the execution of the administrative activities.
| 18.14.8 | Contracting Packaging and Strategy
Overview |
The preliminary construction strategy includes dividing the
construction into contract packages including commitments in accordance with the IBAs that are in place with the First and Treaty Nations.
During the contractor expression of interest and pre-qualifications phase and during the advancement of detailed engineering, the contract
packages will be combined to reduce the total number of contracts and form a final contracting strategy for the construction.
| 18.14.9 | Site Organization Structure |
A proposed EPCM site organization structure has been developed
to provide a balanced combination of senior managers, area managers, engineers, superintendents, and discipline specialists, to provide
the Owner and contractors continuous support during the installation period. A high-level organizational chart is provided in Figure 18.18.
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| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| Figure 18.18 | EPCM Organizational Chart |
Source: Tetra Tech
The site organization and staffing plan has been designed
by work type (e.g., engineering vs. cost controls) with the geographical constraints of a large construction site incorporated.
Each of the two major construction sites will have a dedicated
health and safety manager and multiple health and safety representatives to assist contractors with the daily issues and training requirements.
| 18.14.10 | Environmental and Community
Affairs |
Environmental and community affairs during construction will
be managed exclusively by the Owner’s Team to maintain independency from the EPCM Team. Environmental knowledge and community relationships
have been developed through historical activity at the construction site and these relationships must continue to be managed appropriately
in the context of regulatory permits granted and the societal expectations that have been expressed to the Owner’s Team. These activities
will continue to be of paramount importance to the Owner well beyond the construction period, thus are best addressed by the mine owning
entity that will have presence throughout the mine life.
A cultural awareness training program will identify and provide
an overview of the various Indigenous groups who have an interest in the development, focusing on their rights as it pertains to their
traditional use of the natural resources of the area. Contractual obligations negotiated between the Owner and the various groups as components
of Impact Benefit Agreements will also be reviewed at a very high level.
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| 18.14.11 | Pre-commissioning/Commissioning |
The commissioning period starts in any specific work area
after all materials and equipment have been installed to design specification and the EPCM contractor certifies installation complete
and hands the area over to the commissioning team. For the purposes of this PFS update, commissioning starts after equipment or material
installation for a system or work area is complete and ends when ore starts to be processed to yield a revenue stream (i.e. the battery
limit between Year -1 and Year 1). In this PFS the EPCM contractor’s scope includes commissioning through dry commissioning when work
areas are handed over to the Owner’s commissioning team. The Owner’s commissioning team executes wet and process commissioning with select
operating staff and professionals that are separate in reporting line and accountability from the operations staff. When these phases
of commissioning are complete, they will be handed over to Owner’s operations staff who will operate the facilities through ramp up in
Year 1 and on to normal operation.
| 18.15 | Owner’s Implementation
Plan |
The KSM Mine will be constructed as outlined in Section 18.14
and in the time frames indicated in the construction schedule in Section 18.14.4. It is the Owner’s responsibility to attain, and renew
when necessary, all environmental and operating permits allowing site access road development, mine construction, and all mine operations
for KSM.
This Owner’s implementation plan described herein attempts
to provide a preliminary outline to the key responsibilities and actions the Owner’s Team will take, including interaction with EPCM contractors
during the construction stage and commitments in accordance with the IBAs that are in place with the First and Treaty Nations. It is assumed
KSM will be developed as a JV or consortium of two or more companies that will form a partnership to build and operate the KSM Mine. A
JV organization would allow KSM’s partners to reduce risk and spread capital expense. The “Owner” referenced in this section
is synonymous with this JV organization. It is further assumed that the structure developed will assign decision making authority to the
majority stakeholder to eliminate bureaucracy and streamline development and mine production decisions. The KSM Mine will therefore have
its own operating structure and reporting line through the JV partnership, maintaining its own profit and loss accountability to the JV
partners. The Owner’s organizational structure will have a KSM president with multiple reporting lines through a six-layer organization.
Site based reporting lines to the president comprise construction, mine, and process with on-site administrative functional support as
necessary to enable the Owner’s Team’s success. Additionally, off-site business and external relations functions would also
report to the KSM president.
A central office in Vancouver is not anticipated. Instead,
satellite offices will be located in Terrace, Smithers and Stewart, BC to facilitate support functions sufficiently close to the construction
site to provide effective support. The implementation plan described in this section highlights some key tasks required for execution
by the Owner’s Team over the course of construction. There are two initial critical tasks for the Owner’s Team, starting with the identification
and hiring of the KSM president, who will initially select a team, who in turn will do the same for their respective teams. This process
is expected to be repeated throughout the course of construction until the entire organization has been built, while directing and supporting
construction in various roles.
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The second initial critical Owner’s Team task is the engagement
of an EPCM contractor early in the development schedule to drive the majority of the scope that resides outside of the Owner’s direct
responsibility. The type of contractual arrangement between the Owner and EPCM contractor has not been established, as it relies on the
strategy that will be developed after forming the JV and may be influenced heavily by the operating style of the JV partners.
The Owner will manage any early engineering work required
to prepare design documents that support permit applications or renewals and compliance reports for permits issued by the Province of
British Columbia and the Government of Canada. Site road access permits, construction camps approvals, and limited site development permits
have been obtained. Additional permits will be required by the KSM Mine to ensure the completion of construction and the initiation of
long term operations. During construction, the Owner will be responsible for:
| ● | mine development/construction including pre-stripping |
| ● | supervision of mine fleet assembly |
| ● | all environmental baseline monitoring, permitting and compliance |
| ● | operation of temporary water treatment and sewage treatment plants |
| ● | community and governmental relations |
| ● | Treaty and First Nation relations |
| ● | competitively bidding, adjudication and award of EPCM |
| ● | Owner’s Team recruitment |
| ● | training of operating personnel for the Mitchell pre-mining phases |
| ● | verification surveying for measurement and payment |
| ● | on boarding all G&A staff for both on-site and off-site positions in advance of commissioning to assist as part of the Commissioning
Team and to develop process and procedures for each department/function to efficiently support operations |
| ● | all personnel required for ultimate mine and plant start-up and operations. |
| ● | The Owner will recruit and train technical operations and administrative staff to work in the following locations: |
| ● | Treaty OPC Operations and Water Management – process plant and train operations, maintenance, TMF operations, security, and
administrative personnel |
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| ● | Mine Site and Water Management – operations, maintenance, security and warehousing personnel |
| ● | Smithers Office – proposed to be developed to service all of KSM’s needs for external relations comprising governmental affairs,
environmental management, permitting and compliance, public and community relations and communications, First Nations and Treaty Nation
relations |
| ● | Terrace Office – proposed as a business centre where home office support will be based for these administrative functions: supply
chain and logistics, human resources, IT, accounting functions, tax, business analysis, legal and audit. Health, safety and loss prevention
may have occasional presence in this office, but will be primarily based on site to support ongoing operations as they develop |
| ● | Stewart Port Site – management of deliveries and security for incoming construction equipment/materials and outgoing concentrate
shipments. |
A conceptual onboarding plan for specific G&A functions
will be developed prior to turnover of constructed areas of the site from EPCM to the Owner’s Team and is programmed to be well in advance
of the turnover. This will allow sufficient time for the development of internal KSM Mine processes and procedures as a means to facilitate
a smooth mine start up. The early onboarding plan is intended to cover gaps in service areas that may not have been detected in this early
stage of design.
The time sequences for key Owner activities by year are outlined
in Table 18.9. Note that this task list assumes that a FS has been completed or is running concurrently with the construction start and
that either full or conditional/partial construction funding will be granted by the Owner ahead of the construction start.
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| Table 18.9 | Owner’s Key Activities by Year |
| Year |
Activities |
| (Year
-6) |
● complete
FS by Q2 Year -6
● renew
early works permits, as necessary, to support initial construction
● recruit
KSM president and project directors
● recruit
and onboard key department leads for process, human resources, business manager, and environment and community relations
● initiate
training programs required to meet First and Treaty Nation employment objectives
● establish
a business office in Terrace, BC
● implement
site environmental monitoring program at the start of construction
● recruit
and install at site environmental monitors, TWTP and sewage plant operators, field coordinators to support early works construction mainly
for road building and camp construction
● competitively
bid, adjudicate, and award EPCM services
● in
conjunction with the EPCM contractor, develop a detailed execution plan for the construction leveraging all previous engineering, construction
planning, and environmental permitting work.
● establish
project governance between Owner and EPCM teams
● finalize
detailed engineering work for early phase construction activities
● release
early works contracts for remaining road and bridge construction (CCAR & Upper TCAR; critical path)
● initiate
Treaty Creek fish habitat compensation construction |
| (Year
-5) |
● manage
EPCM contractor focusing on detail engineering and long-lead procurement activities off site, and early works construction on site
● augment
site Owner’s Team adding environmental services, survey (measurement and payment), medical services
● expand
Smithers, BC office to accommodate larger office headcount
● initiate
Mine Site development
● establish
road to Mitchell P8 quarry to support WSD construction |
| (Year
-4) |
● augment
site Owner’s Team in the following areas: process operations, site administration, security, site project management, human resources
and environmental services; process operations staff are expected initially to reside in the EPCM contractor’s office to guide detailed
design and process equipment selection
● continue
to manage EPCM contractor focusing on detail engineering and procurement activities off site and early works construction on site; procurement
focusing on large equipment purchases required at site in Year -3 and
beyond
● continue
Mine Site development
● start
delivery P8 Quarry rock to WSD for construction |
| (Year
-3) |
● complete
final detailed design for all remaining project scope and finalize all equipment purchases.
● initiate
enterprise computer systems set up in off-site offices
● continue
to manage EPCM contractor whose focus is now shifted mainly to field activity
● initiate
business readiness planning leveraging Owner’s Team resources, working collaboratively with the EPCM contractor
● augment
off-site human resources team
● continue
Mine Site development
● continue
delivery of P8 Quarry rock to WSD for construction |
| |
table
continues… |
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| Year |
Activities |
| (Year -2) |
● finalize
concentrate smelting contract terms
● continue
to manage EPCM contractor whose focus is solely on field activity
● establish
satellite office and recruit port staff for facility at Stewart, BC
● expand
Terrace, BC office footprint to full size necessary to fully support mine and process operations on site
● recruit
all operations staff for HDS WTP to participate in wet commissioning of the facility following dry commissioning and handover by EPCM,
initiate plant start up and operations
● continue
Mine Site development
● continue
delivery of P8 Quarry rock to WSD for construction |
| (Year
-1) |
● recruit
and on board all remaining positions for the process plant, metallurgical laboratory and TMF; plant operators are highest priority and
TMF staff will be on boarded toward year end
● complete
recruitment for mine operations team
● perform
a significant amount of operator training in preparation for operations start up
● oversight
of OEM assembly of major mine fleet equipment
● after
completion of WSD and WTP, initiate ore mining in Mitchell open pit Phase I
● delivery
of first ore to Mitchell OPC
● fully
execute wet commissioning following dry commissioning and handover by EPCM of the process plant and all infrastructure
● initiate
ore transfer through the MTT controlled by process operations
● introduce
first ore to Treaty OPC and begin process plant ramp up |
|
Operations
Year 1
|
● complete
recruitment and on boarding for remaining G&A and process operations staff during process plant ramp up
● complete
oversight of OEM assembly of major mine fleet equipment
● produce
first copper concentrate and doré at the Treaty OPC
● initiate
sand tailings production at the TMF and train employees on procedures for this long term dam construction effort
● achieve
commercial production
● ramp
up to full scale mining and primary crusher operations at the Mitchell OPC from Phase I mine development stages at Mitchell and Sulphurets
● shipment
of copper concentrate from the port facility in Stewart |
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| 19.0 | Market Studies and Contracts |
Seabridge engaged NSA to provide opinion reports on marketing
inputs for the 2016 PFS and review the 2019 copper-gold concentrate market and related concentrate treatment charges, excluding off-site
transportation costs. In May 2022, NSA provides an update to this opinion focusing on the validity of the assumptions. The information
and options in this section mainly come from the 2016 and 2019 Opinion Reports with applicable comments where appropriate.
No smelter contracts are currently in place or being negotiated.
All currency amounts used in this section are in US dollars, unless otherwise specified.
When considering the marketability of copper concentrates,
quality and quantity are determining factors. There is considerable variation in the quality of concentrates and the requirements of various
smelters do vary; such variation relates to the technical abilities of the smelter and its overall concentrate feed and blend.
While smelters prefer a feed with about 30% copper and similar
amounts of iron and sulphur, copper grades from many major high-grade suppliers have been falling and the market is seen the blend for
many smelters dropping to a copper content of about 27%. Apart from the copper content, levels of iron, and sulphur, other key elements
including gold and silver and impurity content are factors in concentrate market. Based on the impurity levels projected by Tetra Tech
(using the test results completed to date – see Table 17.3), concentrates are relatively clean. Depending on the prevailing market
at the time of contract negotiations, penalties will likely be minimal if any. Certain smelters in Japan, South Korea, and Europe, have
more interest in copper concentrates with high gold content.
Copper Concentrate Smelting Market
Copper concentrates account for approximately four-fifths
of total newly-mined copper production, with the balance of output coming from solvent extraction and electrowinning copper cathode and
other copper-bearing by-products.
Concentrate supply started to increase over 2013 and continued
to increase to the current time with development of announced expansions of operating mines continuing. Integrated smelters process a
significant portion of copper concentrate production. Such smelters are captive plants vertically integrated with mines through ownership.
Non-integrated copper concentrate production globally is treated by custom smelters generally unintegrated with mines, although many may
have investment ownership in mines. Custom smelters have increased their overall smelting market share following significant expansion
of smelting and refining capacity, particularly in India and China. Such smelting industry has increased imports, as limited domestic
mine capacity does not meet demand. This trend has been a key determinant in world concentrate supply/demand balances.
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The copper concentrate market has seen significant structural
imbalances in the recent years between mine production and smelting capacities. Market treatment and refining charges have been volatile.
Having fallen significantly to very low levels, at the time of writing there have been significant increases in smelter treatment charges
and refining charges (TCs/RCs). Supply demand balance for concentrates determined by mine production relative to availability of capacity
of the smelting industry. The availability of custom concentrates, relative to smelting capacity, should, in theory, be the ultimate determinant
of terms for custom treatment of concentrates. However, the focus on strategic metals of which copper is one with the demand for EV’s
has stimulated trade in copper concentrates and moved the copper price.
Copper Concentrates Contracts and Terms
The concentrate market consists of two types of contracts
– longer term off-take contracts between mines and smelters generally reflecting the annual concentrate supply and demand balance
and spot or short-term business primarily between mines and traders. Such spot business on a smaller scale exists between mines and smelters.
By its nature, spot business is more volatile and there is considerable variation in spot TCs/RCs, not only annually, but over any year.
Current and Future Terms
NSA suggests that annual benchmark numbers are beginning
to reflect a move towards sustainable long-term numbers. NSA believes that the most likely scenario is that ultimately charges need to
move up towards a level that is economical for the smelting industry over the long term. Historical benchmark numbers are shown in Table
19.1
| Table 19.1 | Benchmark Smelting Terms |
| |
2017 |
2016 |
2015 |
2014 |
2013 |
| Copper Treatment Charges ($/dmt) |
92.50 |
97.50 |
107.00 |
92.00 |
70.00 |
| Copper Refining Charges ($/lb) |
0.0925 |
0.0975 |
0.1070 |
0.0920 |
0.0700 |
| |
2018 |
2019 |
2020 |
2021 |
2022 |
| Copper Treatment Charges ($/dmt) |
82.25 |
80.80 |
62.00 |
59.00 |
65.00 |
| Copper Refining Charges ($/lb) |
0.0823 |
0.0808 |
0.0620 |
0.0590 |
0.0650 |
In the 2016 Opinion, it was noted looking at the history
of treatment refining charges over approximately 20 years up to 2005, these averaged about $77 per DMT and 7.7 cents per pound (this included
approximately one cent of participation for these purposes split between the treatment charge and the copper refining charge) at an average
price of $0.93 per pound of refined copper. With the copper price today at about four times as price, current treatment charges are well
out of line with history. This could be said to support treatment charges needing to be higher in the future given cost increases.
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For comparison, the spot market April 2016 sales into the
Chinese market the levels of TCs/RCs were between $90/dmt and $95/dmt of concentrate and $0.090/lb and $0.095/lb of copper, respectively.
Today, spot treatment charges traders buying from mines are indicated as TC $70 to $80/dmt with RC $0.07 to $0.08/lb of refined copper.
The comparative number for sales into China would be around TC $80 to $90/dmt with RC $0.08 to $0.09/lb of refined copper. The general
view is to not expect price participation materializing near term, but it should not be ignored.
In 2016, a TC of $100/dmt coupled with any RC of $0.10/lb
of refined copper was suggested. In 2019 and as a noted this was conservative when linked to copper price assumptions and for planning
there was a case for reducing these assumptions to TC $95/dmt and RC $0.095 /lb of refined copper. Costs in both for mining and smelting
are rising with par costs being particularly noteworthy. Inflation is putting pressure on labour costs and further upward movement is
probable. The level of long-term TC/RC can be debated with a range being TC $90 to $95/dmt and RC $0.090 to 0.095/lb of refined copper
in constant dollars.
TCs/RCs are not the only terms that are used in valuing
copper concentrates. Payments and deductions are a matter of negotiation and will vary with many factors, including supply and demand,
and custom individual markets.
The following terms are an indication of “standard”
long-term smelter charges, including suggested TC/RC terms. Delivery is based on Cost, Insurance and Freight – Free Out (CIF-FO)
smelter ports (the mine pays all costs up to delivery port and the buyer arranges and pays for cargo discharge).
Payable Metals
| Copper | Pay 96.5% with a minimum deduction of 1 unit (amount deducted must equate to a minimum of 1% of the agreed concentrate copper
assay). |
| Silver | If over 30 g/dmt pay 90%. |
| Gold | A scale is applicable with some variations of the following: |
| ● | less than 1 g/dmt, no payment |
| ● | 7 to 10 g/dmt, pay 96.5% |
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| ● | over 30 g/dmt pay 97.75%. |
Gold and silver payments may vary between smelter locations.
In China, high gold in copper concentrates is not generally desired; relating more to internal pricing issues rather than technical concerns.
Technically, the more modern smelting facilities are able to accept payment formulas similar to Japan and South Korea, but for many of
the older smelters in North China, this is not the case. In Europe, with grades of over 40 g/dmt of gold content, payment of 97.75%
with a minimum deduction of 1 g/dmt is likely to apply.
Refining Charges
| Copper | $0.095/lb payable copper |
| Gold | $6.00 to $8.00/oz payable gold |
| Silver | $0.50/oz payable silver |
Treatment Charges
Treatment Charge $95.00/dmt CIF-FO main smelter port.
Price Participation
Not applicable at present.
Penalties
| Arsenic: | $2.50 to $3.00 per 0.1% over 0.1% up to 0.5% arsenic |
| Antimony: | $3.00 to $4.00 per 0.1% over 0.1% antimony |
| Lead: | $2.00 to $3.00 per 1% over 0.5% to 1.0% lead |
| Zinc: | $2.00 to $3.00 per 1% over 2% to 3% zinc |
| Mercury: | $2.00 per each 10 ppm over 10 ppm mercury |
| Bismuth: | $3.00 to $5.00 per 0.01% over 0.03 to 0.05% bismuth |
| Selenium: | $3.00 to $5.00 per 0.01% over 0.05% selenium |
| Tellurium: | $4.00 to $5.00 per 0.01% over 0.02% to 0.03% tellurium |
| Fluorine | $1.00 to $2.00 per 100 ppm over 300 ppm fluorine |
| Chlorine | $1.00 to $3.00 per 100 ppm over 300 ppm chlorine. |
Furthermore, penalties may also vary from smelter to smelter.
It should be noted that for the elements where a percentage range is used, this relates to ranges of penalty thresholds that are negotiated.
The penalties noted in this section are generally in line with levels applicable over recent years, but there is a tendency towards higher
levels.
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Based on the anticipated impurity levels derived from the
test results by Tetra Tech (as presented in Table 17.3), the concentrates from the KSM concentrate production are relatively clean, and
depending on the market situation at the time of contract negotiations, penalties will likely be minimal if at all applicable. As most
of the mill feeds will be the blended materials from different deposits and spatial locations, the blend should effectively mitigate penalty
elements rising for the ore from some limited locations.
Other Off-site Costs
Various indirect costs other than smelter charges include:
| ● | Losses; assumed to be 0.1% or less, due to improvements in material handling. |
| ● | Insurance; marine insurance is assumed to be in the range of 0.1 to 0.15% of net invoice value of the concentrate. |
| ● | Supervision, assaying and umpire costs; the costs for third-party supervision and assaying are assumed to be approximately US$1/dmt. |
| ● | Marketing; the cost of marketing varies with concentrate tonnage, location, and number of smelters to be shipped. For 2022 PFS, the
estimated marketing cost is in the range of US$5 to US$10/dmt. |
| ● | Concentrate transportation; the transportation costs for copper concentrate are based on the following assumptions by Tetra Tech: |
| q | port storage and handling: US$17/wmt |
| q | ocean transport to Asian port: US$49/wmt. |
| 19.2 | Molybdenite Concentrate |
Molybdenum concentrates of either primary production origin,
or as a co-product, need to be further processed. This is initially to produce molybdenum oxide by roasting, or by use of autoclaves for
upgrading. Quality is an important consideration and certain elements can be deleterious. As a rule of thumb, 50% molybdenum content is
considered the minimum. Below that, buyers will begin to be a bit selective and charges will rise somewhat. One guideline, given for each
1% below 50%, would be an increase in charges of $0.05/lb of molybdenum.
Currently, the deduction for roasting is very quality dependent,
with high copper content concentrates generally selling at a 10 to 15% discount. Assuming that the copper content of its molybdenum concentrates
is reduced to 0.45% or less, the lower end of the range will apply to clean high-grade concentrates. In the years (2005 to 2009), discounts
for high-copper molybdenum concentrates have reached 25%.
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In summary, it is recommended to use a discount of 12% from
the price, with a minimum of $1.00/lb and a maximum of $2.50/lb. This discount would be inclusive of all charges mine to market, such
as delivery costs, irrespective of whether or not the concentrate is sold to a trader or a roaster directly.
On average, the molybdenum concentrate from KSM could contain
approximately 1,000 to 2,000 ppm rhenium or higher. Given the high rhenium content, some roasters would recognize the rhenium content
in the form of lower treatment charge or some payments. However, it is difficult to project the rhenium value at the current market and
the level of study. This potential for additional value in the rhenium content represents a future opportunity.
There are no gold and silver doré marketing studies
conducted for this PFS. No smelter contracts are currently in place or being negotiated. The terms used for this study are based on the
typical terms currently used in the markets. All currency amounts used in this section are in US dollars, unless otherwise specified.
The general payment terms for gold and silver doré are assumed as below:
| ● | Gold: pay 99.8% of content less a refining charge of US$1.00/accountable oz. Doré transportation is assumed to be US$1.00/oz. |
| ● | Silver: pay 90.0% of content less a refining charge of US$1.00/accountable oz. Doré transportation is assumed to be US$ 1.00/oz. |
| ● | Insurance and assay costing is assumed to be in the range of 0.10 to 0.15% of net invoice value of the doré. |
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| 20.0 | Environmental
Studies, Permitting, and Social or Community Impact |
| 20.1 | Licensing and Permitting |
The KSM mine development plan was subject to the BCEAA, the
Canadian Environmental Assessment Act- 1992 (CEAA), and Chapter 10 of the NFA. In this section of the Report, the term “Project”
refers to a mine development plan that would substantially support what is contemplated in the 2022 PFS.
As of May 2022, the Project has completed the provincial
and federal environmental assessment review processes, and the appropriate certificates/approvals have been obtained for this stage of
the Project’s development. Additionally, permits for early-stage construction activities, continuation of exploration, certain permit
and project approval renewals have also been obtained from provincial agencies, and authorizations to construct and operate obtained from
the federal agencies. KSMCo continues to advance permitting to allow for the construction of the KSM mine, as well as to continue exploration
activities. Details of the provincial, federal, and NFA processes and current status, as well as the current permitting status of KSM
property, are included in this section.
The KSM Project completed a harmonized EA process with the
provincial and federal governments, in accordance with the principles of the Canada-BC Agreement on Environmental Assessment Cooperation
(Cooperation Agreement 2004). The KSM Project also completed a separate EA review and received approval as required under the Nisga’a
Final Agreement. The harmonized EA process included a working group comprising federal and provincial officials, the Nisga’a
Lisims Government (NLG), Indigenous groups, and local government agencies. Although the KSM project does not require authorizations from
US agencies, the Project EA involved representatives of the US federal and Alaska state agencies due to the project’s location near
the US/Canada border.
The following major permits have been
obtained for the KSM property:
| ● | BC EMLI Mines Act (1996) Permit M-245 (amended 17 May, 2022 - amalgamating Mines Act Permits MX-1-571 (KSM), MX-1-763 (PTMA), MX-1-965
(DKEA), MX-1-998 (KSM Iron Cap High Camp), MX-100000044 (Snowfields). |
| ● | Mining Leases 1031440 and 1031441 were issued to Seabridge Gold Inc. on October 6, 2014. |
| ● | BC Ministry of Forests, Lands, Natural Resource Operations and Rural Development (BC MFLNRORD) Land Act (RSBC 1996c), Licence
of Occupation for MTTs Roadway SK904033. Licence of Occupation for Treaty Transmission Line SK908555. |
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| ● | BC MFLNRORD, Forest Practices Code of British Columbia Act Special Use Permits for Treaty Creek (S25751) and Coulter Creek
Access Roads (S25750). |
| ● | BC MFLNRORD, Forest Act Occupant Licence to Cut L49546 (Mine Site), L49608 (CCAR), L49658 (PTMA) and L49612 (TCAR). |
| ● | BC ECCS, Environmental Management Act, Authorization for Effluent Discharge PE106814 (TWTP#6), PE108155 (DKEA), and PE106824
(TWTP#4). |
| ● | BC ENV, Environmental Management Act, Authorization PA 106826 for air emissions for five KSM camps. |
| ● | BC ENV, Environmental Management Act, Authorizations PR 106834 (Mine Site) and PR106835 (PTMA) for authorized landfills. |
| ● | BC ENV, Environmental Management Act, Registration for Municipal Wastewater Regulation Authorization PE 106836 for waste discharge
to the environment for Camp 9/10 and PE106837 (Camp 6), PE106839 (Camp 5), EP106809 (Mitchell Operating Camp), PE106841 (Camp 4). |
| ● | Canada Department of Fisheries and Oceans, Environment Canada, Fisheries Act Authorization under Paragraphs 34.4(2)(b) and
35(2)(b) of the Fisheries Act for mine waste discharge into fish habitat resulting in a harmful alteration, disruption, or destruction
(HADD), and the authorization of fish habitat offsetting works (Glacier, Taft, and Treaty creeks). |
| ● | Transport Canada, Canadian Navigable Waters Act, Authorization to construct a bridge over the Bell-Irving River for the KSM
Mine Access Road. |
| ● | Environment Canada, International River Improvements Act, License to construct and operate improvement works on tributaries
of the Unuk River which is an international river crossing the Canada-US border. |
| ● | Nisga’a Final Agreement (NFA), Chapter 10 – Environmental Assessment and Protection approval in December 2014 |
| 20.1.1 | Provincial EA Process |
Under the BC EA process, certain projects must undergo an
EA, and an EA Certificate must be obtained before the KSM mine development can proceed. The scope, procedures, and methods used for each
assessment are tailored to the specific circumstances of a proposed project. The EA must assess a project’s potential environmental,
economic, cultural, social, heritage, and health effects.
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| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
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The KSM Project officially began the BC EA process in March
2008, with the submission of a Project Description (Rescan 2013). Over the following six years, the project underwent parallel provincial
and federal EA processes. In July 2013, KSMCo submitted an Application/EIS (Rescan 2013) under the BC Environmental Assessment Act
(BCEAA 2002) to the BC Environmental Assessment Office (BCEAO). EA Certificate #M14-01 for the KSM project was issued on July 29,
2014 (Certificate). The Certificate required that the KSM Project be substantially started within five years of July 29, 2014.
The full Application/EIS can be found on the BCEAO web site:
http://a100.gov.bc.ca/appsdata/epic/html/deploy/epic_project_doc_list_322_r_app.html
On March 21, 2019, the date specified in the Certificate
by which KSMCo must have substantially started the Project was extended from July 29, 2019 to July 29, 2024.
In August 2020, KSMCo applied for an additional two-year
extension of the Certificate from July 29, 2024 to July 29, 2026 due to the impacts of the COVID-19 pandemic. On November 16, 2021, the
Minister extended the date specified in the Certificate by which KSMCo must have substantially started the Project, to July 29, 2026.
The KSM Project was subject to a comprehensive study level
of assessment under the CEAA (1992).
A “comprehensive study” of the KSM Project commenced
in July 2009, and the federal EA process continued over the following five years along with the provincial EA process. The KSM (Kerr-Sulphurets-Mitchell)
Project Comprehensive Study Report (KSM Project Comprehensive Study Report) was issued by the Canadian Environmental Assessment Agency
in July 2014.
The KSM Project Comprehensive Study Report, along
with comments from the NLG, other Indigenous groups, and the public, were considered by the Minister of the Environment when making her
final EA decision. KSM received federal approval that the Project could proceed on December 19, 2014.
Nisga’a Final Agreement
The NFA is a treaty signed by Nisga’a Nation,
the Government of Canada, and the Government of BC in 1999.
KSMCo proposes to develop some components of the 2022 PFS
footprint within the Nass Area, including the Treaty OPC, the TMF, and the northern portion of the MTT. No components of the KSM infrastructure
will physically occupy any portion of Nisga’a Lands or the Nass Wildlife Area (NWA), both of which are located south of the
potentially affected portion of the Nass Area.
The NFA provides for Nisga’a participation in
federal or provincial EAs of projects within the outer Nass Area boundary and an assessment of potential adverse project effects on residents
of Nisga’a Lands, the Nisga’a Lands themselves, or more generally, on Nisga’a interests as set
out in the NFA.
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The Government of Canada worked with the NLG and the Government
of BC to facilitate the assessment of Nisga’a effects as part of the CEAA comprehensive study. KSMCo completed an economic,
social, and cultural impact assessment (ESCIA) on the well-being of Nisga’a citizens based on a work plan that was required
by the joint Application Information Requirements (AIR). Effects were described in the Application/EIS as part of KSMCo’s analysis
of the effects KSM mine development will have on environmental valued components (VCs).
The KSM Project Comprehensive Study Report examined
effects on Nisga’a citizens, lands, and interests. KSM received its NFA approval in December 2014 following receipt of the
Federal CEAA Approval on December 19, 2014.
The Application/EIS was accompanied by applications for eligible
provincial authorizations in accordance with the BC Environmental Assessment Act (BCEAA 2002) Concurrent Approvals Regulation (BC Reg.
371/2002).
This set of initial permits is referred to as the “Batch
1 Permits” and included permits for the following mine components:
| ● | KSM Project Mines Act and Environmental Management Act Permit Application for Limited Site Construction (May 2013) |
| ● | Special Use permits for the CCAR and TCAR |
| ● | KSM Project Treaty Transmission Line |
| ● | Land Act tenure for the MTT Roadway. |
In November 2015, KSMCo submitted a Mines Act Notice
of Work and an Environmental Management Act (2003) permit application to construct the Kerr Exploration Adit (DKEA). Mines Act
permit MX-1-965 authorizing construction of DKEA was issued September 20, 2016, and EMA permit PE-108155 was issued on August 24, 2016
authorizing the discharge of mine effluent from the DKEA to Sulphurets Creek. The DKEA will be located near the existing temporary KSM
exploration camp.
As of May 2022, KSMCo estimates that upwards of 75 provincial
permits, licences, and approvals may be required to fully develop the 2022 PFS. As KSMCo undertakes further project optimization studies,
permit requirements are routinely evaluated for the need to amend existing issued permits, or to identify where new permits, licences,
and approvals may be required to take into account project optimization initiatives. A single consolidated Mines Act Permit is
being developed for the Project to make more efficient permit condition management. A register of permits is maintained.
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The Application/EIS included applications for the following
federal permits and authorizations:
| ● | Metal and Diamond Mining Effluent Regulations (MDMER) Schedule 2 Amendment |
| ● | International Rivers Improvements Act Licence |
| ● | Canadian Navigable Waters Act authorization. |
Further details are provided in the following sections.
Fisheries Act (RSC 1985, c F-14) - MDMER
Schedule 2 Amendment Application
Section 36(3) of the Fisheries Act (1985) prohibits
the deposit of deleterious substances into water frequented by fish (i.e., fish-bearing waterbodies); however, deposition of metal mine
tailings and/or waste rock into such waterbodies may be exempted from this prohibition if the water bodies are included in Schedule 2
of the MDMER of the Fisheries Act (1985) (Schedule 2). In order to permit the construction of the proposed tailings management
facility in North Treaty Creek and South Teigen Creek (both fish-bearing streams), an application to amend Schedule 2 of the MDMER was
submitted with the Application/EIS along with a fish habitat compensation plan designed to offset the habitat losses associated with the
Schedule 2 amendment (see MMER Compensation Plan – Appendix 15Q of the Application/EIS). The waterbodies contained in the proposed
KSM tailings impoundment area were gazetted and added to Schedule 2 in July 2017.
Other Fisheries Act Permitting
Section 34.4 of the Fisheries Act prohibits any work
that results in the death of fish, unless authorized. Section 35 of the Fisheries Act prohibits the HADD of fish habitat unless
authorized. KSM requires an authorization under Sections 34.4 and 35(2) of the Fisheries Act to permit the HADD associated with
other Project infrastructure.
On August 4, 2021, Fisheries and Oceans Canada issued an
authorization under Paragraphs 34.4(2)(b) and 35(2)(b) of the Fisheries Act to KSMCo for the proposed project works, undertakings
and activities associated with the TMF construction and associated diversions, and installation of Treaty Creek pipeline outlet. The term
of the authorization extends to December 31, 2029, and may be renewed. The Fisheries Act authorization includes Condition 4.4 requiring
the construction of the Glacier Creek Fish Habitat Offsetting Plan (FHOP). Construction of the Glacier Creek FHOP was initiated
in 2021 and is projected to be completed in 2022. Additional fish habitat offsetting plans required under Schedule 2 are planned to begin
construction for Taft Creek in 2022/2023, and for Treaty Creek in 2024.
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International River Improvements Act licence
An application for a licence under the International River
Improvements Act was submitted to Environment Canada in February 2015.
The application was prepared in accordance with Sections
6 and 7 of the International River Improvements Regulations (C.R.C., c982). The application is for improvements on the Unuk River,
specifically within the Sulphurets Creek Watershed (which is a tributary to the Unuk River) (Improvements).
The licence was issued on October 21, 2016, and transferred
to KSMCo in 2018. The licenced Improvements include the Water Storage Facility and ancillary water works for 2022 PFS, representing dams,
reservoirs, and associated water diversion, collection, and management structures for the purpose of: diverting fresh (non-contact) water
around the mine site to downstream receiving waters and collecting water that has been in contact with disturbed areas from the mine site
for control prior to discharge into the receiving waters.
The Licence is valid for 25 years until October 20, 2041.
Navigable Waters Approvals
Further to a letter received from Transport Canada dated
August 1, 2014 (where Transport Canada determined that waterways that were assessed as part of the EA process were not navigable waters),
Transport Canada subsequently determined that the Bell Irving River is navigable for the purposes of the Canadian Navigable Waters
Act, and an approval was required for the construction of the Bell Irving River Bridge. KSMCo submitted the application on July 12,
2021, and received approval from Transport Canada on November 18, 2021, which authorized a Permanent Bridge and Temporary Bridge crossing
the Bell Irving River. An approval will also be required for the Unuk River crossing for the Coulter Creek Access Road.
| 20.1.5 | benefits agreements |
Nisga’a Nation
On June 16, 2014, KSMCo entered into a comprehensive Benefits
Agreement with the Nisga’a Nation in respect of the Project. The Benefits Agreement establishes a long-term co-operative
working relationship between KSMCo and the Nisga’a Nation, under which the Nisga’a Nation will support the mine
development and participate in economic benefits from the Project Environmental Settings and Studies.
The Project is located in the coastal mountains of northwestern
BC, approximately 950 km northwest of Vancouver, 65 km northwest of Stewart, and 35 km northeast of the BC-Alaska border.
The following sections summarize the valued components of
the biophysical and socio-community aspects of the Project that have been studied and reported in the Application/EIS (Rescan 2013) in
relation to the EA process. Studies occurred at different scales involving detailed studies within a Local Study Area (LSA) and lower
density studies in a Regional Study Area (RSA) as defined in the Application/EIS.
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Tahltan Nation
On July 8, 2019, the Tahltan Nation and KSMCo announced that
the parties reached agreement on the terms of a Co-operation and Benefits Agreement in connection with the Project (IBA). The IBA provides
a framework for the parties to work together in relation to the Project and includes commitments to economic benefits and environmental
management of the land.
| 20.1.6 | Biophysical Setting |
Air Quality
The air quality in the area proposed for the Project is predominantly
unaffected by anthropogenic sources, reflecting the region’s remoteness and the lack of, and localized nature of, sources of anthropogenic
air emissions.
Geology and Geochemistry
The mineralized zones in the local area and more regionally,
tend to be sulphide-rich. Where sulphide minerals such as pyrite are present, oxidation can create ARD, unless sufficient quantities of
neutralizing minerals are available. In the event that acidic drainage is formed, low pH conditions can lead to higher rates of metal
leaching (ML). Baseline surface water and groundwater quality in the vicinity of mineralized zones in the region exhibit relatively low
pH and significant metal concentrations, reflecting the presence of sulphide minerals and the natural occurrence of ML/ARD processes.
Physiography
The KSM topography is very rugged. Glaciers are common in
high elevations. Most steep slopes consist of exposed bedrock and accumulations of rubbly colluvium. Gentler slopes have a thin mantle
of morainal material (glacial till). Thick glacial deposits are generally restricted to the margins of major valley floors and adjacent
lower slopes. Avalanches and slope failures are common features at high and intermediate elevations (above 1,500 masl).
Geohazards
Locally and regionally, geohazards are linked primarily to
landslides and snow avalanches. Landslide hazards are abundant throughout the region. They are attributed to several factors, including
the presence of unstable surficial soils and weak bedrock, repeated geologically recent glaciations, resulting in over-steepened valley
sidewalls, the loss of slope buttress support following glacial recession, abundance of veneers that are shallow to bedrock, and the high
precipitation environment.
Unstable lateral morainal till has been deposited on slopes
at angles that exceed the angle of repose, resulting in rubbly colluvium accumulating along moderate steep slopes and valley bottoms.
The unloading of the valley walls following glacial retreat has led to pressure release cracks and associated local instability on over-steepened
slopes resulting in geohazards, such as rock fall, debris avalanches, and slumping of surficial materials. These geohazard processes are
endemic to the local area.
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Snow avalanche hazards are abundant due to high elevation,
substantial snow supply and generally steeper slope gradients, and tend to be associated with terrain that is open and steep.
Hydrology/Surface Water Quantity
Regional and local surface water quantity characteristics
were determined from data collected from specially installed hydrometric stations, used in conjunction with a regional analysis prepared
for long-term hydrometric data from Water Survey of Canada hydrometric stations.
The monthly distribution of flow tends to be concentrated
in the open water season (May to October), with less than 20% of the annual flow occurring from November to April at a majority of the
regional stations.
Groundwater Quantity
Groundwater conditions correspond with the mountainous, wet
environment that comprises the mine site and the PTMA. Groundwater gradients are high, driven by heavy rainfall and recharge at higher
elevations in the mountains. Valley bottoms are discharge zones, with groundwater levels near or above (artesian) ground surface. Discharge
zones also exist along valley walls in the mine site, where seeps of acidic water have been observed (with pH readings as low as 2.5).
Surface Water Quality
The hydrological regime affects water quality in two ways:
| ● | increased flows during freshet, glacial melt, and heavy rainfall events dilutes concentrations of major ions and total dissolved solids |
| ● | increased sediment load and transport during high-flow periods leads to increased concentrations of TSS and particle-associated metals. |
Streams near the mine site and PTMA have distinct surface
water quality. Metal leaching due to naturally occurring ARD is associated with total and dissolved metal concentrations in Mitchell and
Sulphurets creeks that are frequently higher than levels established in BC water quality guidelines for the protection of freshwater aquatic
life. The high suspended sediment load, low concentrations of bioavailable nutrients and high concentrations of total and dissolved metals
identified in Mitchell and Sulphurets creeks are contributing factors to the poor productive capacity of mine site streams. The lower
suspended sediment load, increased concentrations of bioavailable nutrients, and lower concentrations of total and dissolved metals identified
in the Snowbank, Teigen, Treaty, and Bell-Irving watersheds are contributing factors to the greater productive capacity of PTMA streams
relative to the mine site.
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Groundwater Quality
Groundwater quality at the mine site is heavily influenced
by the sulphide ore deposits. Groundwater is acidic near, and within, the mineral deposits, with pH measurements as low as 2.5 in seeps
along the valley walls of Mitchell Creek. Concentrations of certain metals are elevated in groundwater throughout the mine site, and are
particularly high near and within the mineral deposits. Metals with elevated concentrations include iron, aluminum, copper, chromium,
lead, manganese, and zinc. Groundwater in the Mitchell Valley is not suitable for human consumption or the sustenance of fresh water aquatic
life.
Wildlife Species
Mature forests, wetlands, alpine areas, and riparian forests
provide high-value habitat to a diverse wildlife community. Common species or groups that occur in the RSA include ungulates (e.g., moose
and mountain goat), omnivores/carnivores (e.g., grizzly bear, black bear, and wolves), furbearers (e.g., fisher, marten, and wolverine),
hoary marmots, bats, birds (forest birds, raptors, and waterfowl), and amphibians (e.g., Columbia spotted frog and western toad). Forest
harvesting within the RSA has been minimal compared to many other areas in BC, due to the remoteness of the area and the relatively poor
productivity of the forests, so that the wildlife habitats found in the majority of the wildlife RSA are essentially undisturbed.
| 20.1.7 | Economic, Social, and Cultural Setting |
Governance
There are five levels of governance in the area of northwestern
BC where the 2022 PFS will be developed. Municipal, regional, provincial, and federal bodies comprise the non-Indigenous forms of governance,
while Indigenous communities have their own governing bodies.
The 2022 PFS is situated in the Regional District of Kitimat-Stikine,
and Electoral Area A of the Bulkley Nechako Regional District. Local communities include municipalities, Nisga’a villages,
other Indigenous communities, and unincorporated settlements. Municipal governance only exists for the District of Stewart, the City of
Terrace, the Village of Hazelton, the District of New Hazelton, and the Town of Smithers. The remaining communities that are not administered
by Indigenous bodies (Dease Lake, South Hazelton, Bell 2, Meziadin Junction, and Bob Quinn Lake) are unincorporated and governed by the
regional district in which they are situated.
Economic Setting
Economically, the region where the Property is located has
been dependent upon timber and minerals for well over 100 years. The majority of non-Indigenous communities in the region were initially
established to serve natural resource activities such as the mine operations near Cassiar, Stewart, Smithers, and Bob Quinn Lake. Historically,
the region’s economic and social diversity has been constrained by limited access and infrastructure, lengthy distances, remote
and small communities which provide limited labour or services, and long winters. More recently government and private investment has
improved road access, port development, and independent power generation, and brought provincial grid power into some parts of the region.
The Red Chris and Brucejack mines recently opened, providing long-term direct and indirect employment to local communities and others
within and outside of the region.
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Forestry, fishing, and mining were the key economic drivers
of northwestern BC through the 1950s to the 1980s. Today, the economies of local communities continue to be largely resource-based, and
focus on supporting these sectors in the region.
Overall, the economy in northwestern BC is gradually becoming
more diversified and now includes hydroelectric power generation. In some communities, employment levels have increased in the public
service, sales and service, tourism, transportation, and mineral exploration sectors. Employment sectors in local Indigenous communities
now include sales and service, mineral exploration, labour, and government administration components. Expanded education and training
opportunities to support regional economies is also delivered regionally, enabling residents to train and work locally. There are recent
signs that the population decline may be reversing.
Today, the mining industry continues to provide an important
source of employment in the region, supplying an estimated 30% of jobs for communities along Highway 37 in recent years.
Social Setting
Recent economic conditions in the mining sector influence
population levels in regional communities. Population losses have stabilized and are now increasing with the opening of Brucejack and
Red Chris mines, hydroelectric power operations, port development and a healthy mineral exploration industry.
Indigenous Groups
Several Indigenous groups may be potentially affected by
the development of KSM. The PTMA is situated within the Nass Area, as defined by the NFA. The Tahltan Nation (as represented by the Tahltan
Central Council) asserts a claim over part of the 2016 PFS footprint. The Gitanyow First Nation (notably wilp Wiiltsx-Txawokw),
the Gitxsan Nation (as identified by the Gitxsan Hereditary Chiefs Office), and wilp Skii km Lax Ha have identified potentially
affected interests within the broader region, notably downstream of the PTMA. The Skii km Lax Ha are also asserting claim of an area covering
the mine site and PTMA.
Land Use Setting
The Property is located in an area of northwestern BC known
as the “Golden Triangle”, due to its high mineral potential and the occurrence of several gold projects in the region. For
the past century, land and resource uses in the region have been largely driven by forestry, mining, and mineral exploration, and this
is still true today. A limited amount of commercial and non-commercial recreation also occurs in the region, including hunting, trapping,
fishing, heli-skiing, hiking, and camping.
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Land Use Planning Context
The Project area is subject to the provisions of two land
use plans—the Cassiar Iskut-Stikine Land Resource Management Plan (LRMP) and the Nass South Sustainable Resource Management Plan
(SRMP), developed in partnership with Indigenous groups, government, and non-government interests.
Mineral resource activity, timber harvesting, commercial
recreation and tourism, guide outfitting, hunting, fishing, trapping, and cultural land uses are all allowable activities within these
land use plans.
| 20.2.1 | Overview of Water Management |
An extensive system of water management facilities will be
constructed and maintained throughout the life of the KSM mine to divert fresh (non-contact) water away from disturbed areas and to collect
water that has contacted disturbed areas (contact water) for treatment before release into the environment. Please refer to Section 18.2
of this Report for details of the updated water management plans for KSM.
An overview of the Water Management Plan for operations is
included in Figure 20.1.
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| Figure 20.1 | KSM Mine Site Water Management Schematic |
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| 20.2.2 | Summary of Water Management Plan |
Objectives and Targets
The objectives of the Water Management Plan are to provide
a basis for management of surface water on site including:
| ● | diverting non-contact water around the mine site and PTMA |
| ● | protecting ecologically sensitive areas and resources and avoiding harmful impacts to aquatic life and wildlife habitat |
| ● | providing and retaining water for mine operation |
| ● | defining required environmental control structures |
| · | collecting and treating contact water from the mine site to meet discharge requirements prior to release to the receiving environment. |
The targets intended to optimize the Water Management Plan
to achieve surface water objectives include:
| ● | minimizing the production of contact water by implementation of best management practices and water diversion measures |
| ● | collecting and treating contact water where required in order to meet applicable water quality standards |
| · | implementing and maintaining an on-site monitoring and control system to regulate surface water quantity and quality. |
Legislation and Standards
The Water Management Plan has been developed in accordance
with the following legislation:
| ● | Fisheries Act (RSC 1985, c F-14) |
| ● | Canada Water Act (1985, c. C-11) |
| ● | BC Environmental Management Act (2003) |
| ● | BC Water Sustainability Act (2014) |
| · | BC Water Protection Act (1996) |
Processing and Tailing Management Area
Water management in the PTMA is focused on the construction
of diversion channels to control and divert water in the PTMA catchment area to either South Teigen Creek or North Treaty Creek.
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Monitoring
Monitoring programs will enable KSM mine operators to measure
the success of its management strategies and to identify where additional mitigation is necessary.
Several management plans and monitoring programs include
components that will assist in ensuring the long-term protection of the aquatic environment downstream of Property. Management plans and
monitoring programs will be reviewed and updated as required.
| 20.3.1 | Tailing Management Facility Management and Monitoring Plan |
Tailing produced after the mined ore has passed through a
process of high pressure grinding, flotation, and leaching at the Treaty OPC will be transported by slurry pipeline to the TMF. Conventional
flotation tailing will be stored in two cells, the North Cell and the South Cell. A separate tailing stream consisting of sulphide-rich
CIL residue tailing, produced as a waste product in the cyanide leaching process, will be transported in a pipeline to a fully lined CIL
Lined Pond located in the Centre Cell between the North and South cells, and will operate during the filling of the North and South cells.
The TMF is designed and approved under the environmental assessment approvals to store 2.29 Bt of tailing produced over the 35-year
mine life.
The TMF will ultimately consist of three storage cells retained
by four compacted cyclone tailing dams: the North Dam, the Splitter Dam, the Saddle Dam, and the Southeast Dam. Seepage from the tailing
dams will be collected in seepage collection ponds constructed downstream of the tailing dams.
The tailing dams and associated seepage recovery dams proposed
for the 2022 PFS fall into the category of major dams. Prior to commencing work, plans, operating, and monitoring procedures, developed
in concert with an Independent Geotechnical Review Board, must be submitted for approval by the Chief Inspector of Mines. The Code also
requires supporting plans to address ML ARD, Reclamation and Closure, Emergency Preparedness and Response, and closure cost estimates.
Please refer to Table 22.5 for the cost.
Monitoring
A monitoring program will be developed that will include
requirements for inspection of dams and water control structures and procedures for instrumentation monitoring during the construction,
operation, closure, and post-closure phases. The results of the monitoring program will be reviewed on a regular basis to measure the
success of the management strategies, to compare the recorded data against design criteria, and to identify where design changes or additional
mitigation may be necessary.
A schedule for routine inspection and instrumentation monitoring
will be developed at the time of mine permitting based on the mine construction and operation schedule. Additional inspections of the
dams and water control structures will be undertaken following extreme rainfall events, significant runoff events, or significant earthquake
events.
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The TMF will remain in operation after the end of mining
operations until such time as the quality of the water stored in the impoundment reaches an acceptable level for discharge and reclamation
is completed. The dam and associated facilities will require ongoing monitoring and maintenance to ensure dam safety and to meet regulatory
requirements for dam safety.
In the event of temporary mine closure, visual inspection
and maintenance of the dams, diversion channels, collection ditches, and spillways will be required.
| 20.3.2 | Best Available Tailings Technology Assessment |
KSMCo recently completed an assessment of tailing technologies,
tailing facility locations, and management practices. The assessment was an update of the tailing alternative assessment that was completed
as part of the Application/EIS and the Schedule 2 Amendment process and subsequently re-completed in 2015–16 to ensure that the
appropriate tailing technology had been selected (see Chapter 33 and Appendix 33-B of the Application/EIS; https://ksmproject.com/bat-report/
and KCB 2016a).
| 20.3.3 | Waste Rock Management |
The proposed management of waste rock is outlined in the
Rock Storage Facilities Management and Monitoring Plan, which can be found in Volume 26 of the Application/EIS (Rescan 2013).
Waste rock from open pit and underground mining operations
that is not used for construction purposes will be consigned to the Mitchell RSF located in the Mitchell Creek Valley. All waste rock
placed in the Mitchell RSF is assumed to be potentially acid generating. The total amount of mine waste rock to be removed during open
pit excavations at the Mitchell/East Mitchell pit, and Sulphurets pit, is approximately 3 Bt over the LOM.
NPAG mine waste rock removed from the Mitchell P8 Quarry
on the north Mitchell pit wall during pre-production will be used to construct the basal drain beneath the Mitchell RSF, and it will be
used as rockfill material in the construction of the WSD.
The RSF proposed for 2022 PFS fall into the category of a
major dump as defined under Section 10.5.5 of the Code (BC EMLI 2021).
A set of detailed mine development and reclamation plans
will be submitted at a later date as part of the Mine Plan and Reclamation Program Permit application. The following sections outline
the general provisions included in these documents in terms of RSF operation and monitoring.
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Closure
For long-term stability and reclamation purposes, the slopes
of the Mitchell RSF will be re-contoured at closure. The modifications to the RSF areas will include:
| ● | re-contouring the Mitchell slopes below an elevation of 1,100 m (treeline) to an overall slope of 2H: 1V (27°) with a 50
cm soil cover and vegetated |
| ● | re-contouring the western face of the Mitchell RSF below an elevation of 840 m |
| ● | above the treeline, higher benches are proposed to be left un-vegetated to reflect existing talus slopes present in the Mitchell valley. |
Please refer to the Application/EIS (Volume 26) (Rescan
2013) for further details.
Post-closure
The post-closure phase includes complete reclamation of the
RSF and continued treatment of water collected in the WSF until the water quality meets acceptable standards for direct discharge to the
environment. At that time, all facilities will be decommissioned and flows downstream of the mine site will be restored to pre-mine conditions.
| 20.3.4 | Domestic and Industrial non-hazardous and hazardous Waste Management |
The proposed management of domestic and industrial waste,
including hazardous and non-hazardous waste and dangerous goods, is outlined in the Domestic and Industrial Waste Management Plan and
Dangerous Goods and Hazardous Materials Management Plan, (Waste Management Plans) which can be found in the Application/EIS (Volume
26) (Rescan 2013).
Landfills
Two landfills will be established, one in the Mitchell OPC
and one in Treaty OPC. The landfills will be used to dispose of only solid inert, non-reactive waste such as used conveyor belts, empty
dry latex paint cans, grinding balls, air filters, non-recyclable plastics, and incinerator ash. To deter wildlife attraction to the landfill,
the landfill will be fenced and only solid inert waste that will not act as a wildlife attractant will be deposited there. The waste will
be periodically covered with not potentially acid generating waste rock or local till to prevent wind loss and to mitigate wildlife attraction.
Hazardous Waste
Hazardous waste will be produced in all phases. It includes
materials such as waste oil, laboratory chemicals and solvents, lead-acid batteries, oil filters, and used oily rags and absorbent pads.
The Hazardous Waste Regulation (BC Reg. 63/88) under the
Environmental Management Act (2003) defines “hazardous waste” (see Volume 26 of the Application/EIS for additional
details). Any updates on hazardous waste management since the Application/EIS can be found in Section 18.0 of this Report.
| Seabridge Gold Inc. | 20-16 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
Closure and Decommissioning
Activities during the closure phase will be similar to the
activities during the construction phase. A range of materials will become available for salvage, recycling, or disposal with the
dismantling and removal of buildings, surface structures, fuel tanks, etc. The Reclamation and Closure Plan will cover the closure, reclamation,
and decommissioning of the mine infrastructures in detail.
Waste Management during Closure
Significant amounts of waste will be generated from the dismantling
of buildings and process-related materials. The approach for waste management during closure will be to identify feasible salvage and
recycling options.
Upon closure, the buildings, facilities, and process equipment
will be dismantled and either disposed of at the site landfill (inert non-reactive materials only) or removed from the site for recycling
and/or disposal. Any equipment or materials with market value will be removed for capital recovery.
| 20.4 | Air Quality Management including Greenhouse Gases |
The proposed management of air quality, including greenhouse
gases, is outlined in the Air Quality Management Plan and Greenhouse Gas Management Plan, which can be found in the Application/EIS
(Volume 26) (Rescan 2013). Under the Canadian Environmental Protection Act (CEPA) the operating mine will be required to
report to the federal National Pollutant Release Inventory program.
| 20.5 | Environmental Management System |
KSMCo has developed a conceptual Environmental Management
System (EMS) and associated Environmental Management Plans for KSM. As stated in the KSM Project AIR document approved by the British
Columbia Environmental Assessment Office (BC EAO; 2011), Environmental Management Plans are essential for the EMS for any major development.
An EMS is a requirement of a Mines Act Permit for
mines in BC and is the high level framework supporting each Environmental Management Plan. Environmental Management Plans are the specific
and detailed goals, objectives, and procedures for the protection of worker health and safety, environmental monitoring, and operating
procedures that show the regulatory agencies how legislation and regulations will be met at the mine site and the PTMA. Environmental
Management Plans are managed collectively under the umbrella of the EMS.
Environmental Management Plans are to be applied during the
planning, construction, operation, closure, and post-closure phases of KSM.
| Seabridge Gold Inc. | 20-17 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| 20.6 | Closure and Reclamation |
Closure and reclamation planning for KSM will contribute
to the success of closure and reclamation during mining and at the end of mine life, which will reduce the need to restructure the infrastructure
components, limit the amount of material re-handling, and reduce the environmental effects. Mine development and operation will incorporate
techniques to minimize surficial disturbance and, where possible, progressively reclaim areas affected during construction and operation.
Stabilizing and rehabilitating surfaces will reduce the potential for degradation of the resources due to extended exposure to climatic
factors, reducing closure-related capital costs at the cessation of mining activities. The final mine closure plan will be developed during
mine operations prior to closure with full involvement of regulatory agencies, Indigenous communities, and other stakeholders.
| 20.6.1 | Closure and Reclamation Objectives |
The conceptual closure and reclamation plan has three objectives
that provide assurance to the Province that the site will be left in a condition that will limit the future liability to the people of BC:
| ● | to provide stable landforms |
| ● | to re-establish productive land use |
| ● | to protect terrestrial and aquatic resources. |
Provision of Stable Landforms
The design of KSM’s permanent mine-related landforms,
such as the open pits, the TMF, the WSD that will impound the WSF at the mine site, seepage containment dams, and the RSF, has been undertaken
to ensure long-term stability during mine operations, after mine closure, and after reclamation works are complete.
Re-establishment of Productive Land Use
The pre-development land use and conditions form the basis
for setting the end land use and capability objectives. The goal is to return the site to a use consistent with the current land uses.
The current land use information has been obtained from the environmental and socio-economic baseline studies (Appendix 23-A of
the Application/EIS) (Rescan 2013). These studies were undertaken in consultation with the KSM Project EA Working Group which includes
provincial and federal government agencies, Nisga’a Nation, Tahltan Nation, Gitxsan Nation, Skii km Lax Ha, and the Gitanyow
First Nation.
The end land use objective will be primarily to provide for
wildlife habitat for the described wildlife species, including bears, mountain goats, and moose.
| Seabridge Gold Inc. | 20-18 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
The general goal of reclamation is to restore, where possible,
the equivalent land capability so that end land use objectives can be achieved. Site reclamation planning will include the conservation
of soil materials suitable for reclamation purposes in areas disturbed by mining, and these areas will be re-vegetated, where feasible.
The landforms resulting from KSM mine development will also be designed, where possible, and reclaimed to accommodate the desired end
land use objective, involving development of appropriate and functional ecosystems, as supported by appropriate soil material handling
and re-vegetation strategies.
| 20.6.3 | Closure and Reclamation Planning |
Mitchell/East Mitchell Pit Closure
In the 2022 PFS, the Mitchell deposit is proposed to be mined
as an open pit from Year -2 to Year 24, with an ultimate wall height of
1,230 m. Closure of the Mitchell pit includes backfilling with water to form a pit lake and placing large rocks on the benches to discourage
wildlife access to the pit lake. The Mitchell pit cannot be backfilled with water until underground mining is completed. The East Mitchell
pit receives waste from the final mining phase of the Mitchell pit and the East Mitchell pit will be graded to allow positive drainage
to the Mitchell pit lake.
Sulphurets Pit Closure
The Sulphurets pit will be backfilled with the waste rock
from the Mitchell pit to a level that creates positive drainage to the WSF.
Mitchell
OPC
Closure
At the completion of mining, the Mitchell OPC will be decommissioned.
Equipment will be removed from the site. The electrical substation will remain. All other structures will be dismantled and removed. Foundations
will be broken up, and the concrete rubble will be buried on site. Any soils that are contaminated with fuel will be excavated and treated
at a landfarm to remediate the soil.
Reclamation
The Mitchell OPC ground surface will be ripped and covered
with crushed rock and up to 50 cm of topsoil prior to re-vegetation with native species.
McTagg Diversion Tunnels Closure
The McTagg Power Plant will be located east of the Gingras
Creek bridge and will be maintained indefinitely to generate electricity. The electricity will be used to operate the HDS WTP, or sold
for use in the provincial electricity grid.
Water Storage Facility and Water Treatment
Plant
The WSF will remain in service after mine closure to continue
collecting contact water that requires treatment.
| Seabridge Gold Inc. | 20-19 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
The HDS WTP and support infrastructure will remain in operation
during the closure and post-closure phases. The plant will operate primarily in the spring, summer, and fall months, and minimally in
the winter. The lime material will be transported to the site and consumed during these warmer periods. At closure and post-closure,
the filter cake (sludge) will be hauled by truck during the summer to the top of the RSF and placed in an engineered landfill.
An ion exchange Selenium WTP located near the WSD will remain
in service after mine closure, until receiving environment water quality standards can be met without treatment.
At closure and post-closure, the tunnels will be required
to provide ongoing access to the mine site because the CCAR, which serves the mine site during operation, will be decommissioned. As the
HDS WTP will continue to operate post-closure, lime will be required and will be transported from the PTMA through the tunnels to the
mine site. All supplies for monitoring, maintenance, and the operation of the HDS WTP will be transported through the tunnels. The
train logistics system will be reconfigured and simplified to handle this much reduced traffic requirement.
Treaty Process Plant, Carbon-in-Leach Plant,
and Other Structures Closure
Closure
Several structures at the PTMA that will be closed at the
completion of mining including the Treaty Process Plant, the CIL Plant, the Treaty OPC waste management facilities, the Treaty OPC Batch
Plant, the crusher building, and several other structures such as the warehouse and lab. All of these structures contain equipment that
must be removed at closure.
Once all of the equipment has been removed, the buildings
will be dismantled and the materials will be moved off-site for recycling or disposal. Any contaminated soil will be collected and placed
in the landfarm. Any materials that can be incinerated will be incinerated on site. The concrete foundations of the various buildings
will be broken up, buried, and used for road maintenance or as armouring in TMF reclamation. All equipment and debris will be removed
from around the structures.
Reclamation
The footprint areas and the area surrounding the buildings
will be deep-ripped to reduce compaction and to improve surface drainage. Approximately 30 cm of soil will be spread over the area as
the surface material to improve conditions for vegetation establishment and growth of native plants.
Coarse and Fine Ore Stockpiles Closure
Closure
All of the ore in the coarse and fine stockpiles will be
processed. The footprint areas will be cleaned and ripped to reduce compaction and to increase downward drainage.
| Seabridge Gold Inc. | 20-20 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
Reclamation
The footprint areas will be covered with a lime mixture and
topsoil, and then vegetated with native plants as described for the RSF.
Treaty Ore Preparation Complex Batch Plant
Stockpile Closure
The Treaty OPC may contain stockpiled materials left over
from operations consisting of sands and gravels. Any remaining materials will be used for road maintenance or as rip-rap along the beach
edges in the TMF.
Structures Required Post-closure
Some structures in the PTMA will be required for on going
monitoring of mine post-closure. These include:
| ● | the operating camp incinerator |
| ● | the administration building |
| ● | the operating camp (reduced in size from the operation phase). |
As described above, the MTT will remain open because the
HDS WTP will continue to operate post-closure, and reagents, including lime and personnel operating the HDS WTP, will be transported through
the tunnels. A smaller camp will be required to accommodate personnel.
Tailing Management Facility Closure
Following operations, the TMF will be reclaimed to provide
for wildlife and wetland habitat. The dams and beaches of the TMF will be reclaimed in stages, with the North Cell being reclaimed
during operation, the South Cell during closure, and the Centre Cell during post-closure. The TMF facility will be reclaimed in accordance
with the described reclamation and closure plan as follows.
The TMF North Cell will be closed approximately 5 years after
tailing deposition into it ceases following expansion of the beach area and the time for water quality to improve for discharge.
The South Cell will be closed in a similar manner to the
North Cell.
The Centre Cell is the last cell to be closed, which will
be about 5 years following mine closure. The CIL tailing in the CIL lined pond will be covered with approximately 1 m of non-reactive
tailing and submerged under 5 m of water.
| Seabridge Gold Inc. | 20-21 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
Access Roads
Treaty Creek Access Road Closure
During closure and post-closure, the TCAR will provide the
only remaining road access to the Property. All materials and personnel will be transported via the TCAR, which will extend to the Treaty
OPC and the MTT portals, which will all remain open to allow for access to the mine site post-closure.
Coulter Creek Access Road Closure
The CCAR will be decommissioned post-closure. The bridges
will be dismantled, and materials that are combustible will be burned. Concrete will be broken and used as rip-rap along the creeks, if
required, to reduce potential surface erosion that could occur during the dismantling of the bridges.
Culverts will be removed to restore natural drainage patterns.
Cross-ditching will provide drainage across roads and will reduce the potential for surface erosion. The surface of the road and any compacted
areas will be ripped, where required, to promote surface drainage and to reduce runoff and potential road bed failure.
Quarry and Borrow Sources Closure
The borrow areas will be cleared and grubbed. The quarry
and borrow areas will be re-sloped and re-contoured to ensure escape routes for wildlife and to restore natural landscape.
Mini Hydro Plant and Energy Recovery
Energy recovery and a mini-hydro plant at the end of the
McTagg Diversion Tunnel (MTDT) is included in the KSM mine development plan. This plant will generate electrical power by making use of
facilities already included in the 2022 PFS, resulting in significant net energy savings. The power plant will be used to provide electricity
for the mine closure requirements, or the electricity may be sold back to BC Hydro under the Standing Offer Program.
Water Treatment Plant Energy Recovery
Water pumped from the water storage pond to the HDS WTP will
generate electric power. A small impulse Turgo-type turbine will be used. The output may be fed into the plant power distribution system
at the HDS WTP. This facility will continue to operate after mine closure.
Operation Camps
Closure
The Mitchell Operating Camp and the Treaty Operating Camp
will generally include portable trailers, an incinerator, materials and equipment storage areas, a helicopter pad, a helicopter fuelling
area, fuel storage, a septic field, water/sewage treatment, and diesel generators. The portables will be set up so that they can be dismantled
and used at the different sites, as required.
| Seabridge Gold Inc. | 20-22 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
The operation camp sites will be reclaimed to a slope compatible
with the surrounding natural topography. Any contaminated soils will be relocated to the landfarm. The high traffic areas will be ripped
in two directions to increase surface drainage and to allow for deeper root penetration. All construction camps will be decommissioned
and reclaimed during early operations.
Reclamation
Prior to construction, topsoil will have been salvaged from
the camp site areas and stockpiled along the edges of the camps. At closure, this soil will be spread over the disturbed areas. These
areas will then be re-vegetated with the native grasses, shrubs, and tree seedlings that were described for the RSF.
| Seabridge Gold Inc. | 20-23 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| 21.0 | Capital and Operating Cost Estimates |
| 21.1 | Initial Capital Costs |
An initial capital cost of US$6.432 billion was estimated
for the 2022 PFS, based on capital cost estimates developed by the following consultants:
| ● | MMTS: open pit mining, mine roads, ore trains, and infrastructure and water diversion tunnels |
| ● | Kamburt Civil Consulting Ltd. (KCC): costing of civil earthworks related to the TMF, designed by KCB |
| ● | EBC Inc. (EBC): costing of the WSD, designed by KCB |
| ● | Tetra Tech: process plant and associated infrastructure, including plant site preparation, water treatment plant, construction camps
and main access roads |
| ● | Brazier: permanent power supply, fire detection, mini hydro plant, and energy recovery systems |
| ● | BGC: landslide management, avalanche management, and pit depressurization |
| ● | Seabridge: Owner’s and fish compensation costs. |
All currencies in this section are expressed in US dollars,
unless otherwise stated. Costs have been converted using a fixed currency exchange rate of US$0.77 to Cdn$1.00.
The expected accuracy range of the capital cost estimate
is +25/-10%.
The costs stated in Table 21.1 include only initial capital,
which is defined as all costs to build the facilities that mine, transport, and process ore to produce first concentrate and doré.
Costs incurred during ramp-up of the mine and process plant in Year 1, through commercial production, are included in the operating costs
in Section 21.3.
This estimate was prepared with a base date of Q1/Q2 2022.
The estimate does not include any escalation past this date. Budget quotations were obtained for major equipment; vendors provided equipment
prices, delivery lead times, spare allowances, and freight costs to a designated marshalling yard in northern BC, with some exceptions
for delivery points to different BC locales. The quotations used in this estimate were obtained in Q1/Q2 2022, and are budgetary and non-binding.
For non-major equipment, costing is based on in-house data,
quotes from previous studies. No cost escalation is included.
| Seabridge Gold Inc. | 21-1 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
All equipment and material costs include Incoterms FCA. Other
costs such as spares, taxes, duties, freight, and packaging are covered separately in the estimate as indirect costs.
The initial capital cost summary and its cost breakdown structure
(CBS), which is based on the work breakdown structure (WBS) for the 2022 PFS, are presented in Table 21.1.
| Table 21.1 | Initial Capital Cost Summary |
Major
Area
No. |
Major Area Description |
Cost
(US$ M) |
| 1 – Direct Costs |
| 1.1 |
Mine Site |
1,420 |
| 1.2 |
Process |
2,004 |
| 1.3 |
TMF |
513 |
| 1.4 |
Environmental |
15 |
| 1.5 |
On-site Infrastructure |
39 |
| 1.6 |
Off-site Infrastructure |
76 |
| 1.7 |
Permanent Electrical Power Supply and Energy Recovery |
121 |
| Total Direct Costs |
4,188 |
| 2 – Indirect Costs |
| 2.91 |
Construction Indirect Costs |
565 |
| 2.92 |
Spares |
55 |
| 2.93 |
Initial Fills |
26 |
| 2.94 |
Freight and Logistics |
110 |
| 2.95 |
Commissioning and Start-up |
7 |
| 2.96 |
EPCM |
299 |
| 2.97 |
Vendor’s Assistance |
29 |
| Total Indirect Costs |
1,091 |
| 3 – Owner’s Costs |
| 3.98 |
Owner’s Costs |
204 |
| 4 – Contingency |
| 4.99 |
Contingency |
949 |
| 2022 PFS Capital Cost Total |
6,432 |
| Note: | Costs have been rounded to the nearest million dollars. |
The following items are not included in the capital cost
estimate:
| ● | substantial start (early works to develop site access and construct permanent infrastructure) |
| ● | schedule delays, such as those caused by: |
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| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| q | unidentified ground conditions |
| q | environmental permitting activities |
| q | abnormally adverse weather conditions |
| ● | receipt of information beyond the control of the EPCM contractors |
| ● | salvage value for assets only used during construction |
| ● | cost of financing (including interests incurred during construction) |
| ● | sales taxes (PST, GST and HST) |
| ● | royalties or permitting costs, except as expressly defined |
| ● | schedule acceleration costs |
| ● | abnormal price fluctuations due to pandemic, geopolitical instability or interruptions in logistics, supply chain and world trade.
working capital |
| ● | cost of this study and future feasibility study |
| ● | escalations beyond effective date of this study |
| ● | growth factors in design and engineering |
| ● | uncertainties in geotechnical or hydrogeological conditions |
Labour Rates
A standard labour rate has been applied to various areas
of the 2022 PFS. The standard construction labour rate used is US$83.93/h (Cdn$109.00/h) and is considered fully burdened. The base labour
rate of US$34.50 (Cdn$44.81) was calculated from a combination of union rates and current labour rates at operating mines in BC published
by the unions and BC Labour Relations Board, and across all construction crafts.
Mine Site
The Mine Site initial capital costs totals US$1.420 billion
as presented in Table 21.2.
| Seabridge Gold Inc. | 21-3 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
Table 21.2 Mine Site Capital Costs
Area
No. |
Area Description |
Cost
(US$ M) |
| 1.1.01 |
Open Pit Mining |
635 |
| 1.1.02 |
WSF |
289 |
| 1.1.03 |
Surface Water Management Including Water Diversion Tunnels) |
275 |
| 1.1.04 |
Water Treatment |
110 |
| 1.1.05 |
Ancillary Buildings |
11 |
| 1.1.06 |
Site Services and Utilities |
6 |
| 1.1.07 |
Power Supply and Distribution |
8 |
| 1.1.08 |
Camps |
53 |
| 1.1.13 |
Geohazards |
34 |
| Mine Site Capital Costs Total |
1,420 |
| Note: | Costs have been rounded to the nearest million dollars. |
Open Pit Mining
Open pit capital costs were derived from a combination of
supplier quotes and historical data collected by MMTS. Pre-production operating costs of the mining fleet and earth works for pioneering
and construction quarries are included in the open pit mining capital.
Water Storage Facility and Surface Water Management
The WSF capital cost was estimated at US$288.5 million.
The main dam structure is the largest cost at US$148.5 million. The capital cost of surface water management, including water diversion
tunnels (MDT and MTDT), is US$275 million.
Process
The battery limits for process are the Mitchell OPC (primary
crusher), the MTT (including Saddle), trains, and the Treaty OPC (crushing, grinding, flotation and leaching equipment; the concentrator
and other Treaty OPC buildings). TMF costs are separate from process costs. Process capital costs were estimated at US$2,004 million.
TMF
TMF capital costs were estimated at US$513.3 million. Initial
capital comprises initial TMF perimeter diversions; the North Dam, Splitter Dam, and Saddle Dam; and associated seepage collection dams
that form the North and Centre cells. This includes basin preparation for the starter basins for the North Cell and Centre Cell, preparing
and lining the starter basins, and provision of liner drainage. Details of process and OPC capital costs are presented in Table 21.3.
| Seabridge Gold Inc. | 21-4 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
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Table 21.3 Process-Treaty OPC
Capital Cost Estimate
Area
No. |
Area Description |
Cost
(US$ M) |
| 1.2.01 |
Primary Crushing |
56 |
| 1.2.02 |
Ore Delivery Tunnel |
649 |
| 1.2.05 |
MTT Material Transportation |
307 |
| 1.2.06/07 |
TWTP– Saddle & Treaty |
8 |
| 1.2.08 |
Treaty OPC – Coarse Ore Stockpile |
137 |
| 1.2.09 |
Treaty OPC – Secondary Crushing |
100 |
| 1.2.11 |
Treaty OPC – Tertiary Crushing - HPGR |
102 |
| 1.2.12 |
Process Building |
106 |
| 1.2.13 |
Primary Grinding |
102 |
| 1.2.14/15 |
Flotation |
75 |
| 1.2.16 |
Pyrite Concentrate Regrinding |
29 |
| 1.2.17 |
Cyanide Leaching |
74 |
| 1.2.18 |
Gold/Silver Refinery |
14 |
| 1.2.19 |
Copper Concentrate Handling |
13 |
| 1.2.20/21 |
Molybdenum Flotation, Leaching & Concentrate Handling’ |
10 |
| 1.2.22 |
Cyanide Recovery and Destruction |
35 |
| 1.2.23 |
Reagent Area |
7 |
| 1.2.24 |
Plant Control System |
5 |
| 1.2.25 |
Site Services and Utilities |
26 |
| 1.2.27/30 |
Treaty Temporary Laydown & Ancillary Buildings |
39 |
| 1.2.31 |
Process Plant Utilities and Infrastructure |
21 |
| 1.2.32 |
Treaty OPC – Mobile Equipment |
11 |
| 1.2.33 |
Power Supply and Distribution |
7 |
| 1.2.34 |
Treaty OPC – Roads |
3 |
| 1.2.35 |
Treaty Operations and Construction Camps |
67 |
| Process-Treaty OPC Capital Cost Total |
2,004 |
| Note: | Costs have been rounded to the nearest million dollars. |
Indirect costs for the initial capital cost estimate were
estimated at US$1,091 million, as shown in Table 21.4.
| Seabridge Gold Inc. | 21-5 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
Table 21.4 Indirect Capital Costs
Area
No. |
Area Description |
Cost
(US$ M) |
| 2.91 |
Construction Indirect Costs |
565 |
| 2.92 |
Spares |
55 |
| 2.93 |
Initial Fills |
26 |
| 2.94 |
Freight and Logistics |
110 |
| 2.95 |
Commissioning and Start-up |
7 |
| 2.96 |
EPCM |
299 |
| 2.97 |
Vendor’s Assistance |
29 |
| Indirect Capital Costs Total |
1,091 |
| Note: | Costs have been rounded to the nearest million dollars. |
An estimate of US$204 million is included in the initial
capital cost estimate for Owner’s costs. This cost had been calculated by Seabridge from first principals based on personnel requirements
and onboarding of Owner’s staff for supporting both the latter part of the commissioning effort for construction and onboarding to fill
all operations and G&A departments. In addition to labour costs. Owner’s costs include IROCs, off-site office staffing, off-site office
facilities, travel, off-site office general expenses, recruiting and training expenses, consulting, insurance, general field expenses,
and mineral lease/claims costs. Environmental department in the Owner’s costs include environmental monitoring programs, community
relations, communication and public relations, wetland compensation, and permitting costs.
A contingency allowance is included to cover additional costs
that could occur as a result of more detailed design or unexpected site conditions. The estimated contingency cost is US$949 million.
The contingency estimate was developed on a line-item basis to account for the specific design details and information available for each
area, rather than a single value applied to the sum of all directs and indirects. The values applied range from 9% to 25%.
| 21.2 | Sustaining Capital Costs |
The sustaining capital costs are all capital costs required
from Year 1 of operations to sustain the mining operation for the LOM. Details of the total sustaining cost of US$3.210 billion, required
for the LOM, is presented in Table 21.5.
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| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
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Table 21.5 Sustaining Capital
Costs
Major Area
No. |
Major Area Description |
Cost
(US$ M) |
| 1.1 |
Mine Site |
1,766 |
| 1.2 |
Process (includes process buildings and utilities) |
309 |
| 1.3 |
TMF (incl. East Catchment Tunnel) |
630 |
| 1.4 |
Environmental |
8 |
| 1.6 |
Off-site Infrastructure |
11 |
| 1.7 |
Permanent Electrical Power Supply and Energy Recovery |
46 |
| 2.91 |
Construction Indirects |
49 |
| 2.92 |
Spares |
23 |
| 2.94 |
Freight and Logistics |
7 |
| 2.95 |
Vendor’s Assistance, Commissioning & Start-up |
18 |
| 2.96 |
EPCM |
1 |
| 4.99 |
Contingency |
343 |
| Sustaining Capital Cost Total |
3,210 |
| Note: | 1. Costs have been rounded to the nearest million dollars. |
| | | 2. Mine Site costs include surface water
management and diversion tunnels. |
| | | 3. Process costs include MTT and ore
transport train system costs |
The sustaining capital for the Mine Site is US$1.766 billion
presented in Table 21.6. This number covers the direct capital costs for the LOM and includes all open pit and underground mining operations,
as well as the Selenium WTP and the geohazards direct capital cost.
Table 21.6 Mine Site Sustaining
Capital Costs
Area
No. |
Area Description |
Cost
(US$ M) |
| 1.1.01 |
Open Pit |
1,454 |
| 1.1.03 |
Surface Water Management |
114 |
| 1.1.04 |
Water Treatment |
120 |
| 1.1.05 |
Ancillary Buildings |
47 |
| 1.1.12 |
Sulphurets Pit Power Supply |
2 |
| 1.1.13 |
Geohazards |
29 |
| Mine Site Sustaining Capital Cost Total |
1,766 |
| Note: | Costs have been rounded to the nearest million dollars. |
Sustaining capital is based on both fleet expansions and
unit replacements over the LOM. Major fleet expansions were planned for Years 1 and 24 as the mining rate and haul distances increase.
Capital replacement costs for mobile equipment were calculated based on the expected life of the equipment, the cost of the unit, and
the utilization for that equipment.
| Seabridge Gold Inc. | 21-7 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| 21.2.3 | Mine Site Water Treatment |
HDS WTP
The sustaining water treatment cost for the Mine Site is
US$120 million.
The water treatment capacity at the HDS WTP will increase
with the addition of one more clarifiers to cater for the increased water flow that is expected.
When the HDS WTP is commissioned in Year -2, the initial
maximum throughput capacity will be 3.0 m3/s.
In Year 1, the plant capacity will increase to 4.0 m3/s
final capacity. One additional circuit will be constructed and operated in parallel to the existing three circuits.
Selenium WTP
The sustaining capital cost of the Se WTP is US$134 million.
In Year 5, a 500 L/s Selenium WTP, located adjacent
to the WSF near the toe of the Mitchell RSF, will be constructed and become operational to treat seepage from select pit sources, seepage
from the RSFs, and water pumped from the WSF.
Process sustaining capital costs include the Sulphurets pit
primary crusher in Year 1, and the expansion of the process plant that is designed to increase throughput to 195,000 tpd by Year 3.
Additional trains are included for the increase in MTT material
transport and for the decline in mechanical availability over time.
The estimate also includes a replacement allowance for major
process equipment.
The process sustaining capital cost was estimated at US$309 million.
| 21.2.5 | Tailing Management Facility |
The sustaining capital for the TMF is US$630 million.
Dam raising for the North and Centre cells is accounted for
in both sustaining capital and operating expenses. Borrow, haul, and placement of till core and expansion of basin preparation, drains
and CIL Residue Cell liner are considered sustaining capital that begin in Year 1. The processing and placement of cycloned sand is considered
an annual operating expense for all stages through the LOM.
The South Cell includes additional sustaining capital items
occurring between Year 16 and the LOM. These include development of additional perimeter diversions for the South Cell and the Southeast
Starter Dam and associated seepage dam.
| Seabridge Gold Inc. | 21-8 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
Ancillary expenses such as seepage pumping and monitoring
are included as operating expenses throughout the LOM.
| 21.2.6 | Other Sustaining Capital Costs |
Other sustaining capital costs were estimated at US$57 million,
mostly consisting of fish habitat compensation, site access road and permanent power supply. The indirect sustaining capital costs were
estimated at US$97 million and sustaining capital contingency costs were estimated at US$343 million.
The average operating cost was estimated at US$11.20/t milled
at the final nameplate process rate of 195,000 t/d, or US$11.36/t for the LOM average. The operating cost estimate accounts for the
energy recovery credits (approximately US$0.07/t milled LOM) from mini-hydro power stations and the cost estimated for PST (approximately
US$0.13/t milled LOM).
The mining operating costs are LOM average unit costs calculated
by dividing the total LOM operating costs by LOM milled tonnages. The costs exclude mine pre-production costs.
The cost distribution for each area is shown in Figure 21.1,
excluding the energy recovery credits from the recovered hydro-energy during mining operations and the applicable PST.
The operating cost estimates in this section are based on
budget prices obtained in Q1/Q2 2022 and/or from databases of the consulting firms involved in preparing the operating cost estimates.
When required, certain costs in this report have been converted
using a fixed currency exchange rate of Cdn$1.00 to US$0.77. The expected accuracy range of the operating cost estimate is +25/-10%. A
summary of the operating costs is presented in Table 21.7.
| Seabridge Gold Inc. | 21-9 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
Table 21.7 Operating Cost Summary
| |
At the Nominal Feed
Rate of 195,000 t/d* |
LOM
Average
(US$/t
milled) |
| (US$ M/a) |
(US$/t milled) |
| Mine |
| Mining Costs – Mill Feed |
235.6 |
3.31 |
3.31 |
| Mill |
| Process |
437.6 |
6.15 |
6.31 |
| G&A and Site Service |
| G&A |
51.2 |
0.72 |
0.75 |
| Site Service |
22.0 |
0.31 |
0.31 |
| TMF and SWM |
| TMF Dam Management |
7.5 |
0.11 |
0.11 |
| Selenium Water Treatment |
19.6 |
0.28 |
0.25 |
| HDS Water Treatment |
15.3 |
0.22 |
0.22 |
| Mine Site Water Pumping |
2.2 |
0.03 |
0.03 |
| Energy Recovery |
-4.8 |
-0.07 |
-0.07 |
| Provincial Sales Tax |
9.6 |
0.14 |
0.14 |
| Total Operating Cost |
795.8 |
11.20 |
11.36 |
| Note: | The nominal feed rate estimate excludes mine operating costs
and is based on a mill feed rate of 195,000 t/d; the costs do not reflect higher unit costs late in the mine life when the mill feed
rates are lower. Costs have been rounded to the nearest hundred thousands of dollars. |
| Figure 21.1 | Operating Cost Distribution |
Source: Tetra Tech, 2022
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| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
Sustaining capital costs including all capital expenditures
after process plant first production are excluded from the operating cost estimate.
Mining Personnel
Salaries for the supervisory and administrative job categories,
and all hourly employee labour rates, are based on an industry-focused and location-specific labour survey conducted by Seabridge. Burdens
are included in the salaries and labour rates. The payments include base salaries/labour rates, holiday and vacation pay, government prescriptive
benefits (e.g., Canadian Pension Plan, workman compensation insurance, etc.), discretionary employer sponsored benefits, and tool allowance
costs.
Labour factors in man-hours/equipment operating hours were
estimated for operations and maintenance labour for each of the equipment types. Labour costs were calculated by multiplying the labour
factor by the equipment operating hours, and labour costs were allocated to the equipment where labour had been assigned. The total hours
required for each job type on all the equipment were added, and any additional labour required to complete a crew was assigned to an unallocated
labour category.
Process Personnel
Salary/wage rates for management, technical support and operation
are based on an industry-focused and location-specific labour survey conducted by Seabridge. Burdens are included in the salaries and
labour rates. The payments include base salaries/labour rates, holiday and vacation pay, government prescriptive benefits (e.g., Canadian
Pension Plan, workman compensation insurance, etc.), discretionary employer sponsored benefits, and tool allowance costs.
| 21.3.1 | Open Pit Mine Operating Costs |
Open pit mine operating costs, including operating and maintenance
salaried staff and hourly labour, equipment major component and running repairs, fuel, power (excluding trolley power for the trucks),,
and all other consumable goods, were derived from a combination of supplier quotes and historical data collected by MMTS. The quantities
of consumables required were determined for each specific open pit mining activity from vendor input and in-house experience. Labour factors
for operations and maintenance of the open pit mining equipment was also estimated based on vendor input and MMTS experience. These inputs
were used to build up open pit mine operating costs from first principles.
Freight costs for all consumable goods and fuel are included
in the estimate as part of the budgetary quotations.
Major component replacement for larger pieces of mobile equipment
were calculated based on the expected life of the major component, the cost of the component, and the fleet size for that equipment. This
puts large component repair costs into future years, giving a more representative LOM cash flow.
| Seabridge Gold Inc. | 21-11 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
The cost of minor parts and running repairs were estimated
as an hourly operating cost for the mining equipment. The cost of geotechnical support works for mine operations is included in the mining
operating costs.
GME is a category for open pit mine operations, mine maintenance,
and technical services departmental overhead costs. It consists of costs for all salaried supervisory and technical staff, a consumable
and rental allowance, crane rentals, and software and fleet management systems’ licensing and maintenance. This category is a fixed
cost, and does not vary by production or fleet size, with the exception of ramp-ups to full staffing.
The distribution of unit cost by mining area is shown in
Figure 21.2.
| Figure 21.2 | LOM Average Unit Operating Cost for Open Pit Mining
(US$/t Material Mined) – excludes mine pre-production costs |
Source: Tetra Tech, 2022
| 21.3.2 | Process Operating Costs |
Summary
The LOM average annual process operating costs for the different
mineralizations were estimated as:
| ● | Mitchell mineralization: US$433 million (US$6.08/t milled) |
| ● | East Mitchell mineralization: US$440 million (US$6.19/t milled) |
| ● | Sulphurets mineralization: US$455 million (US$6.39/t milled). |
The process operating costs for these mineralizations are
based on a process rate of 195,000 t/d and 94% plant availability. The estimated average operating cost for the Sulphurets ore is
higher than the ores from the Mitchell deposits, mainly due to harder mineralization for the Sulphurets ore, as compared to the Mitchell
deposits. Due to the variations in operating costs for the different deposit ores, the average operating costs were estimated based on
the ratio of the different ore tonnages processed and their individual operating costs.
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The estimated process operating costs are summarized in Table
21.8 and Table 21.9, which include:
| ● | personnel requirements, including supervision, operation and maintenance; salary/wage levels based on an industry-focused and location-specific
labour survey conducted by Seabridge, the payments include base salaries/labour rates and various burdens |
| ● | liner and grinding media consumption estimated from the Bond ball mill work index and abrasion index equations; maintenance supplies
are based on approximately 6% of major equipment capital costs |
| ● | reagents based on metallurgical test results |
| ● | Ore transport train maintenance |
| ● | other operation consumables including laboratory, filtering cloth, and service vehicles consumables |
| ● | power consumption for the process plant |
| ● | no taxes or import duties are included in the process operating cost estimate, unless specified.
|
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| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
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Table 21.8 Summary of Process Operating
Costs by Deposit
| Area |
Personnel |
Mitchell |
Sulphurets |
East Mitchell |
|
Annual Cost
(US$ M) |
Unit Cost
(US$/t
milled) |
Annual Cost
(US$ M) |
Unit Cost
(US$/t
milled) |
Annual Cost
(US$ M) |
Unit Cost
(US$/t
milled) |
| Human Power |
| Operating Staff |
43 |
5.3 |
0.07 |
5.3 |
0.07 |
5.3 |
0.07 |
| Operating Labour |
152 |
13.3 |
0.19 |
13.3 |
0.19 |
13.3 |
0.19 |
| Maintenance |
87 |
8.2 |
0.12 |
8.2 |
0.12 |
8.2 |
0.12 |
| Subtotal Human Power |
282 |
26.7 |
0.38 |
26.7 |
0.38 |
26.7 |
0.38 |
| Major Consumables and Supplies |
| Major Consumables |
| Metal Consumables |
|
118.4 |
1.66 |
135.7 |
1.91 |
125.2 |
1.76 |
| Reagent Consumables |
|
178.8 |
2.51 |
178.8 |
2.51 |
178.8 |
2.51 |
| Supplies |
| Maintenance Supplies |
|
27.5 |
0.39 |
27.5 |
0.39 |
27.5 |
0.39 |
| Operating Supplies |
|
3.2 |
0.04 |
3.2 |
0.04 |
3.2 |
0.04 |
| Subtotal Consumable and Supplies |
327.8 |
4.61 |
345.1 |
4.85 |
334.6 |
4.70 |
| Power Supply |
|
78.5 |
1.10 |
83.2 |
1.17 |
79.1 |
1.11 |
| Subtotal Power |
|
78.5 |
1.10 |
83.2 |
1.17 |
79.1 |
1.11 |
| Process Operating Cost Total |
282 |
433.0 |
6.08 |
455.1 |
6.39 |
440.4 |
6.19 |
| Note: | Sums may not add due to rounding. |
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| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
Table 21.9 Operating Costs per Area
of Operation by Deposit
| Area |
Personnel |
Mitchell |
Sulphurets |
East Mitchell |
|
Annual Cost
(US$ M) |
Unit Cost
(US$/t
milled) |
Annual Cost
(US$ M) |
Unit Cost
(US$/t
milled) |
Annual Cost
(US$ M) |
Unit Cost
(US$/t
milled) |
| Crushing, Grinding and Copper Flotation Plant |
156 |
290.7 |
4.08 |
312.6 |
4.39 |
298.1 |
4.19 |
| Tunnel Transport |
43 |
13.8 |
0.19 |
13.8 |
0.19 |
13.8 |
0.19 |
| Molybdenum Flotation Plant |
8 |
7.6 |
0.11 |
7.6 |
0.11 |
7.5 |
0.11 |
| Leach Plant |
43 |
49.9 |
0.70 |
49.9 |
0.70 |
49.9 |
0.70 |
| Cyanide Solution/Residue Handling |
12 |
62.3 |
0.88 |
62.3 |
0.88 |
62.3 |
0.88 |
| Tailing Pumping/Reclaim Water |
20 |
8.8 |
0.12 |
8.8 |
0.12 |
8.8 |
0.12 |
| Total |
282 |
433.0 |
6.08 |
455.1 |
6.39 |
440.4 |
6.19 |
| Note: | Sums may not add due to rounding. |
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| 21.3.3 | TMF Dam Management Operating Costs |
On average, the operating costs for ongoing tailings dam
construction by cycloning sand, starting from the secondary cyclone station and including seepage water pumping costs, were estimated
to be approximately US$7.7 million/a, or US$0.11/t milled. The other tailings facility construction related costs are included in
sustaining capital costs.
| 21.3.4 | Mine Site Water Management Costs |
Overall SWM at the Mine Site includes HDS site water treatment,
selenium removal treatment, and site water pumping. The average LOM annual cost for Mine Site SWM was estimated to be approximately US$42.6 million/a,
or US$0.52/t milled, at a mill feed rate of 195,000 t/d.
The estimated average LOM operating cost for the HDS WTP
is approximately US$0.22/t milled, at a mill feed rate of 195,000 t/d, or US$0.31/m3 water, treated at an average flow
rate of approximately 49.8 Mm3/a. The maintenance manpower will come from the overall mine site maintenance team. The
major cost for HDS water treatment is reagent consumption at US$0.14/t milled.
The estimated LOM average operating cost for the Selenium
WTP is approximately US$0.27/t milled at a mill feed rate of 195,000 t/d, or US$1.24/m3 water, treated at an average flowrate
of approximately 15.8 Mm3/a. The maintenance manpower will come from the overall site services maintenance team. The major
cost for selenium water treatment is US$0.11/t milled for reagent consumption and maintenance. Power consumption was estimated to be approximately
25.4 GWh/a.
| 21.3.5 | General and Administrative |
G&A costs are costs that do not relate directly to mining
or processing operating costs. These costs include:
| ● | personnel: executive management, staffing in accounting, supply chain and logistics, human resources, external affairs functions,
and other G&A departments |
| ● | expenses : including insurance, off site offices, administrative supplies, medical services, legal services, human resource related
expenses, travelling, community and environmental programs, accommodation/camp costs, air/bus crew transportation, regional and property
taxes, and external assay/testing. |
The G&A costs were estimated at approximately US$39.5 million/a,
or US$0.56/t milled at a nominal mill feed rate of 195,000 t/d, including approximately US$0.25/t for personnel and US$0.47/t for
general expenses. The major costs are accommodation and crew air transportation, estimated at about US$14.5 million/a.
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The overall site service cost was estimated at US$0.31/t
milled or approximately US$22.0 million/a. The estimate is based on requirements for this remote site in northern BC and on in-house
experience. The estimate includes the following:
| ● | personnel: general site service human power |
| ● | site mobile equipment and light vehicle operations |
| ● | potable water and waste management |
| ● | general maintenance for yards, roads, fences, and buildings |
| ● | off site operation expense |
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Tetra Tech prepared an economic evaluation of the 2022 PFS
based on both a pre-tax and a post-tax basis in a single financial model. For the 33-year LOM and 2.292 billion tonne Mineral Reserve,
the following pre-tax financial results were calculated using the 2022 Base Case metal prices:
| ● | 3.4-year payback on US$6.4 billion initial capital |
| ● | US$13.5 billion NPV at a 5% discount rate. |
Seabridge engaged PwC in Toronto, Ontario to review the tax
component of the model for the post-tax economic evaluation for this 2022 PFS with the inclusion of applicable income and mining taxes.
PwC is an Ontario limited liability partnership, which is a member firm of PricewaterhouseCoopers International Limited, each member firm
of which is a separate legal entity.
The following post-tax financial results were calculated:
| ● | 3.7-year payback on US$6.4 billion initial capital |
| ● | US$7.9 billion NPV at a 5% discount rate. |
The 2022 Base Case results apply the following key inputs:
| ● | molybdenum – US$18.00/lb |
| ● | exchange rate – Cdn$1.00 to US$0.77. |
Sensitivity analyses, along with multiple additional metal
price scenarios, were developed to evaluate the 2022 PFS economics.
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| 22.2 | Forward-looking Statements |
This document contains “forward-looking information”
within the meaning of Canadian securities legislation and “forward-looking statements” within the meaning of the United States
Private Securities Litigation Reform Act of 1995. This information and these statements, referred to herein as “forward-looking
statements” are made as of the date of this document. Forward-looking statements relate to future events or future performance and
reflect current estimates, predictions, expectations or beliefs regarding future events and include, but are not limited to, statements
with respect to: (i) the estimated amount and grade of Mineral Reserves and Mineral Resources; (ii) estimates of the capital costs of
constructing mine facilities and bringing a mine into production, of operating the mine, of sustaining capital and the duration of payback
periods; (iii) the estimated amount of future production, both material processed and metal recovered; (iv) estimates of operating costs,
life of mine costs, net cash flow, net present value (NPV) and economic returns from an operating mine; and (vi) the assumptions on which
the various estimates are made being reasonable.
All forward-looking statements are based on the author’s’
current beliefs as well as various assumptions made by them and information currently available to them. These assumptions are set forth
throughout this Report, and some of the principal assumptions include: (i) the presence of and continuity of metals at estimated grades;
(ii) the geotechnical and metallurgical characteristics of rock conforming to sampled results; (iii) the quantities of water and the quality
of the water that must be diverted or treated during mining operations; (iv) the capacities and durability of various machinery and equipment;
(v) anticipated mining losses and dilution; (vi) metallurgical performance; and (vii) reasonable contingency amounts. Although the QPs
consider these assumptions to be reasonable based on information currently available to them, they may prove to be incorrect. Many forward-looking
statements are made assuming the correctness of other forward-looking statements, such as statements of net present value and internal
rates of return, which are based on most of the other forward-looking statements and assumptions herein.
By their very nature, forward-looking statements involve
inherent risks and uncertainties, both general and specific, and risks exist that estimates, forecasts, projections and other forward-looking
statements will not be achieved or that assumptions do not reflect future experience.
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Metal revenues projected in the 2022 PFS cash flow models
are based on the average metal values indicated in Table 22.1.
Table 22.1 Metal Production from
the KSM Mine
| |
Years 1 to 7 |
LOM |
| Total Tonnes to Mill (Mt) |
441 |
2,292 |
| Annual Average Tonnes to Mill (Mt) |
63 |
69 |
| Average Grades |
| Gold (g/t) |
0.89 |
0.64 |
| Copper (%) |
0.21 |
0.14 |
| Silver (g/t) |
3.0 |
2.2 |
| Molybdenum (ppm) |
52 |
76 |
| Total Production |
| Gold (Moz) |
9.89 |
33.90 |
| Copper (Mlb) |
1,756 |
5,872 |
| Silver (Moz) |
26.97 |
97.89 |
| Molybdenum (Mlb) |
14.64 |
140.20 |
| Average Annual Production |
| Gold (Moz) |
1.413 |
1.027 |
| Copper (Mlb) |
250.8 |
178.0 |
| Silver (Moz) |
3,853 |
2,966 |
| Molybdenum (Mlb) |
2.09 |
4.25 |
| 22.3.1 | Financial Evaluations: NPV and IRR |
The production schedule has been incorporated into the 100%
equity financial model to develop annual recovered metal production from the relationships of tonnage processed, head grades, and recoveries.
Metal revenues, principally gold and copper, were calculated
based on each scenario’s prices. Operating cost for mining, processing, site services, G&A, tailing storage and handling and water
treatment, energy recovery areas, as well as off-site charges (smelting, refining, transportation, and royalties) were deducted from the
revenues to derive annual operating cash flow.
Initial and sustaining capital costs as well as closure and
reclamation costs have been incorporated on an annual basis over the mine life and deducted from the operating cash flow to determine
the net cash flow before taxes. Initial capital expenditures include costs accumulated prior to first production of concentrate, including
all pre-production mining costs. Sustaining capital includes expenditures for mining and processing additions, replacement of equipment,
and TMF expansions.
Initial and sustaining capital costs applied in the economic
analysis are US$6.4 billion and US$3.2 billion, respectively. LOM PST applicable to initial and sustaining capital is
estimated to be US$124.7 million.
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Financial evaluations account for physical reclamation costs
at various times in the LOM, for the development of a fund to address water treatment costs post reclamation and for special use securities
associated with permanent access roads.
Working capital is estimated at one month of receivables
and three months of payables and varies from year to year. The working capital will be recovered at the end of the mine life.
Pre-production construction period is estimated to be six
years. NPV and IRR reported in this section are estimated at the start of this six-year period.
| 22.3.2 | Metal Price Scenarios |
The 2022 PFS Base Case uses the three-year average metal
prices as of June 2022 and a US$/Cdn$ exchange rate of 0.77. In addition to the 2022 PFS Base Case, two alternate cases are also presented:
(i) a Recent Spot Case incorporating recent spot prices for gold, copper, silver, and the US$/Cdn$ exchange rate, and (ii) an Alternate
Case that incorporates lower metal prices than used in the Base Case to demonstrate the 2022 PFS sensitivity to lower prices. The input
parameters and pre-tax results of all scenarios are shown in Table 22.2.
| Table 22.2 | Summary of the Pre-tax Economic Evaluations |
| |
Unit |
2022 PFS
Base
Case |
2022 PFS
Recent Spot
Case |
2022 PFS
Alternate
Case |
| Gold |
US$/oz |
1,742.00 |
1,850.00 |
1,500.00 |
| Copper |
US$/lb |
3.53 |
4.25 |
3.00 |
| Silver |
US$/oz |
21.90 |
22.00 |
20.00 |
| Molybdenum |
US$/lb |
18.00 |
18.00 |
18.00 |
| Exchange Rate |
US$:Cdn$ |
0.77 |
0.77 |
0.77 |
| Undiscounted NCF |
US$ million |
38,636 |
46,070 |
27,854 |
| NPV (at 3%) |
US$ million |
20,210 |
24,357 |
14,210 |
| NPV (at 5%) |
US$ million |
13,454 |
16,403 |
9,194 |
| NPV (at 8%) |
US$ million |
7,420 |
9,294 |
4,717 |
| IRR |
% |
20.1 |
22.4 |
16.5 |
| Payback |
years |
3.4 |
3.1 |
4.1 |
| Cash Cost/oz Au |
US$/oz |
275 |
164 |
351 |
| Total Cost/oz Au |
US$/oz |
601 |
490 |
677 |
| |
|
|
|
|
|
| Seabridge Gold Inc. | 22-4 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| 22.4 | Post-tax Financial Evaluations |
Seabridge engaged PwC in Toronto, Ontario to review the tax
component of the model for the post-tax economic evaluation for this 2022 PFS with the inclusion of applicable income and mining taxes.
The following general tax regime was recognized as applicable
in Q3 2022:
| 22.4.1 | Canadian Federal and BC Provincial Income Tax Regime |
The federal and BC provincial corporate income taxes are
calculated using the current enacted rates of 15% and 12% respectively. For both federal and provincial income tax purposes, capital and
resource expenditures are accumulated in tax pools that can be deducted against mine income at different prescribed rates, depending on
the type of capital expenditures.
All pre-production mine development expenses, Canadian resource
property acquisition costs and the costs of mine shafts, main haulage ways, and other underground workings are considered Canadian development
expense (CDE) and are accumulated in the CDE pool. The KSM Financial Model treats all such expenses as CDE.
Fixed assets acquired for the mine are accumulated in an
undepreciated capital cost pool (Class 41) and are generally amortized at 25% on a declining balance basis.
CDE, except for costs with respect to an acquisition of a
Canadian resource property, fixed assets, and Class 14.1 expenditures incurred after November 20, 2018 and before 2028 are eligible for
an enhanced first-year allowance under the Accelerated Investment Incentive measure, which is factored into the KSM Financial Model.
| 22.4.2 | BC Mineral Tax Regime |
The BC Mineral Tax regime is a two-part tax regime, with
a 2% tax and a 13% tax.
The 2% tax is a minimum tax and is applied on “net current
proceeds”, which is defined as gross revenue from the mine less mine operating expenditures. Hedging income and losses, royalties
and financing costs are excluded from operating expenditures. The 2% tax is accumulated in a Cumulative Tax Credit Account (CTCA) and
is fully creditable against the 13% tax.
All capital expenditures, both mine development costs and
fixed asset purchases, and mine operating expenditures are accumulated in the Cumulative Expenditures Account (CEA), which is amortized
at 100% and deductible for the purposes of the 13% tax.
The 13% tax is applicable on “net revenue”, which
is defined as gross revenue from the mine less any accumulated CEA balance to the extent of the gross revenue from the mine for the year.
| Seabridge Gold Inc. | 22-5 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
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A notional interest equal to 125% of the prevailing federal
bank rate is calculated annually on any unused CEA and CTCA and is added to the respective balances.
BC Mineral Tax is deductible for federal and provincial income
tax purposes.
| 22.4.3 | Taxes and Post-tax Financial Results |
At the 2022 Base Case metal prices and exchange rate used
for this study, total estimated taxes payable on KSM profits are US$14.7 billion over the 33-year LOM. The total estimated taxes
payable by the mine in all scenarios provided are shown in Table 22.3.
The post-tax undiscounted annual cash flows are illustrated
in Figure 22.1.
| Figure 22.1 | Post-tax Undiscounted Annual and Cumulative Cash Flow |
Source: Tetra Tech, 2022
| Seabridge Gold Inc. | 22-6 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
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| Table 22.3 | Component of the Various Taxes for all Scenarios |
| |
Unit |
2022 PFS
Base
Case |
2022 PFS
Recent
Spot
Case |
2022 PFS
Alternate
Case |
| Gold |
US$/oz |
1,742.00 |
1,850.00 |
1,500.00 |
| Copper |
US$/lb |
3.53 |
4.25 |
3.00 |
| Silver |
US$/oz |
21.90 |
22.00 |
20.00 |
| Molybdenum |
US$/lb |
18.00 |
18.00 |
18.00 |
| Exchange Rate |
US$:Cdn$ |
0.77 |
0.77 |
0.77 |
| Corporate Tax (Federal) |
US$ million |
5,152 |
6,118 |
3,754 |
| Corporate Tax (Provincial) |
US$ million |
4,122 |
4,894 |
3,003 |
| BC Mineral Tax |
US$ million |
5,429 |
6,427 |
3,963 |
| Total Taxes* |
US$ million |
14,703 |
17,440 |
10,721 |
Note: *Totals may not add up due to rounding.
Post-tax financial results are summarized in Table 22.4.
| Table 22.4 | Summary of Post-tax Financial Results |
| |
Unit |
2022 PFS
Base
Case |
2022 PFS
Spot
Case |
2022 PFS
Alternate
Case |
| Gold |
US$/oz |
1,742.00 |
1,850.00 |
1,500.00 |
| Copper |
US$/lb |
3.53 |
4.25 |
3.00 |
| Silver |
US$/oz |
21.90 |
22.00 |
20.00 |
| Molybdenum |
US$/lb |
18.00 |
18.00 |
18.00 |
| Exchange Rate |
US$:Cdn$ |
0.77 |
0.77 |
0.77 |
| Undiscounted NCF |
US$ million |
23,933 |
28,630 |
17,133 |
| NPV (at 3%) |
US$ million |
12,264 |
14,889 |
8,467 |
| NPV (at 5%) |
US$ million |
7,944 |
9,814 |
5,238 |
| NPV (at 8%) |
US$ million |
4,061 |
5,254 |
2,332 |
| IRR |
% |
16.1 |
18.0 |
13.1 |
| Payback |
years |
3.7 |
3.4 |
4.3 |
Table 22.5 summarizes the 2022 PFS annual cash flow for
the pre-production period, Years 1 to 7, and the LOM, providing mine and mill production, revenue projections, operating costs and capital
costs, and undiscounted cash flows both before and after taxes.
| Seabridge Gold Inc. | 22-7 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| Table 22.5 | 2022 PFS Annual Cash Flow for Pre-production Period,
Years 1 to 7 and LOM1,2 |
| |
Unit |
Pre-prod.
Period |
Production Period |
Years
-6 to -1 |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
Year 6 |
Year 7 |
LOM |
| Mine and Mill Production3 |
| Waste Mined (incl. rehandle) |
Mt |
|
216 |
211 |
87 |
12 |
82 |
78 |
45 |
2,417 |
| Mill Feed Processed |
Mt |
|
38 |
47 |
71 |
71 |
71 |
71 |
71 |
2,292 |
| Grade |
| Gold
(concentrate + doré) |
g/t |
|
0.88 |
0.89 |
1.12 |
0.92 |
0.98 |
0.74 |
0.67 |
0.64 |
| Copper
(concentrate) |
% |
|
0.23 |
0.22 |
0.20 |
0.21 |
0.21 |
0.23 |
0.16 |
0.14 |
| Silver
(concentrate + doré) |
g/t |
|
2.5 |
2.7 |
3.6 |
3.3 |
3.6 |
2.8 |
2.4 |
2.2 |
| Molybdenum
(concentrate) |
ppm |
|
44 |
49 |
49 |
49 |
43 |
54 |
69 |
76 |
| Metal Recovered |
| Copper (concentrate) |
Mlbs |
|
174.7 |
205.4 |
273.6 |
290.8 |
291.3 |
309.0 |
211.0 |
5,872.4 |
| Gold (concentrate + doré) |
Moz |
|
0.9 |
1.1 |
2.0 |
1.7 |
1.8 |
1.3 |
1.2 |
33.9 |
| Silver (concentrate + doré) |
Moz |
|
1.8 |
2.5 |
5.5 |
4.7 |
5.4 |
3.9 |
3.1 |
97.9 |
| Molybdenum (concentrate) |
Mlbs |
|
0.9 |
1.4 |
1.9 |
1.9 |
1.7 |
3.0 |
3.8 |
140.2 |
| Total Revenue (NSR) |
| Copper Concentrate4 |
US$ million |
|
1,718 |
2,090 |
3,443 |
3,045 |
3,207 |
2,652 |
2,077 |
57,359 |
| Gold Doré and Silver Doré |
US$ million |
|
266 |
352 |
919 |
700 |
764 |
552 |
577 |
18,838 |
| Molybdenum Concentrate |
US$ million |
|
14 |
23 |
30 |
30 |
26 |
46 |
59 |
2,188 |
| Revenue (NSR) |
US$ million |
|
1,998 |
2,464 |
4,392 |
3,775 |
3,997 |
3,251 |
2,713 |
78,385 |
| Costs |
|
| Total Royalties Payable |
US$ million |
(3) |
(27) |
(34) |
(87) |
(65) |
(81) |
(88) |
(73) |
(2,674) |
| NSR Net of Royalty |
US$ million |
|
1,971 |
2,430 |
4,304 |
3,710 |
3,916 |
3,163 |
2,640 |
75,711 |
| Total Operating Costs |
US$ million |
|
(607) |
(688) |
(899) |
(692) |
(822) |
(778) |
(782) |
(26,035) |
| Operating Cash Flow |
US$ million |
|
1,364 |
1,742 |
3,405 |
3,018 |
3,094 |
2,385 |
1,858 |
49,676 |
| Total Capital Costs |
US$ million |
(6,432) |
(723) |
(300) |
(162) |
(109) |
(68) |
25 |
27 |
(9,642) |
| PST |
US$ million |
(83) |
(9) |
(4) |
(1) |
(1) |
(1) |
(0) |
(0) |
(125) |
| |
|
|
|
|
|
|
|
|
table continues… |
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| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| |
Unit |
Pre-prod.
Period |
Production Period |
Years
-6 to -1 |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
Year 6 |
Year 7 |
LOM |
| Reclamation- water treatment fund |
US$ million |
(9) |
(70) |
0 |
0 |
0 |
0 |
(93) |
(23) |
(1,273) |
| Pre-tax Cash Flow |
US$ million |
|
562 |
1,439 |
3,242 |
2,907 |
3,025 |
2,317 |
1,862 |
38,636 |
| BC Mining Tax |
US$ million |
|
(28) |
(36) |
(70) |
(62) |
(368) |
(318) |
(249) |
(5,429) |
| BC Income Tax |
US$ million |
|
- |
- |
(49) |
(297) |
(282) |
(213) |
(167) |
(4,122) |
| Federal Income Tax |
US$ million |
|
- |
- |
(62) |
(371) |
(353) |
(267) |
(208) |
(5,152) |
| Total Taxes |
US$ million |
|
(28) |
(36) |
(181) |
(730) |
(1,002) |
(798) |
(624) |
(14,703) |
| Net Cash Flow |
US$ million |
|
535 |
1,403 |
3,061 |
2,178 |
2,022 |
1,519 |
1,238 |
23,933 |
| Notes: | 1. The complete annual cashflow schedule is presented in
Figure 22.1. |
2. The complete annual mine production schedule is presented
in Table 16.9 and Figure 16.12.
3. The metal grades presented herein are the grades of the
mill feed that will eventually report to the concentrate or doré.
4. Includes gold and silver in concentrate form.
5. Royalties include IBA payments.
6. Sums may not add due to rounding.
| Seabridge Gold Inc. | 22-9 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
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Tetra Tech investigated the sensitivity of NPV and IRR to
the key variables. Using the 2022 PFS Base Case as a reference, each of key variables was changed between -30% and +30% in 10% increments
while holding the other variables constant.
Sensitivity analyses were carried out on the following key
variables:
| · | gold, copper, silver, and molybdenum metal prices |
The analyses are presented graphically as financial outcomes
in terms of post-tax NPV, and IRR. The NPV is most sensitive to gold price and exchange rate, followed by operating costs, copper price,
and capital costs. The IRR is most sensitive to exchange rate, capital costs, and gold price, followed by copper price and operating costs.
In general, sensitivity to metal price is roughly equivalent to sensitivity to metal grade. Financial outcomes are relatively insensitive
to silver and molybdenum prices. The NPV and IRR sensitivities are presented in Figure 22.2 and Figure 22.3, respectively.
| Figure 22.2 | Sensitivity Analysis of Post-tax NPV at a 5% Discount Rate |
Source: Tetra Tech, 2022
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| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
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| Figure 22.3 | Sensitivity Analysis of Post-tax IRR |
Source: Tetra Tech, 2022
The following royalties are included in the economic analysis.
| 1. | 1% of the NSR payable to Newmont, capped at US$3.5 million, with a predetermined buyout option. The full amount of the buyout
option is paid in Year 1 in the financial model. Refer to Section 4.2 for details. |
| 2. | 1.5% of the NSR payable to Pretium (East Mitchell only) |
| 3. | 60% of the gross silver royalty payable to Sprott |
| 4. | Commitments in Impact Benefit Agreements listed in Section 20.1.5 |
The copper concentrate smelter terms and molybdenum concentrate
smelter charges that have been applied in the economic analysis are presented in Section 19.1 and 19.2 of this report, respectively.
Gold and silver doré will generally include payment
terms as follows:
| · | Gold: pay 99.8% of content less a refining charge of US$1.00/accountable oz. |
| · | Silver: pay 90.0% of content less a refining charge of US$1.00/accountable oz. |
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| 22.8 | Miscellaneous Costs and Charges |
An assumption is being made that the customer base will be
in Asia. The copper concentrate will be shipped in bulk via port facilities in Stewart, BC, and the molybdenum concentrate will be packed
in concentrate bags and shipped inside sea containers via port facilities in Prince Rupert, BC. Transportation costs for the copper and
molybdenum concentrate are listed below:
| ̶ | port storage and handling: US$16.94/wmt |
| ̶ | ocean transport to Asian port: US$63.50/wmt |
| ̶ | port storage and handling: US$29.63/wmt |
| ̶ | ocean transport to Asian port: US$87.68/wmt |
Gold and silver doré transportation cost is assumed
to be US$1.00/oz.
An insurance rate of 0.125% was applied to the provisional
invoice value of the concentrates and doré to cover land-based and ocean transport from the mine site to the smelter.
A US$8.50/dmt charge was applied for marketing and services
provided by the Owner’s representative. Duties would include attendance during vessel unloading at the smelter port, supervising
the taking of samples for assaying, and determining moisture content.
An overall weight loss of 0.1% was applied in the economic
analysis.
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There are no relevant adjacent properties to the KSM Property
that is the subject of this Report.
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| 24.0 | Other
Relevant Data and Information |
The 2022 PEA is preliminary in nature and includes Inferred
Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable
them to be categorized as Mineral Reserves, and there is no certainty that the results of the 2022 PEA will be realized. Mineral Resources
are not Mineral Reserves and do not have demonstrated economic viability.
The 2022 PEA is a stand-alone mine plan
that has been undertaken to evaluate a potential future expansion of the KSM mine to the Iron Cap and Kerr deposits after the 2022 PFS
mine plan has been completed. None of the Mineral Resources incorporated into the 2022 PEA mine plan have been used in the 2022 PFS mine
plan.
The 2022 PEA is a scoping level of study based on the Mineral
Resources stated in the Kerr and Iron Cap Mineral Resource estimate in Section 14.
The 2022 PEA is primarily an underground block cave mining
operation supplemented with a small open pit and is planned to operate for 39 years with a peak mill feed production of 170,000 t/d. The
2022 PEA mine site general arrangement is shown in Figure 24.1. The numbering scheme for the sub-sections of this part of the Report follow
Items 16 through 22 of Form 43-101F1.
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| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
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| Figure 24.1 | Mine Site General Arrangement (2022 PEA) |
Source: Tetra Tech (2022)
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| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
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| 24.16.1 | Net Smelter Return Block Model |
The NSR per tonne for each block in the block model used
for the PEA mine planning is determined using the Mineral Resources discussed in Section 14.0. It is net of offsite concentrate treatment
and smelter charges and inclusive of onsite mill recovery. It is used as a cut-off item for break-even mill-feed/waste selection, as well
as for grade bins used to optimize cash flow in the open pit production scheduling.
NSR is estimated using Net Smelter Price (NSP) and process
recoveries. Metal Prices and exchange rate in Table 24.1 and typical smelter terms, off site costs and royalties are used to estimate
the NSP. Process recoveries have been determined using the metallurgical projections described in Section 13, with the exclusion of CIL
gold recovery from mill feed derived from Iron Cap and Kerr zones.
| Table 24.1 | Metal Prices for PEA NSR Calculation |
| |
Metal Price
(US$) |
| Cu |
2.70/lb |
| Au |
1,200/oz |
| Ag |
17.50/oz |
| Mo |
9.70/lb |
| Exchange Rate (US$:Cdn$) |
0.83 |
| |
|
| 24.16.2 | Open Pit Mining Method |
The open pit development is designed
as a conventional truck-shovel operation with 360 t trucks and 56 m3 and 40 m3 shovels. Mill feed will be hauled
to the Mitchell primary crusher and waste rock will be hauled to the Mitchell open pit backfill.
Pit
Design
Kerr open pit has been designed to supplement block cave
mill feed during the ramp up of the block cave production. The pit limit has been selected by using the first phase of the Kerr pit design
from previous studies. The Kerr pit design incorporate open pit slope design parameters based on geotechnical site investigations, available
local and regional geological data, and well-established geotechnical design methods.
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The mine design for the Kerr pit phase is shown in Figure
24.2.
| Figure 24.2 | Kerr Pit Design – Plan View |
Source: MMTS (2022)
Sub-set of Mineral Resources Within PEA
Pit
The Mineral Resources summarized in Table 24.2 is a subset
of the Mineral Resources and quantities that are included in Section 14. The Mineral Resources within the PEA pit uses an NSR cut-off
grade of Cdn$10.75/t.
| Table 24.2 | Mineral Resources Within the PEA Open Pit Mine Plan |
| Pit |
Mill Feed
(Mt) |
Au
(g/t) |
Cu
(%) |
Ag
(g/t) |
Mo
(ppm) |
| Indicated |
117 |
0.26 |
0.51 |
1.4 |
1.8 |
| Inferred |
7 |
0.74 |
0.09 |
1.5 |
0.6 |
Waste Rock Facilities
All open pit waste is placed in the Mitchell mined out pit
as backfill.
Production Scheduling (Open Pit)
There is one year of pre-stripping before production commences.
Open pit production will be carried from PEA Years 1 to 5 using an already established KSM open pit mining fleet to supplement Iron Cap
mill feed ramp up. Open pit production is completed before Kerr underground production begins.
Open pit scheduling has been carried out with the MineSight
MPSO with the primary program objective to maximize the utilization of the available open pit mine fleet.
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| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
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Kerr Open Pit Mine Operations
KSM Kerr open pit mining operations will employ bulk mining
methods and large capacity equipment that are suitable for the rates of mining that are proposed in the PEA mine plan.
| 24.16.3 | Iron Cap Mining Methods |
Mining Method Selection
Based on mining costs, deposit grade, geometry, and depth,
block caving was selected as the preferred mining method. Iron Cap has been designed to operate battery-electric loaders and electric
trains for material handling and employs both tele-operation and automation for these units. This enables a reduction in the number of
primary ventilation intake and exhaust drifts due to less ventilation demand and cost savings from lower diesel fuel, labour and equipment
maintenance costs.
Geotechnical and Caving Geomechanics Considerations
The characterization of the Iron Cap rock mass focuses on
the rock in and around the extraction and undercut levels of the proposed block cave mine (870 m elevation) and on the mineralized rock
above this that will be caved.
Characterization of the rock was based on core photographs
and data collected for exploration drill holes, detailed geotechnical data collected for drilling programs carried out by BGC in 2010
(BGC, 2011), and an interpreted geological model provided to WSP Golder by Seabridge.
Three geotechnical holes were drilled in the Iron Cap deposit
in 2010 and no additional geotechnical holes have been drilled since then. A qualitative geotechnical assessment of the core from a number
of exploration holes drilled in 2017 was undertaken by WSP Golder personnel in September 2017. This indicated that the geotechnical quality
of the rock mass was good to very good, and the quality was very uniform in the area that is being proposed to be mined by block caving.
The overall conclusion was that the geotechnical assessment undertaken by WSP Golder for previous studies (Golder, 2012) remains valid
for this 2022 PEA.
The caveability assessments made using Laubscher’s
and Mathews’ methods for prior studies indicated that the size of the footprint required to initiate and propagate caving is less
than approximately 200 m. This minimum footprint size is significantly smaller than the size of the footprint of the deposit that
can potentially be mined economically by caving. This fact, together with the generally large-size continuous nature of the deposit indicates
that the Iron Cap deposit is amenable to block caving.
The cave mining will draw down the mineralized rock and a
significant depression will develop on surface above the production footprint in the form of a crater. The crater typically develops on
surface above and slightly laterally beyond the footprint of the production horizon of the cave mining. The top section of the crater
is a relatively steep escarpment (60° to 70°) that is marginally stable but comprised of nominally in place dilated rock. Deeper
within the crater is failed broken rock that has progressively sloughed from the rim of the crater. This rock rills down to the bottom
of the crater at angle of repose.
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The Iron Cap cave will undercut parts of the overlying ice
sheet. The ice will break up as part of the surface disturbance created by the cave and progressively melt as it is drawn down. The total
volume of water that enters the cave from the melting ice is relatively small. Further studies will be required in the future to assess
the need to drain free water that may be present immediately beneath the ice sheet prior to the start of caving.
Cave Modelling and Production Scenarios
GEOVIA’s PCBC™ Footprint Finder
software (FF) was used to assess a range of footprint shapes and elevations for a range of NSR shut-off values in excess of the preliminary
operating cost estimate of Cdn$11.50 per tonne. This cost is comprised of Cdn$3.80/t mining cost, and Cdn$7.70/t processing and general
and administrative (G&A) costs. These preliminary costs represent the initial estimates that were made to undertake the FF assessments.
The mining operating cost was subsequently refined to Cdn$5.64/t (US$4.34/t). As well the process and G&A operating cost was subsequently
refined to Cdn$9.08/t.
The NSR values were obtained from the block model discussed
in Section 24.16.1. The primary parameters used in the FF assessments are presented in Table 24.3. A maximum column height (height of
draw, HOD) of 750 m was used in the FF assessments.
| Table 24.3 | Iron Cap Footprint Finder Input Parameters |
| Footprint Finder Parameter |
Value |
Comments |
| Discount Rate |
5% |
Provided by Seabridge |
| Maximum Height of Draw |
750 m |
Industry experience |
| Minimum Height of Draw |
195 m |
From caving geomechanics assessments |
|
Vertical Incremental
Capital Cost |
Cdn$180,000 per m |
WSP Golder benchmark from previous studies |
|
Lateral Incremental
Capital Cost |
Cdn$2,100 per m2 |
WSP Golder benchmark from previous studies |
|
Preliminary Operating Cost
(Mine, Mill and G&A) |
Cdn$11.50 per tonne |
$3.80 for mining (WSP Golder) and $7.70 for processing and general and administration (Seabridge) |
| Maximum Draw Rate |
80 m per year |
From industry experience |
| Drawpoint Opening Rate |
120 per year |
Construction of 10 drawpoints per month – industry experience |
| Production Ramp up Rate |
Avg. 5 Mt per year |
Industry experience (3 to 6 Mt per year) |
| Maximum Production Rate |
90,000 tpd |
Achievable rate based on the 80 m/yr. draw rate, 120 drawpoints constructed per year and available footprint area |
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The shut-offs used in the FF assessments ranged from Cdn$16/t
to Cdn$24/t which represent a premium over the preliminary operating cost estimate. From this a footprint at elevation 870 m was
selected based on an NSR shut-off of Cdn$20/t. Part of the selection of the footprint elevation was to provide for gravity drainage of
inflow water from direct precipitation, surface runoff, and operational water. This design generated sufficient tonnes to feed the mill
in combination with other mill feed sources over a sustained period and at a production rate of 90 kt/d. The total production is 743 million
tonnes. A second lower cave lift was assessed but the footprint was not sufficiently large to warrant further study. Figure 24.3 shows
the final footprint profile at 870 m elevation. The warmer colors shown in this figure represent higher column values. The production
schedule for the Cdn$20/t NSR shut-off is presented later in Section 24.16.3.
| Figure 24.3 | Iron Cap Footprint for Lift at 870 m Elevation |
Note: (WSP Golder 2022) Grid system is based on UTM coordinates.
Warmer colours indicate higher column NSR values and cooler colours indicate lower column NSR values.
Design Criteria and Layout
The block cave design for the Iron Cap footprint is at
the 870 m elevation. The shape of footprint is an irregular oval, with an area of 570,000 m2, a length of approximately 1 km,
and a width at the widest section of approximately 700 m
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The heights of draw through which the production tonnes
are extracted average approximately 500 m ranging from 250 m to 750 m, where the lower values reflect the western side of the footprint
that is developed earlier in the mine life and the higher values reflect the eastern side of the footprint that is developed late in the
mine life. Most of this geometry is dictated by the position of the Sulphurets Thrust Fault which is the structure which constrains economic
mineralization below it.
The development direction for the Iron Cap cave starts from
the middle of the eastern lobe and propagates away from this middle to the footprint edge; and also generally from west to east, such
that draw bells on the western half of the footprint are developed first and draw mill feed columns whose heights are generally lower
than the average height across the footprint.
Personnel, material, and supplies will access the underground
through the primary access drift adjacent to the Mitchell OPC. For this design, the MTT has been slightly re-aligned towards the south
adjacent to the Iron Cap deposit to avoid intersecting with the very weak STF and the adjacent mylonitic zone. Immediately adjacent to
the MTT is a rail spur to allow the haulage trains to be loaded under two surge bins that are fed by the Iron Cap conveyor. The conveyor
is fed by two gyratory crushers located just outside the northern end of the footprint.
The haulage level maintenance shops, underground offices
and warehouse facilities are located at the north end of the footprint.
Two fresh air portals and two exhaust portals are planned
on the north slope of the Mitchell Valley as seen in Figure 24.4. A third fresh air intake adit will be collared in the area of the Mitchell
OPC to the southwest of the footprint. It is required to provide a flow-through ventilation circuit during the pre-production development
phase before the other drifts can be excavated south from the footprint to breakthrough on the north slope. Developing the tunnels northward
from the north valley slope into the mountain was considered unsafe due to the high geohazard and avalanche risks on this slope. The third
adit will remain an active intake and access adit throughout the mine life.
The fresh air adits will connect to perimeter drifts constructed
around the entire mine footprint to provide fresh air to the mine workings. Exhaust raises on the extraction level will connect down to
an exhaust level that then connects to the two adits that exhaust air to the north slope of the valley. The exhaust portals are downwind
of the fresh air portals to avoid intake of air contamination and are separated approximately 340 m from one another.
The Iron Cap design has multiple drifts that can act as emergency
egress. The primary emergency egress will be the train tunnel or fresh air adit of the MTT, whichever is accessible. If both are inaccessible,
it will be possible to exit the mine through one of the fresh air drifts that connect to the north slope of the Mitchell Valley.
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| Figure 24.4 | Plan View of Iron Cap Mine with Contour |
Source: WSP Golder (2022)
Figure 24.5 shows the typical level arrangement for the Iron
Cap mine. The mine development occurs on the following seven levels:
| ● | the pre-conditioning level is planned to provide access for in situ fracturing of the rock mass prior to caving. From the grid of
drifts on this level, a series of boreholes will be drilled, and hydraulic fracturing will be used to generate fractures in the rock mass
that it is proposed to cave |
| ● | the undercut level is comprised of a series of parallel drifts to perform drilling and blasting required to develop void and initiate
caving. The level is located |
40 m below the pre-conditioning level
| ● | the extraction level is comprised of parallel drifts spaced 18 m apart where the drawpoints and dumping points are located. Battery-electric
LHD equipment will extract the caved material from the drawpoints and haul it to the nearest ore pass dump point. This extraction level
at Elevation 870 m is 20 m below the undercut level |
| ● | the fresh air level is 20 m below the extraction level and conveys fresh air to the other levels via vertical ventilation raises |
| ● | the exhaust ventilation level is 5 m below the fresh air level and this level exhausts air by vertical ventilation raises from the
extraction level |
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| ● | the haulage level is 25 m below the exhaust level. It receives the material dumped by LHD’s into ore passes on the extraction
level. Each ore pass from the extraction level is fitted with a stationary rock breaker to size the material that gravity feeds down to
chutes that load rail cars. Electric locomotives haul the loaded rail cars to one of two gyratory crushers located just outside the northern
end of the footprint |
| ● | the water drainage level is located 25 m below the haulage level and it collects drainage and inflow water and directs it to the 1,314
m long Dewatering Tunnel that gravity drains to the North Pit Wall Dewatering Adit (NPWDA). |
| Figure 24.5 | Typical Level Arrangement for Iron Cap |
Source: WSP Golder (2022)
An El Teniente-type drawpoint layout is planned on the
extraction level. The routing for the LHD haulage to the ore passes is shown in Figure 24.6. The design incorporates extraction drifts
that are 5.0 m wide by 4.6 m high and spaced 30 m apart, with drawbell drifts that are similarly sized, aligned at a 60° angle to
the extraction drifts, spaced 18 m apart. The drawbells are created by drilling and blasting and then two drawpoints per drawbell are
constructed. These drawpoints are supported with heavy support in the brows in order to withstand the attrition and erosion of the mineralized
material as it is mucked. The resulting drawpoint spacing is 18 m by 15 m which is appropriate for the expected fragmentation.
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| Figure 24.6 | Drawpoint Configuration for Iron Cap |
|
Source:
WSP Golder (2022) |
Overall, the mine plan is based on there being 7 different
levels and approximately 200 km of drifts and raises. Table 24.4 summarizes the various types of drift development and the sizes of these
excavations.
| Table 24.4 | Main Drift Types and Dimensions |
| Type |
Dimensions |
| Drawpoint and Extraction Drifts |
5.0 m W x 4.6 m H |
| Perimeter, internal ramps |
6.0 m W x 5.5 m H |
| Pre-conditioning, Undercut, Dewatering Drifts |
5.0 m W x 4.6 m H |
| Access Tunnels, Conveyor Drifts |
6.0 m W x 6.0 m H |
| Haulage Level |
6.0 m W x 6.0 m H |
| Main Fresh/Return Air Drifts |
7.5 m W x 7.5 m H |
Vertical development will be constructed primarily using
raisebore machines and raisebore-and-slash techniques.
Table
24.5 summarizes the various types of vertical development and the sizes of these excavations.
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| Table 24.5 | Vertical Development Dimensions |
| Type |
Diameter (m) |
Type |
| Ore Passes and Haulage Level Ventilation Raises |
4 |
Bored Raise |
| Footprint, Undercut, and Pre-conditioning Level Ventilation Raises |
2.5 |
Bored Raise |
| Ore Bins (including MTT ore bin) |
10 |
Bored Raise and Slashed |
Ventilation
The quantity of required airflow was determined using a VentSim
model of the mine design and was based on the requirement for 0.06 m3/s of ventilating air for each kilowatt of power of diesel-powered
equipment and 0.025 m3/s per kilowatt of electrically powered equipment. Mine equipment and engine utilization factors were
also considered in determining total ventilation needs.
The peak airflow requirement was estimated to be 1,075 m3/s,
which is sufficient to dilute all noxious gases, particulate matter, and heat produced by the mining equipment and the operational activities
on each mining level. This equates to a rate of 0.011 m3/s per tonne of material mined per day and is approximately one-half
of a typical block cave mine using only diesel-powered equipment. This reduced ventilation demand results in fewer primary intake and
exhaust drifts and less main fan capacity and power demand.
There are three main intakes and two main exhausts that are
7.5 m by 7.5 m in cross-section. There are 3 axial fans at each of 3 intake drifts with a peak power demand of 1,865 kW. Raises that are
2.5 m in diameter connect the extraction level to the exhaust drifts.
Heating of mine air in the winter months is included
in the design and cost estimates, and this will be accomplished using propane mine heaters located at each of the two main fan
installations. A mine air heating system of 15 MW capacity is required to heat 1,075 m3/s of air from an average minimum
temperature of -5.7°C to 2°C for an average of six months per year (November through April). The average propane requirement
is 3.5 million liters per year during production. Figure 24.7 is a schematic of the ventilation system showing major airflow
directions.
| Figure 24.7 | Ventilation Schematic for Iron Cap Mine (Section Looking West) |
Source: WSP Golder (2022)
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Mine Dewatering
The maximum mine water inflow estimate for Iron Cap is 6
m3/s. This is based on factoring the more detailed assessment that was undertaken from first principles. The inflow water includes
groundwater and surface water inflows (including ice melt from ice that is drawn down with the caved rock when the icefield is undercut
and then melts), and water that is introduced to the mine for operations. The inflow from melting ice will have a relatively insignificant
impact on total water inflows. The inflows to Iron Cap are conveyed by gravity via a system of sumps and drainholes from the various levels
to a 1.3 km drift located on the southwest corner of the footprint that connects to the North Pit Wall Dewatering Adit (NPWDA). The NPWDA
flows into the Mitchell Valley Depressurization Tunnel (MVDT) which then flows to the WSF.
All drifts have been graded so that water flows towards collection
sumps which will feed into the Dewatering Tunnel. Sump pumps will be used locally as required. The water management system has a nominal
capacity of 6 m3/s (95,000 gpm).
2022 PEA Production Schedule
The proposed production schedule as developed using FF software
is shown in Figure 24.8. Note that the years shown apply to the combined open pit and underground multi-mine plan of the KSM 2022 PEA
mine production. Iron Cap pre-production construction will take 4 years with the first cave production being in PEA Year 1.
A production ramp-up period of 6 years is governed by the
draw point opening rate of 120 per year and maximum draw rate of 80 m per year (220 mm per day). Both are consistent with industry experience.
The sustained peak production rate estimated using FF is 90 kt/d. There is also a 6-year ramp-down period as drawpoints are depleted.
| Figure 24.8 | Iron Cap Mine Production Plan |
|
Source:
WSP Golder (2022)
|
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Only Indicated and Inferred Mineral Resources are included
in the production plan. The production tonnes and grades are comprised of mineralized material included in the Mineral Resources reported
in Section 14, mineralized dilution taken at grade (the portion of Indicated and Inferred material that is below the operating costs cut-off)
and includes small percentage of material at zero grade. All unclassified materials are treated as waste by setting the grades to zero.
Table 24.6 shows the distribution of production tonnes and grades in the 2022 PEA mine plan.
| Table 24.6 | Iron Cap Production Tonnes and Grade in 2022 PEA Mine Plan |
| |
Measured |
Indicated |
Inferred |
| Tonnes (millions) |
- |
57.7 |
685.0 |
| NSR (Cdn$/t) |
- |
32.83 |
36.70 |
| Au (g/t) |
- |
0.62 |
0.58 |
| Cu (%) |
- |
0.28 |
0.36 |
| Ag (g/t) |
- |
3.2 |
3.0 |
Note: Includes mineralized dilution (the
portion of Indicated and Inferred Mineral Resources that is below the operating costs) and includes small percentage of material at zero
grade.
The mining sequence supporting the production plan is shown
in Figure 24.9. The cave is initiated in the region of the footprint that has the highest NSR values to maximize early value. The mining
then propagates radially from this point and continues down the southeastern limb of the footprint.
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| Figure 24.9 | Proposed Drawpoint Development Sequence for the Iron Cap Mine |
Note: Legend is drawpoint number Source: WSP Golder (2022)
Development Schedule
The pre-production development phase of the Iron Cap mine
is estimated to be 4 years, which includes mine access, some initial footprint development and construction of major mine infrastructure,
such as the underground crusher, material handling system, shops, dewatering system, and primary ventilation. The development schedule
was generated using Deswik software based on an advance rate of 4 m/day and a maximum of three active headings in the first two years,
six active headings in PEA Year 3, and nine active headings in PEA Year 4.
The overall development strategy is to provide access to
the crusher location as soon as possible while prioritizing the installation of the materials handling system, haulage system and shop
areas. Following this, extraction drifts, drawpoints, and undercut and pre-conditioning levels will be advanced to allow for cave initiation.
Several ventilation airways will also be advanced southward towards the Mitchell Valley to establish the flow-through ventilation circuit
in advance of production.
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Blasting and Explosives
It is assumed that explosives will be stored in a surface
magazine in the Mitchell Valley to service the Iron Cap mine. The explosives will be delivered to the underground mine via the access
tunnel as required. Small underground magazines will be established to provide daily supplies of explosives, and explosives will be distributed
on a shift basis for five main purposes:
| ● | preparation for the development of mineralized areas |
| ● | development in barren material |
| ● | secondary blasting of boulders and hang ups. |
Mining Equipment
The peak primary and support equipment requirements for the
proposed Iron Cap mine are summarized in Table 24.7.
| Table 24.7 | Peak Mobile Equipment Requirements for Iron Cap |
|
Development
Equipment |
Unit |
Production
Equipment |
Unit |
Support
Equipment |
Unit |
| Jumbo |
12 |
LHD (BEV) |
24 |
Grader |
2 |
| Haul Truck (BEV) |
8 |
Drill Rig |
4 |
Lube Truck |
3 |
| LHD (BEV) |
5 |
Water Cannon |
4 |
Electricians Truck |
3 |
| Bolter |
16 |
Block Holer |
8 |
Telehandler |
4 |
| Explosive Loader |
5 |
Mobile Rockbreaker |
5 |
Mobile Crane |
2 |
| Scissor Lift |
7 |
Boom Truck |
1 |
Mine Ambulance |
1 |
| Shotcrete Sprayer |
4 |
Locomotive (Electric) |
5 |
Fire Truck |
1 |
| Transmixer |
5 |
Shunting Locomotive (Electric) |
1 |
Mine Rescue Truck |
1 |
| Raisebore |
3 |
Rail Car |
78 |
Fan/Pipe Handler |
1 |
| |
|
|
|
Backhoe |
3 |
| |
|
|
|
Water Truck |
1 |
| |
|
|
|
Sludge Truck |
1 |
| |
|
|
|
Cable Bolter |
4 |
| |
|
|
|
Big Personnel Carrier |
6 |
| |
|
|
|
Small Personnel Carrier |
16 |
Note: BEV is battery-electric vehicle.
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Mine Workforce
The estimated workforce for Iron Cap is 658 persons at the
peak of the pre-production construction period with an average of 600 persons during the production period.
| 24.16.4 | Kerr Mining Methods |
Mining Method Selection
Based on mining costs, deposit grade, geometry and depth,
block caving was selected as the preferred mining method for the lower part of the Kerr deposit. Kerr has been designed for using diesel
powered loaders and haulage trucks for material handling.
Geotechnical and Caving Geomechanics Considerations
Dedicated geotechnical drilling or studies have not yet been
conducted for the Kerr resource area. Current geological exploration drilling indicates similar rock conditions to the geotechnical information
that were gathered from the Mitchell deposit, and for the purposes of the 2022 PEA it is assumed the rock characteristics will be similar.
The caveability assessments made using Laubscher’s
and Mathews’ methods indicate that the size (diameter) of the footprint required to initiate and propagate caving is less than 200
m. This minimum footprint size is significantly smaller than the size of the footprint of the deposit that can potentially be mined economically
by caving. This fact, together with the general large-sized, continuous nature of the deposit, suggests that the lower Kerr deposit is
amenable to cave mining.
The cave mining will draw down the mineralized rock and a
significant depression will develop on surface above the production footprint in the form of a crater. The crater typically develops on
surface above and slightly laterally beyond the footprint of the production horizon of the cave mining. The top section of the crater
is a relatively steep escarpment (60° to 70°) that is marginally stable but comprised of nominally in place dilated rock. Deeper
within the crater is failed broken rock that has progressively sloughed from the rim of the crater. This rock rills down to the bottom
of the crater at angle of repose.
Life of mine underground infrastructure such as conveyors,
vent drifts, ramps, and vent shafts are not planned within or near any areas potentially disturbed by caving.
Cave Modelling and Production Scenarios
GEOVIA’s PCBC™ Footprint Finder
software (FF) was used to assess a range of footprint shapes and elevations for a range of NSR shut-off values in excess of the preliminary
operating cost estimate of Cdn$13.60 per tonne. This cost is comprised of Cdn$6.00/t mining cost, and Cdn$7.60/t processing and general
and administrative (G&A) costs. These preliminary costs represent the initial estimates that were made to undertake the FF assessments.
The mining operating cost was subsequently refined to Cdn$6.82 (US$5.25). As well the process
and G&A operating cost was subsequently refined to Cdn$9.08/t.
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The NSR values were obtained from the block model discussed
in Section 24.16.1. The primary parameters used in the FF assessments are presented in Table 24.3. A maximum column height (height of
draw, HOD) of 750 m was used to identify and locate the footprint for the upper lift, and 500 m was used for a subsequent lower lift.
The proposed Kerr Pit was also included in the assessment. The primary FF input parameters are presented in Table 24.8. The assessment
was based on a combined 2-lift operation.
| Table 24.8 | Kerr Footprint Finder Input Parameters |
| Footprint Finder Parameter |
Value |
Comments |
| Discount Rate |
5% |
Provided by Seabridge |
| Maximum Height of Draw |
750 m |
750 m used to define footprint and for production schedule, based on industry experience |
| Minimum Height of Draw |
195 m |
From experience |
| Minimum Allowable Footprint Width |
200 m |
Based on geotechnical/caveability assessments |
| Vertical Incremental Capital Cost |
Cdn$180,000 per m |
WSP Golder benchmark from previous studies |
| Lateral Incremental Capital Cost |
Cdn$2,100 per m2 |
WSP Golder benchmark from previous studies |
|
Preliminary Operating Cost
(Mine, Mill and G&A) |
Cdn$13.60 per t |
Cdn$6.00 for mining (WSP Golder) and Cdn$7.60 for processing and general and administration (Seabridge) |
| Maximum Draw Rate |
80 m per year |
From industry experience |
| Drawpoint Opening Rate |
120 per year |
Construction of 10 drawpoints per month – industry experience |
| Production Ramp up Rate (PRC) |
Avg. 5 Mt per year |
Industry experience (3 to 6 Mt per year) |
| Maximum Production Rate |
80,000 tpd |
Achievable rate based on the 80 m per year draw rate, 120 drawpoints constructed per year and available footprint area |
A range of NSR shut-offs values that included premiums
over the preliminary operating cost estimate was assessed using FF. From this, footprint elevations of 625 m and 130 m were selected based
on an NSR shut-off of Cdn$18/t. This generated sufficient tonnes to feed the mill in combination with other mill feed sources over a sustained
period and at a production rate of 80 kt/d. The production from Lift 1 is 525 million tonnes and the production from Lift 2 is 300 million
tonnes. The footprints for these two levels are shown in Figure 24.10 and Figure 24.11. The warmer colours shown in these figures represent
higher column values. The final footprint boundaries maintain a minimum footprint width of 200 m to initiate and propagate caving (grid
spacing on plan is 200 m).
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| Figure 24.10 | Plan View of Kerr 625 m Lift 1 Footprint. |
WSP Golder (2022) Grid system is based on UTM coordinates.
Warmer colours indicate higher column NSR values and cooler colours indicate lower column NSR values.
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| Figure 24.11 | Plan View of Kerr 130 m Lift 2 Footprint. |
WSP Golder (2022) Grid system is based on UTM coordinates.
Warmer colours indicate higher column NSR values and cooler colours indicate lower column NSR values.
Design Criteria and Layout
The block cave mine design is based on two separate Lifts
with a combined area of 775,000 m2. Lift 1 is at the 625 m elevation and Lift 2 is at the 130 m elevation. Lift 1 tonnes are
based on a starting topography that has the Kerr pit exploited.
Lifts 1 and 2 are both accessed through a series of shared
portals and ventilation adits along the northwestern base of the mountain, facing Sulphurets Creek. All Lifts connect to a 7 km common
inclined UG conveyor system which passes under the Sulphurets Creek and connects directly to an ore bin above the MTT material handling
system which supports all mines at the KSM site. Mining on each lift assumes panel caving with a post undercutting method, with load-haul-dump
(LHD) equipment for extraction, and a material handling system of muck passes, chutes, truck haulage, two crushers and conveyors.
The ventilation system design assumes five main intake adits
and four main exhaust adits. Lift 2 is connected to the common ventilation adit system via bored shafts and decline ramps. Two of the
main intake adits also serve as the primary access for the mine and are connected to the decline ramp system for the subsequent lower
lift.
Surface camps, shops, warehouses, offices, electrical substation,
water distribution, and other surface infrastructures are located just outside the portal area just below 600 m elevation. These facilities
will be used in conjunction with similar facilities established for the overall KSM area to support the other mining operations, i.e.,
Mitchell, Iron Cap, Sulphurets, etc. Figure 24.12 shows a plan view of the mine layout projected to surface.
The Kerr design has multiple drifts that can act as an emergency
egress. The primary emergency egress will be one of the fresh air adits. If these adits are inaccessible, it will be possible to exit
the mine through the service adit. Egress from Lift 2 will be up the ramp or via the service ramp parallel to the conveyor decline.
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| Figure 24.12 | Kerr Mine Plan View |
Note: Spacing between Lifts 1 and 2 is 495 m. The
distance from the portals to the footprint of Lift 1 is approximately 2 km. Source: WSP Golder (2022)
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Lift 1 has an area of 446,000 m2. The footprint
shape is an irregular oval shape spanning 1,290 m in length with variable widths of up to 500 m, tapering at both ends. The extraction
level is at elevation 625 m, which is slightly higher than the portal elevation of 600 m and thus does not require major ramps or shafts
for access or ventilation. Mine access is primarily through two of the intake portals, one of which directly connects to the footprint
area as a main ventilation intake drive, and the other which eventually parallels the UG conveyor as a service decline that connects to
the crusher area. The total production tonnage from lift 1 will be 525 million tonnes. Figure 24.13 shows the general arrangement of Lift
1.
| Figure 24.13 | Kerr Lift 1 (625L Mine Area) General Arrangement |
Source: WSP Golder (2022)
Lift 2 is smaller in tonnage and footprint size than
Lift 1 with an area of 329,000 m2. The footprint shape is an irregular and approximately 1,080 m in length with widths
varying from 200 m up to 700 m, tapering at both ends. The extraction level is at elevation 130 m. It requires two decline ramps for
access and muck conveyance, and seven bored shafts for ventilation. The total production tonnage from Lift 2 will be 300 million
tonnes. Figure 24.14 shows the general arrangement of Lift 2.
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| Figure 24.14 | Kerr Lift 2 (130L Mine Area) General Arrangement |
Source: WSP Golder (2022)
Figure 24.15 shows the typical level arrangement for the
Kerr underground mine.
| Figure 24.15 | Typical Level Arrangement for Kerr Underground |
Note: Light blue parallel undercut drifts and red parallel
extraction panel drifts are spaced 30 m apart. Dark blue drawpoints are spaced 18 m apart. Source: WSP Golder (2022)
The underground mine development occurs on the following
seven levels for each lift:
| ● | the pre-conditioning level is comprised of parallel drifts from which hydrofracking is performed to improve fragmentation. It is accessed
by one perimeter drift on the west side only |
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| ● | the undercut level is comprised of a series of parallel drifts to perform drilling and blasting required to develop a void and initiate
caving. The undercut level is 40 m below the preconditioning level |
| ● | the extraction level is comprised of parallel drifts spaced 18 m apart where the draw points and dumping points are located. Load-Haul-Dump
(LHD) equipment extract the caved material from the draw points and haul it to the nearest dumping points for the ore pass. The extraction
level is 17 m below the undercutting level |
| ● | the exhaust ventilation level is 22 m below the extraction level and this level exhausts air from the other levels via vertical ventilation
raises from the extraction level |
| ● | the intake, or fresh air, ventilation level is 16 m below the exhaust level and conveys fresh air to the other levels via vertical
ventilation raises |
| ● | the haulage level is 17 m below the fresh air level. It receives the material dumped by diesel powered LHD’s into ore passes
on the extraction level. Each ore pass is fitted with a stationary rockbreaker to size dumped material and a loading chute at the bottom
to enable truck loading. Diesel haul trucks transport the material to one of two gyratory crushers located just outside the footprint |
| ● | the dewatering level collects all drainage water via gravity through a series of sumps and boreholes connecting all the levels. The
dewatering level is 16 m below the haulage level. |
On the extraction level, an El Teniente-type drawpoint layout
is planned. The routing for LHD haulage is shown in Figure 24.16. The design incorporates extraction drifts that are 5.0 m high x 4.6
m wide and spaced 30 m apart, and drawbell drifts that are similarly sized, aligned 60° to the extraction drifts, and spaced 18 m
apart. The drawbells are created by drilling and blasting and once the drawbells connect to the undercut level, two drawpoints per drawbell
are constructed. These drawpoints are supported with heavy support in the brows to withstand the attrition and erosion from the mineralized
material as it is mucked. The resulting drawpoint spacing is 18 m by 15 m appropriate for the expected estimated fragmentation sizing
of the mill feed.
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| Figure 24.16 | Drawpoint Configuration for Kerr Underground |
|
Source: WSP Golder (2022)
|
Overall, the mine plan assumes that to produce from Lifts
1 and 2 there will be 14 different levels and approximately 284 km of drifts and raises. Table 24.9 outlines the main drift types and
dimensions used in the mine design.
| Table 24.9 | Main Drift Types and Dimensions |
| Type |
Dimensions |
| Drawpoint and Extraction Drifts |
5.0 m W x 4.6 m H |
| Perimeter, internal ramps |
6.0 m W x 6.0 m H |
| Pre-conditioning, Undercut, Dewatering Drifts |
5.5 m W x 5.5 m H |
| Access Tunnels, Conveyor Drifts |
6.0 m W x 6.0 m H |
| Haulage Level |
6.0 m W x 6.0 m H |
| Main Fresh/Return Air Drifts |
7.0 m W x 7.0 m H |
Vertical development will be constructed primarily using
raisebore machines and raisebore-and-slash techniques. Table 24.10 summarizes the various types of vertical development and sizes.
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| Table 24.10 | Vertical Development Dimensions |
| Type |
Dimensions |
Type |
| Intake Raises |
3.5 m Diam. |
Bored Raise |
| Ore Passes |
3.5 m Diam. |
Bored Raise |
| Exhaust Raises |
2.4 m Diam. |
Bored Raise |
| Main Ventilation Raises |
5 m Diam. |
Bored Raise |
| Ore Bins |
5 m Diam. |
Bored Raise |
Ventilation
The quantity of the required airflow was determined using
a VentSim model and was based on the current mine design indicated earlier and 0.06 m3/s of ventilating air for each kilowatt
of diesel-powered equipment. Mine equipment and engine utilization factors were also considered in developing the total ventilation needs.
The peak ventilation requirement was estimated to be 1,630
m3/s, which is sufficient to dilute noxious gases, particulate matter, and heat produced by the mining equipment and the operational
activities on each mining level. Ventilation is provided by four main intake drifts and four main exhaust drifts 6 m wide and 7 m high.
The second lift is ventilated via 3 fresh air raises and 4 exhaust raises of 5 m diameter which connect to the Lift 1 drifts, and to the
fresh air main ramp and fresh air service ramp.
Heating of mine air in the winter months is included in
the design and cost estimates, and this will be accomplished using mine heaters located at each of the two main fan installations. A mine
air heating system of 18 MW capacity is required to heat 1,630 m3/s of air from an average minimum of -5.7°C to 2°C
for six months per year (November through April). The average propane requirement is 6.5 million liters per year during production.
A ventilation schematic is shown in Figure 24.17.
| Figure 24.17 | Ventilation Schematic |
|
Source: WSP Golder (2022)
|
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Mine Dewatering
The water inflow rate for a 1 in 200-year storm event
is predicted to be approximately 5 m3/s for Lift 1 and 9 m3/s at the completion of Lift 2. Other inflows that
need to be dealt with are small quantities of groundwater and the production process water from drilling and dust suppression
activities.
For Lift 1 most of the inflow water will be intercepted
on the production level and routed away from the footprint to flow by gravity along the ventilation drifts to the portal at approximately
600 elevation. From here it will be directed into a 120 cm (48 inch) surface pipeline (separate from dewatering pipelines utilized for
the Kerr open pit). This pipeline will convey the water to the WTP platform at 543 elevation by gravity and then it will be pumped up
to the WSF. The 120 cm pipeline to the WTP is designed to handle
4 m3/s flow and any additional inflows that occur
under rare extreme seasonal conditions will be treated as an emergency discharge.
For Lift 2, it is planned to intercept inflow water as it
enters the production level and route it to sixteen 3,700 kW pumps (approximately 60,000 kW [80,000 HP]). These pumps have a capacity
of 8 m3/s (65,000 gpm) to pump water up to the Lift 1 ventilation drifts from where it will flow under gravity to the ventilation
drift portals. From the portals, as for Lift 1, water will be directed into two 120 cm surface pipes (an additional one added for Lift
2 mining). These pipes will convey the water to the WTP the same as for Lift 1. The estimated inflow rate over a 20-year period was used
to determine an average annual pump utilization factor of 3.5% which was used to calculate the annual pump power requirements. The mine
dewatering general arrangement is shown in Figure 24.18.
| Figure 24.18 | Mine Dewatering General Arrangement |
Source: WSP Golder (2022)
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2022 PEA Production Schedule
The proposed production schedule for Kerr, as developed in
FF software, is shown in Figure 24.19. Note that the years shown apply to the overall KSM 2022 PEA mine production schedule. The pre-production
construction will take 5 years with the first cave production being in PEA Year 7.
The ramp-up period is 5 years and is governed by the draw
point opening rate of 120 per year and maximum draw rate of 80 m per year (220 mm per day). Both are consistent with industry experience.
The total peak production rate of 80,000 tpd is achievable based on the available footprint area. Starting around PEA Year 25 there is
a dip in total production as lift 1 depletes and Lift 2 commences. This lower production interval is the result of a 60-degree offset
applied to the Lift 2 mining relative to Lift 1 to ensure that the Lift 1 crusher and associated access drifts on 625 m level are not
impacted by caving from Lift 2. There is an additional 5 years (about 53 Mt) of ramp down production from the second lift that was removed
from the mine plan so as not to run the mill at a reduced throughput, which would be an inefficient use of the mill asset.
| Figure 24.19 | Kerr PEA Mine Production Plan |
|
Source: WSP Golder (2022)
|
Only Indicated and Inferred Mineral Resources are included
in the production plan. The production tonnes and grades are comprised of mineralized material included in the Mineral Resources reported
in Section 14, mineralized dilution taken at grade (the portion of Indicated and Inferred material that is below the operating costs cut-off)
and includes small percentage of material at zero grade. All the unclassified materials are treated as waste by setting the grades to
zero. Table 24.11 shows the production tonnes and grade in the 2022 PEA mine plan based on their classifications.
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| Table 24.11 | Kerr Production Tonnes and Grade in 2022 PEA Mine Plan |
| Lift 1 625RL |
Measured |
Indicated |
Inferred |
| Tonnes (millions) |
- |
47.9 |
477.4 |
| NSR (Cdn$/t) |
- |
34.03 |
33.76 |
| Au (g/t) |
- |
0.25 |
0.30 |
| Cu (%) |
- |
0.53 |
0.48 |
| Ag (g/t) |
- |
1.3 |
1.7 |
| Lift 2 130RL |
Measured |
Indicated |
Inferred |
| Tonnes (millions) |
- |
- |
299.7 |
| NSR (Cdn$/t) |
- |
- |
35.76 |
| Au (g/t) |
- |
- |
0.33 |
| Cu (%) |
- |
- |
0.49 |
| Ag (g/t) |
- |
- |
1.8 |
| Combined |
Measured |
Indicated |
Inferred |
| Tonnes (millions) |
- |
47.9 |
777.2 |
| NSR (Cdn$/t) |
- |
34.03 |
34.53 |
| Au (g/t) |
- |
0.25 |
0.31 |
| Cu (%) |
- |
0.53 |
0.49 |
| Ag (g/t) |
- |
1.3 |
1.7 |
| Note: | Includes mineralized dilution taken at grade (the portion
of Indicated and Inferred material that is below the operating costs cut-off) and includes small percentage of material at zero grade. |
The mining sequence supporting the production is initiated
on Lift 1 at a location where NSR values are the highest so that early value is maximized. The mining then propagates radially from this
location and continues down the southern limb of the footprint. Lift 2 mining starts on the northern end and propagates southward to allow
for concurrent production from both Lifts.
Development Schedule
The pre-production phase of the Kerr mine is estimated to
be 5 years, which includes mine access, some initial footprint development, and construction of major mine infrastructure such as an underground
crusher, material handling system, shops, dewatering system and primary ventilation. The development schedule was generated using Deswik
software, and it assumes advance rates of 4 m/day and a maximum of 6 active headings in the first 2 years and 10 active headings thereafter.
The overall development strategy is to provide access to
the planned crusher location as soon as possible and to prioritize the development of the service drift and MTT conveyor drift. Following
this, extraction drifts, drawpoints, undercut, and pre-conditioning levels will be advanced to allow for cave initiation. Two intake and
two exhaust airways will be established during pre-production with the remaining airways driven as production requires.
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Blasting and Explosives
Explosives will be received from suppliers and stored in
the main surface explosive magazine. The bulk of the material will be ANFO for horizontal development and emulsion for up-holes, plus
initiators and accessories.
Underground explosives magazines will be constructed for
both Lift 1 and Lift 2 to service development and secondary reduction needs. Each magazine will have a one-week capacity.
Explosives will be used underground for five main purposes:
| ● | preparation for the development of mineralized areas |
| ● | development in barren material |
| ● | secondary blasting of boulders and hang ups |
Mining Equipment
The peak primary and support equipment requirements for the
Kerr mine are summarized in Table 24.12.
| Table 24.12 | Peak Mobile Equipment Requirements for Kerr |
|
Development
Equipment |
Unit |
Production
Equipment |
Unit |
Support
Equipment |
Unit |
| Jumbo |
12 |
LHD |
21 |
Electricians Truck |
3 |
| Haul Truck |
11 |
Truck |
19 |
Grader |
4 |
| LHD |
5 |
Drill Rig |
5 |
Lube Truck |
4 |
| Bolter |
15 |
Block Holer |
7 |
Mobile Crane |
2 |
| Explosive Loader |
4 |
Mobile Rockbreaker |
4 |
Mine Ambulance |
1 |
| Scissor Lift |
7 |
Water Cannon |
4 |
Fire Truck |
1 |
| Shotcrete Sprayer |
5 |
Boom Truck |
1 |
Mine Rescue Truck |
1 |
| Transmixer |
4 |
|
|
Backhoe |
4 |
| |
|
|
|
Water Truck |
1 |
| |
|
|
|
Sludge Truck |
1 |
| |
|
|
|
Cable Bolter |
4 |
| |
|
|
|
Telehandler |
5 |
| |
|
|
|
Small Personnel Carrier |
16 |
| |
|
|
|
Large Personnel Carrier |
6 |
Mine Workforce
The estimated workforce for Kerr is approximately 529 persons
at the peak of the pre-production construction period, and an average of 580 persons during the production period.
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| 24.16.5 | Mine Production Schedule (Open Pit and Underground Combined) |
The summarized production schedule results are shown in Table
24.13 and Figure 24.20, including both open pit and underground mining. The mine production plan starts using conventional large-scale
open pit mining equipment before transitioning into block cave underground bulk mining. The open pit at Upper Kerr, and the underground
operations at Iron Cap and Lower Kerr are sequenced from higher grade and lower development and operating cost areas first (higher profitability
to lower) to provide optimal cash flow. Upper Kerr pit with its lower preproduction and development capital cost is scheduled to provide
first mill feed followed by the underground operations at Iron Cap and then Lower Kerr.
The production from the block caves will ramp up and then
ramp down towards the end of their life. Lower Kerr block cave ramp up begins after Iron Cap ramp up is completed to avoid overlap of
block cave development.
| Table 24.13 | Summarized Production Schedule – Open Pit and Underground |
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| Figure 24.20 | KSM PEA Mill Feed Production Schedule |
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The proposed KSM plant will have a name plate capacity of
195,000 t/d. Peak mill feed production in the PEA plan is estimated to be 170,000 t/d. The process plant will receive mill feed from the
Kerr and Iron Cap mines.
Based on the available information, metallurgical test work
performed on various samples provides a reasonable indication of the mineralogical and metallurgical performance characteristics of the
materials for this 2022 PEA. The process flowsheet developed for the KSM mineralization is considered appropriate for the current 2022
PEA given the nature of the mill feed and similar metallurgical performance of the samples from the KSM deposits.
Several metallurgical test programs have been carried out
to assess the recoverability of copper, gold, silver and molybdenum values using the PEA flowsheet. Characterization and metallurgical
test work on Iron Cap and Kerr samples are presented in the pertinent test work reports, which are summarized in Section 13.0. This test
work examined grindability, concentration by flotation of copper and gold into a saleable concentrate, and the further recovery of gold
and silver from gold-bearing sulphide materials (cleaner scavenger tailings and pyrite concentrate) by leaching.
Metallurgical performance projections from this test work
are presented in Section 13.6.
Comminution test work results indicate that the samples from
all the deposits are moderately hard for SAG and ball milling.
Flotation test work (batch and locked cycle) indicates that
the mineralization is amenable for concentration into a saleable copper-gold concentrate with no significant penalty elements. Following
flotation, cyanidation tests showed that it was possible to extract gold and silver by CIL leaching of gold-bearing tailing from the cleaner
scavenger separation and pyrite concentrates derived from pyrite flotation of rougher flotation tailing. Preliminary trade-off studies
indicate that cyanidation of Kerr and Iron Cap gold-bearing sulphide materials may not be economic due to elevated copper/gold ratios
and low gold adsorption rates onto activated carbon. Additional test work to improve gold and silver recovery and economic trade-offs
are required to optimize the process. Cyanidation of gold bearing pyrite materials are therefore not used in the 2022 PEA.
The metallurgical test results obtained from the various
test programs have been used to predict plant metallurgical performance parameters for copper, gold, silver and molybdenum. The metallurgical
performance projections of the five KSM mineralized zones are summarized in Section 13.6. In addition, work has been performed to determine
the consumption of reagents in flotation and cyanidation and grinding media in comminution.
The process circuit incorporates three stage crushing, one
stage milling, conventional flotation processes for the recovery of copper, gold, silver, and molybdenum.
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The process plant is designed appropriately in accordance
with the test work and consists of five separate facilities for the handling and processing of mill feed:
| ● | Underground primary crushing and a handling facility at the proposed underground blockcaving and crushing facilities, excluding the
materials from upper Kerr pit which will be trucked and crushed on the surface at the Mitchell site |
| ● | the crushed mill feeds will be transported by conveyor systems from the Mitchell pit area and the Kerr and Iron Cap underground blockcaving
areas to train loading hoppers |
| ● | train transportation of mill feed through the MTT to the process plant |
| ● | the process plant includes: |
| o | Coarse mill feed stockpiles |
| o | Copper-gold-silver-molybdenum bulk flotation, regrinding, 3-stage cleaner flotation and copper and molybdenum separation flotation
if molybdenum grade is economical to recover |
| o | Pyrite flotation and regrinding |
| ● | copper concentrate dewatering and handling |
| ● | tailing delivery system to deposition in the TMF. |
| 24.17.2 | flowsheet description |
There will be three grinding and flotation lines, each line
will be able to handle 65,000 t/d. When the mill feed rates are low, especially during the initial startup and late years, the process
lines can be operated based on mill feed rate.
Comminution
The primary crushing facilities located at the Mitchell OPC
will reduce the upper Kerr. Mill feed is trucked from the Sulphurets open pit mine site to the Mitchell OPC for crushing. Similarly, Mill
feed from the Kerr open pit mine site is trucked to the Mitchell OPC for crushing to approximately 80% passing 150 mm using two 1,524
mm x 2,260 mm gyratory crushers. Kerr and Iron Cap mill feeds are separately crushed at the blockcaving and crushing facilities located
underground and transported separately to the MTT train loading surge bins via different conveyor systems.
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Crushed mill feed is reclaimed from the train loading surge
bins onto the MTT trains for transport to the main process plant site located at Treaty site, approximately 22 km northeast of the mine
site.
Mill feed from the mine site through the MTT tunnel is delivered
to two parallel mill feed stockpiles. In the early years, the upper Kerr material with supplement of the Iron Cap material will be main
feeds to the mill. Starting from PEA Year 6, the mill feed will be supplied from Iron Cap and Kerr underground mines, the latter of which
will introduce feed to the plant in PEA Year 7.
There are two coarse material stockpiles at the Treaty site.
The stockpiles will be located at the exit portal of the MTT tunnel and will have a total live capacity of 180,000 t (90,000 t each
stockpile). The coarse mill feed will be reclaimed and be further crushed by four cone crushers (three in operation and one on standby,
as design) and then six HPGRs in closed circuit with vibrating screens.
The screen undersized material from the HPGR circuit will
be fed to six ball mills in a closed circuit with hydrocyclones. The grinding circuit will employ six conventional ball mills in three
process lines to grind the HPGR product to a particle size of 80% passing 125 µm to 150 µm. Each ball mill will be in closed-circuit
with a cluster of hydrocyclones. The hydrocyclone underflow will gravity-flow to the ball mill feed chute, while the overflow will gravity
flow to three copper-gold rougher flotation lines.
Flotation
The products from the primary grinding circuits will be fed
into copper-gold/molybdenum rougher/scavenger flotation circuits, consisting of three operation circuits in parallel. The copper rougher
flotation concentrates from the flotation circuits will be reground in two stages to a particle size of 80% passing, approximately 15
to 20 µm in the tower mills.
The reground rougher concentrate will then be upgraded in
a cleaner flotation circuit with three stages of bulk copper cleaner flotation, producing a copper-gold or copper-gold/molybdenum concentrate
with an average grade of approximately 25% Cu. Depending on the molybdenum content in the copper-gold/molybdenum bulk concentrate, the
concentrate may be further treated by flotation to produce a molybdenum concentrate and a copper-gold concentrate. The molybdenum concentrate
will be leached using the Brenda Mines procedure to reduce copper and lead contents.
The final copper concentrate will be dewatered by a combination
of thickening and pressure filtration to approximately 9% moisture before being transported to the Stewart port site for ship loading
and delivery to copper smelters, while the molybdenum bulk concentrate will be further dried prior to being shipped in bags to the port
at Prince Rupert for delivery to molybdenum smelters.
The copper-gold/molybdenum rougher scavenger flotation tailing
will be subjected to further flotation to remove remaining sulphide minerals, mainly pyrite, which will be disposed together with the
cleaner scavenger tailing into a separate lined tailing storage cell in the TMF. Depending on the copper and gold contents, the pyrite
rich flotation concentrate may be reground in tower mills to a particle size of 80% passing approximately 20 µm and floated
for residual copper and gold values. The copper concentrate will be recycled back to the copper-gold bulk flotation circuit.
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The comminution circuits and flotation circuits are depicted
in Figure 24.21.
Reagents
All the reagents will be prepared in a dedicated reagent
preparation and storage facility within a containment area. Liquid reagents will be added in the undiluted form via metering pumps. Solid
reagents will be prepared into adequate strength solutions in dedicated mixing tanks and stored in holding tanks to be added to the processes
via metering pumps.
Water and Pressurized Air Supply
Three separate water supply systems will be provided to support
the operation:
| ● | A process water system for grinding/flotation circuits. |
Plant air service systems will supply blower air to flotation,
and high-pressure air to filtration and general plant and instrumentation services.
Assay and Metallurgical Laboratory
The assay laboratory will be equipped with necessary analytical
instruments to provide routine assays for the mine, process, and environmental departments.
The metallurgical laboratory, with laboratory equipment and
instruments, will undertake all necessary test work to monitor metallurgical performance and to improve the plant production and metallurgical
results.
Process Control and Instrumentation
The plant control system will consist of a DCS with PC-based
OIS located in control rooms at the process facilities. Process control will be enhanced with the installation of an automatic sampling
system. The system will collect samples from various lines for on-line analysis and the daily metallurgical balance.
CCTV support will be provided at various locations at the
crushing and plant facilities to ensure comprehensive site monitoring.
Process Flow Diagram
Figure 24.21 below illustrates the overall process block
flow diagram. The major design consideration in the process plant equipment sizing and layout is the use of the largest equipment sizing
available in order to minimize pumping and piping requirements, process building footprint and capital costs.
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| Figure 24.21 | Overall Process Block Flow Diagram |
Source: Tetra Tech (2022)
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| 24.18 | Project Infrastructure |
| 24.18.1 | On-Site Infrastructure |
The water and waste management structure designs in the 2022
PEA are based on those described in the approved EA with conceptual-level adjustments to the 2022 PEA mine plan layouts, staging plan,
and capacities required for the 2022 PEA mine production schedule.
The approximate length of existing single axis water diversion
tunnels at PEA Year 1 in the 2022 PEA is 18 km and comprise the MDT, MTDT, NPWDA and MVDT.
Rock Storage Facility
The 2022 PEA rock storage requirements are relatively small
considering there is only one deposit mined by open pit methods producing waste rock (e.g., Upper Kerr). The 2022 PEA waste management
plan consolidates all waste rock into a single facility, including minor waste volume from initial underground development, into the Mitchell
Valley as pit backfill which is contiguous with the Mitchell RSF. No waste rock in the 2022 PEA is placed in the McTagg RSF or the Sulphurets
Pit Backfill RSF.
Water Management
The overall 2022 PEA operational water management and water
treatment designs are, aligned with management plans described in the approved EA and no adjustments to the EA boundary were required
since the three areas to be mined in the 2022 PEA mine plan were inside disturbance areas identified in the EA.
The WSD crest elevation is kept at the same elevation as
in the approved EA for the 2022 PEA. With the reduced tonnage of waste rock, WSD storage and WSD crest elevation could potentially be
reduced, although these optimizations have not been adopted for the 2022 PEA.
HDS Water Treatment Plant
In the 2022 PEA the catchments were reduced from the EA due
to a reassessment of catchment areas, a change in pit areas, and reducing the total waste rock tonnage. This reduction in catchment area
has resulted in a reduction in the amount of run off from the catchment area that has to be treated prior to discharge to the environment
(KCB, 2020a). The direct effect of this reduction is that the design rate for the HDS water treatment plant (freshet maximum) that processes
the mine water run-off, resulting in a reduction in the estimated number of HDS water treatment trains required from seven for the EA
to about four for the 2022 PEA at the concept level.
Tailings Management
TMF management philosophy and criteria for the 2022 PEA are
generally consistent with the TMF designs and configuration presented in the approved EA. The 2022 PEA has a peak throughput with an annual
average of 170,000 t/d during early operations, so tailings storage would account for this placement rate and maintain requisite supernatant
pond operational volume and freeboard where storage occurs.
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Cost allowances for tailings storage and management have
been included in the 2022 PEA. Tailing management is envisioned as a combination of technically viable storage approaches that can be
refined in future studies that can comprise appropriate and responsible solutions depending on best selected technology. Early definition
of extended tailings management beyond the permitted capacity would be required well before deciding to proceed with the 2022 PEA production
plan to allow for exploring all facets of best available technology.
MTT Rail System
MTT rail system will transport crushed mill feed, freight,
fuel and personnel between the Mitchell OPC and Treaty OPC.
Crushed mill feed will be conveyed to one of three 15,000
t capacity underground bins. Loading chutes under the bin will feed mineralized material into train wagons for transport to Treaty OPC
where the wagons will bottom dump the crushed mill feed into a 15,000 t capacity surge bin. Apron feeders will then reclaim the mill
feed to a belt conveyor which will report to the 60,000 t live capacity COS.
Ten mill feed trains will be needed to deliver an average
of 170,000 t/d of mill feed to the process plant. Each mill feed train will be made-up of two 140 t electric locomotives and 16 of
42 m3 bottom-dump mill feed wagons.
Specially configured personnel and freight trains will transport
freight, fuel, and personnel through the MTT. Staging areas at each end of the MTT for marshalling and loading/unloading trains at each
end will separate these activities from those for mill feed transport. Personnel, freight, and fuel handling will be scheduled during
the day shift operations. A maintenance shop and siding for rolling stock will be located in the Treaty staging area.
Train operations, with the exception of train loading, will
be controlled by an automated controls and scheduling system. The main control room will be located in the Treaty staging area. Locomotives
will be unmanned and not require engine drivers.
The MTT rail system can increase short term upside capacity
when required for production recovery by adjusting track time allocation between mill feed, freight and personnel transport. Longer term
recovery requirements will need to be addressed in future studies with considering Treaty stockpiling, detailed track logistics studies,
and rolling stock availability.
| Seabridge Gold Inc. | 24-39 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
Facilities, Buildings, and Services
Facilities, buildings and services in the mine site and Treaty
OPC will include the following:
| ● | fuel receiving, storage, and dispensing |
| ● | medical buildings and ambulance stations |
| ● | consulting engineers’ and contractors’ offices and storage/laydown areas |
| ● | warehouses, cold storage, and maintenance buildings |
| ● | truck maintenance and wash bay |
| ● | accommodation facilities including receptions, lunch rooms and cafeterias, mine dry and wash cars, recreation facilities, kitchen,
and parking areas |
| ● | potable, process, fire and fresh water systems |
| ● | laydown and equipment and materials storage areas |
| ● | waste management storage and handling and Incinerators |
| ● | security fencing and gates |
| ● | explosives magazines and AN prill storage areas |
| ● | explosives manufacturing plant |
| ● | auxiliary truck and support vehicles |
| ● | electrical power supply and distribution. |
| 24.18.2 | Off-site Infrastructure |
| 24.18.2.1 | Electrical Power Supply |
Electrical power will be supplied to the KSM Site from the
BC Hydro NTL 287 kV transmission line that runs from the Skeena Substation near Terrace, BC, to a substation near Bob Quinn Lake,
further north of the KSM Site.
KSM will connect to the NTL transmission line at the new
Treaty Creek Terminal (Switching Station) located adjacent to Highway 37, approximately 18 km south of Bell 2 Lodge. This station,
designated TCT by BC Hydro, is currently under construction. A new 30 km long, 287 kV transmission line tap will connect this
substation to the KSM Main Substation No. FLT1 at the Treaty OPC.
| Seabridge Gold Inc. | 24-40 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
BC Hydro has completed an updated System Impact Study (SIS)
that confirms a Contract demand of 245 MW for KSM. KSM has signed (Feb. 2022) a Facilities Agreement for the supply of 25 MW of construction
utility power supply. A second Facilities Study will be carried out during the KSM initial construction period leading to a second Facilities
Agreement for the supply of 245 MW of power when mine operations start.
The cost of electric power at the site main substations,
including transformer and line losses, is Cdn$0.0596 per kilowatt hour.
The KSM 287 kV transmission line tap will terminate at the
compact gas insulated (GIS) main substation designated FLT1 at the Treaty OPC. This substation steps the voltage down to 25 kV to supply
the various process plant and other area feeders and 138 kV to supply the cable feed thought the MTT to the Mitchell area.
The 25 km long 138 kV cables through the MTT will terminate
at GIS substation FLT2 located at the Mitchell OPC. This station steps the voltage down to 25 kV for local distribution and 69 kV for
distribution to more remote facilities. The substation has an installed capacity of 270 MVA with two stages of transformer fan cooling
in operation (under emergency conditions) and provides full redundancy of electric power supply and flexibility for maintenance.
The 2022 PEA includes 3 energy recovery systems. These systems
recover energy from the McTagg diversion tunnel, the discharge from the WSF to the WTP, and the North Tailings Line. The plants generate
an average of 60,122 megawatt hours per annum over the first 10 years of operation with an annual value of Cdn$6,078,000, based on the
BC Hydro Tier 2 rate for energy. Subsequent to the first decade, the generation varies somewhat, but the McTagg and WTP energy recovery
systems will continue to operate after mine closure.
The access roads to the KSM site during the 2022 PEA will
be as follows:
Inbound equipment and materials will be transported either
by barge to Stewart, BC, or by rail to Terrace, BC, where these loads will be consolidated at local marshalling yards or staging areas
for onward transport by truck to KSM.
| Seabridge Gold Inc. | 24-41 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
Copper concentrate will be transported by truck to a deep
water port in Stewart, BC, where it will be held in storage until loaded onto oceangoing vessels.
| 24.18.3 | Iron Cap Project Infrastructure |
Road and Logistics
The main access for personnel and materials to the Iron Cap
operations is through the MTT tunnels originating in the Treaty Valley and connecting to the Mitchell OPC. Access is then via the Iron
Cap access tunnel collared nearby. All personnel will stay in a mining camp located in the Mitchell Valley area. Materials required for
the operation of the mine will be delivered via the MTT tunnels to warehouses in the Mitchell Valley.
Underground Crushers and Conveyors
The Iron Cap block cave will produce 90kt/d at steady state
production. The mill feed will be transported by LHD directly from the drawpoints to one of three ore passes located along each extraction
drift. Each pass is fitted with a stationary rock breaker and the sized material gravity feeds to the haulage level where continuous loading
chutes transfer the uncrushed material into train cars. Electric locomotives then transport the cars to one of two crusher unloading stations
where the material is bottom dumped into the crushers. Two 60 in x 75 in gyratory crushers will be installed to crush the mill feed to
152 mm size.
The crushed material will be transported by a 2.4 km long
series of conveyors feeding two ore bins that in turn feed the MTT trains for transfer to the process plant. The conveyors will vary in
width from 54 in to 72 in depending on location and requirement. The belts do not exceed a 15% grade.
Conveyor structures will be back mounted to provide ease
of cleaning under the belts. Conveyor drives and tail and head pulleys will be sill mounted for ease of installation and maintenance.
Underground Mine Service Water System
The mine will require 199 m3/h of process
water for the bolters and for the development and production drills. In addition, it is estimated that 50 m3/h of water will
be required for the conveyor fire suppression systems. This water will be supplied through the Iron Cap access tunnel from pumps in the
Mitchell Valley. The water will be delivered to the working face through steel pipes.
Underground Electrical Reticulation System
The Iron Cap mine will require approximately 24.4 MW of average
electrical power at peak operation. The main contributors to this demand are the crushers, conveyors, ventilation fans, and drill jumbos.
The annual power consumption is estimated to be 213,700 MW hours per annum during peak production.
The main power will be supplied to the underground from Mitchell
area substation FLT2 through two redundant 25 kV cables hung from the back of the Iron Cap access tunnel and MTT train tunnel to
create a ring main style system. Each of the main levels will have a 25 kV feed except the haulage level will have separate feeders
for the west and east train loops and the extraction level will also have two separate feeders. The 25 kV distribution voltage will be
stepped down to the required utilization voltage by skid mounted dry-type unit substation transformers. Equipment that draws larger loads
(e.g., ventilation fans, conveyors and crushers) will be fed from local permanent transformers.
| Seabridge Gold Inc. | 24-42 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
Waste Storage Facilities
Approximately 4.8 Mt of development rock (mineralized and
non-mineralized) will be generated during the four-year pre-production period and hauled by truck to the Mitchell OPC. The 2022 PEA mine
plan assumes the NPAG portion of this material will be used in construction of pads and the other material will either be hauled to the
Mitchell RSF or fed into the Mitchell mill feed. After PEA Year 1, once one of the crushers and the conveyor are installed, all development
material will be crushed and conveyed to the MTT bins and hauled to the mill by the trains. Most of this material will be mineralized
rock from within the footprint.
Water Management
The underground mine dewatering system (refer to 24.16.3
Mine Dewatering) is discharged into the North Pit Wall Dewatering Adit (NPWDA) via graded drifts that allow for water to drain by gravity.
From there, it will flow by gravity to the WSF.
Surface Infrastructure
The 2022 PEA design assumes the surface infrastructure required
to support the Iron Cap operations will be integrated with the overall site infrastructure. This will include major equipment maintenance
and fuel provision.
Surface infrastructure required to support operations include:
| ● | equipment shop for major repairs |
| ● | control room and training center |
| ● | first aid station and mine rescue room |
| ● | construction and operations camp |
| ● | mining contractor facilities |
| Seabridge Gold Inc. | 24-43 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
Underground Infrastructure
Underground facilities at Iron Cap include:
| ● | refuge stations (fixed and portable) |
| ● | offices, map and meeting room, training room |
| ● | fire water tanks and fire suppression systems, primarily for crushers, conveyor transfers and shops. |
| 24.18.4 | Kerr Project Infrastructure |
Road and Logistics
The main access for personnel and materials to the mining
complex in Mitchell Valley is through the MTT tunnels connecting the Treaty Valley to the Mitchell OPC. From the Mitchell OPC, a series
of roads developed for the overall KSM site will lead to the Kerr surface complex area just outside of the Kerr portals. All personnel
will stay in the mining camp located in the Mitchell Valley area. Materials required by the Kerr mine will be delivered via the MTT tunnels
to the warehouses in the Mitchell Valley.
Kerr mine is accessed through a series of portals and ventilation
adits along the northwestern base of Kerr Mountain. Mine access is primarily through two of the intake drifts, one of which directly connects
to the footprint area as a main ventilation intake drive, and the other eventually parallels the UG conveyor as a service drive that leads
to the crusher area. These two primary drifts will connect via ramps to the lower lift (Lift 2) to provide access to the lower elevation.
Underground Crushers and Conveyors
The Kerr block cave will produce 80 kt/d at steady state
production. The mined material will be transferred from production drawpoints to mineralized material passes fitted with stationary rock
breakers to size the material before it gravity feeds to the haulage level below. At the haulage level, 55 t trucks will haul the material
to the crushers.
The mine will produce from two cave Lifts over LOM, the
625 level (Lift 1) and the 130 level (Lift 2). Each lift will be serviced by two, 60 in x 75 in gyratory crushers on the haulage level.
These crushers are sufficient to support the peak production rate of
80 kt/d. Each crusher will have three dumping points for
rear dump articulated underground haul trucks. The crushers will discharge to incline conveyor systems which connect to a series of conveyors
to transfer the material to the MTT transfer bin at the portal.
There will be a total of 10.2 km of underground conveyor
belts with widths ranging from 54 in to 72 in. Conveyor structures will be back mounted to provide ease of cleaning under the belts. Conveyor
drives and tail and head pulleys will be sill mounted for ease of installation and maintenance. Most conveyor inclinations are at 15%
or less and none exceed 17%.
Underground Mine Service Water System
It is estimated that the mine will require 203 m3/hr
of process water for the bolters and the development and production drills. In addition, it is estimated that 50 m3/hr will
be required by the conveyor fire suppression systems. Mine service water is sourced from the surface complex near the Kerr portal area
and piped underground through a series of pipes to the main areas for each lift. Smaller pipelines will branch off the main feeder pipe
on each level to support excavation of mine development headings, longhole drilling, shop activities, etc.
| Seabridge Gold Inc. | 24-44 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
Underground Electrical Reticulation System
The Lower Kerr mine will require an average of 36.6 MW electrical
power at peak operation. The main contributors to this demand are the crushers, conveyors, ventilation fans, and drill jumbos. This load
is larger than typical as it includes requirements for significant pumping plus the long conveyor to the MTT portal. The annual power
consumption is estimated to be 318,000 megawatt hours per annum during peak production.
The main power will be supplied to the underground from
the Mitchell area substation
FLT2 via a 69 kV distribution line to a modular 69 to 25
kV surface substation near the mine. A 25 kV ring main system will feed the mine via Teck cables from this substation. Each of the main
levels will have a 25 kV line which will be stepped down to the required voltage by skid mounted dry-type transformers. Equipment
that draws larger loads (e.g., ventilation fans, conveyors and crushers) will be equipped with a permanent transformer.
Waste Storage Facilities
Approximately 7.3 Mt of waste rock (mineralized and non-mineralized)
will be generated and brought to surface during the initial 5-year pre-production period. NPAG portion of this material will be hauled
by truck to the Mitchell RSF. The mineralized material will be hauled to the Mitchell OPC and fed into the mill feed.
After 2022 PEA Year 7, once one of the crushers and the conveyor
to the MTT are installed, all development material will be crushed and conveyed to the MTT bins and hauled to the mill by the trains.
Most of this material will be mineralized rock from within the footprint.
| Seabridge Gold Inc. | 24-45 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
Water Management
The underground mine dewatering system (refer to Section
24.16.4 Mine Dewatering) is discharged to the surface complex established outside of the Kerr portal areas. From there the water will
gravity flow via pipeline to the WTP platform and then be pumped to the WSF in the Mitchell Valley.
Underground Electrical Reticulation System
for Dewatering
The mine dewatering system at Kerr requires an average of
4 MWh with a maximum of 30 MWh during a peak storm event, which is greater than the power requirements of the mine under normal conditions.
The strategy during a peak storm event will be to shut down or reduce operations in the underground mine along with other site facilities
when the high-powered pumps are required. This will allow power to be diverted from normal operations to power the pumps.
The main power will be supplied to the underground from the
Mitchell area substation FLT2 through a 25 kV cable hung from the back of the access ramp and conveyor tunnel to create a ring main
style system. Each of the main levels will have a 25 kV line which will be stepped down to the required voltage by skid mounted dry-type
transformers. Equipment that draws larger loads (e.g., ventilation fans, conveyors and crushers) will be equipped with a permanent transformer.
Surface Infrastructure
The 2022 PEA design assumes the surface infrastructure required
to support the Lower Kerr operations will be integrated with the overall site infrastructure.
Surface infrastructure required to support operations will
include:
| ● | control room and training center |
| ● | first-aid station and mine rescue room |
| ● | construction and operations camp |
| ● | mining contractor facilities |
| Seabridge Gold Inc. | 24-46 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
Underground Infrastructure
Underground facilities at Lower Kerr include the following
on each lift:
| ● | extraction level equipment shop |
| ● | haulage level equipment shop |
| ● | concrete / shotcrete slickline and loading system (for Lift 2 only) |
| ● | offices, map and meeting room, training room |
| ● | fire water tanks and fire suppression systems, primarily for crushers, conveyor transfers and shops. |
| 24.19 | Market Studies and Contracts |
COPPER CONCENTRATE
Seabridge engaged NSA to provide opinion reports on marketing
inputs in 2016 and review the 2019 copper-gold concentrate market and related concentrate treatment charges, excluding offsite transportation
costs. In May 2022, NSA was asked to provide an update to this opinion focusing on the validity of the assumptions. The current information
and options mainly come from the 2016 and 2019 Opinion Reports with applicable comments where appropriate. The information and options
in this section come from the opinion reports. No smelter contracts are currently in place or being negotiated. All currency amounts used
in this section are in US dollars, unless otherwise specified.
MARKETABILITY
When considering the marketability of copper concentrates,
quality and quantity are determining factors. There are considerable variations in the quality of concentrates and the requirements of
various smelters do vary; such variations relate to the technical abilities of the smelter and its overall concentrate feed and blend.
Gold, silver and copper are key elements in determining concentrate salability, as well as iron, sulphur and other impurities.
| Seabridge Gold Inc. | 24-47 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
While smelters prefer a feed with about 30% copper and similar
amounts of iron and sulphur, copper grades from many major high-grade suppliers have been falling and the market is seen the blend for
many smelters dropping to a copper content of about 27%. Apart from the copper content, levels of iron, and sulphur, other key elements
including gold and silver and impurity content are factors in concentrate market.
Based on the impurity levels projected by Tetra Tech using
the test results completed to date, concentrates are relatively clean. Depending on the prevailing market at the time of contract negotiations,
penalties will likely be minimal if any. Certain smelters in Japan, South Korea, and Europe, have more interest in copper concentrates
with high gold content.
COPPER CONCENTRATES SMELTING TERMS
NSA suggests that the annual benchmark terms are likely to
be a guide to future levels. for 2022, a copper treatment charge with a range being TC $90 to $95/dmt and RC $0.090 to 0.095/lb of refined
copper in constant dollars can be assumed. The copper-gold concentrate market review by NSA in Q4 2019 foresaw that the treatment charges
and refining charges would be slightly lower than the 2016 projections. For 2022 PEA, Tetra Tech suggests keeping the smelting terms unchanged.
Also, the payable terms identified in 2016 should be kept unchanged as below.
PAYABLE METALS
| |
Copper |
Pay 96.5% with a minimum deduction of 1 unit (amount deducted must equate to a minimum of 1% of the agreed concentrate copper assay). |
| |
|
|
| |
Silver |
If over 30 g/dmt pay 90%. |
| |
|
|
| |
Gold |
A scale is applicable with some variations of the following: |
| ● | less than 1 g/dmt, no payment |
| ● | 7 to 10 g/dmt, pay 96.5% |
| ● | 10 to 20 g/dmt, pay 97.0% |
| ● | over 30 g/dmt pay 97.75%. |
REFINING CHARGES
| |
Copper: |
$0.095/lb payable copper |
| |
|
|
| |
Gold: |
$6.00 to $8.00/oz payable gold |
| Silver: | $0.50/oz payable silver |
| Seabridge Gold Inc. | 24-48 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
TREATMENT CHARGES
| Treatment Charge: | $95.00/dmt CIF-FO main smelter port |
PRICE PARTICIPATION
Not applicable at present.
PENALTIES
| Arsenic: | $2.50 to $3.00 per 0.1% over 0.1% up to 0.5% arsenic |
| Antimony: | $3.00 to $4.00 per 0.1% over 0.1% antimony |
| Lead: | $2.00 to $3.00 per 1% over 0.5% to 1.0% lead |
| Zinc: | $2.00 to $3.00 per 1% over 2% to 3% zinc |
| Mercury: | $2.00 per each 10 ppm over 10 ppm mercury |
| Bismuth: | $3.00 to $5.00 per 0.01% over 0.03 to 0.05% bismuth |
| Selenium: | $3.00 to $5.00 per 0.01% over 0.05% selenium |
| Tellurium: | $4.00 to $5.00 per 0.01% over 0.02% to 0.03% tellurium |
| Fluorine: | $1.00 to $2.00 per 100 ppm over 300 ppm fluorine |
| Chlorine: | $1.00 to $3.00 per 100 ppm over 300 ppm chlorine |
Furthermore, penalties may also vary from smelter to smelter.
It should be noted that for the elements where a percentage range is used, this relates to ranges of penalty thresholds that are negotiated.
OTHER OFFSITE COSTS
Various indirect costs other than smelter charges include:
| ● | losses are assumed to be 0.1% or less |
| ● | marine transport insurance is assumed to be in the range of 0.10 to 0.15% of net invoice value of the concentrate |
| ● | third party supervision, assaying and umpire costs are assumed to be approximately US$1.00/dmt |
| Seabridge Gold Inc. | 24-49 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| ● | the cost of marketing varies with concentrate tonnage, location, and number of smelters to be shipped. For the 2022 PEA, the estimated
marketing cost is in the range of US$5.00 to US$10.00/dmt |
| ● | the copper concentrate transportation costs are based on the following assumptions by Tetra Tech: |
| o | port storage and handling: US$17/wmt |
| o | ocean transport to Asian port: US$49.00/wmt. |
| 24.20 | Environmental Studies, Permitting and Social or Community Impact |
The KSM mine development plan was subject to the BC Environmental
Assessment Act (BCEAA, the Act), the Canadian Environmental Assessment Act- 1992 (CEAA), and Chapter 10 of the Nisga’a Final
Agreement (NFA).
As of May 2022, the Property has completed the provincial
and federal environmental assessment review processes, in accordance with the principles of the Canada-BC Agreement on Environmental Assessment
Cooperation (Cooperation Agreement 2004), and the appropriate certificates/approvals have been obtained for this stage of the KSM Property’s
development. Additionally, permits for early-stage construction activities, continuation of exploration, certain permit and project approval
renewals have also been obtained.
KSMCo has developed long term respectful relationships with
the Nisga’a Nation, the Tahltan Nation and the three other First Nations groups who are potentially influenced by the KSM
development, over the past twelve years. These relationships, including the requirements contained within the Benefits Agreement signed
with the Nisga’a Nation in June 16, 2014, the Impact Benefit Agreement signed with the Tahltan in July 8, 2019 and the Sustainability
Agreement negotiated with the Gitanyow Wilps, also signed in June 16, 2014 respectively, would remain in good standing and the agreements
would continue to be adhered to by the Property operating company if the proposed mine plan outlined in the 2022 PEA is implemented.
KSMCo has undertaken comprehensive biophysical and socioeconomic
studies and reports in support of the Application /EIS (Rescan 2013) in relation to the EA process and permitting, and continues specific
monitoring and studies to comply with approval conditions, management plans and further permitting. Fish habitat offset plans are being
permitted and constructed. The 2022 PEA covers the same geographic area and valued environmental and social components, and will involve
similar disturbances required to develop infrastructure and the mine as was previously assessed and approved.
Based upon completion and evaluation of additional technical
studies required to identify and examine the net environmental benefit of the 2022 PEA, regulatory approval would be forthcoming only
after the appropriate engagement and information sharing has occurred with the Nisga’a Nation, the Tahltan Nation and First
Nations whom have an interest in KSM.
| Seabridge Gold Inc. | 24-50 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
The 2022 PEA mine design works within the EA to reduce the
overall impact of developing the Kerr and Iron Cap deposits and the following items:
| ● | large majority of mill feed produced from underground block cave mines with a subsequent smaller surface disturbance relative to open
pit mining |
| ● | placement of the proposed tonnage of waste rock from Upper Kerr open pit mining on prior disturbed areas in Mitchell Valley from mining
activity depicted in the 2022 PFS |
| ● | utilizing infrastructure built during the 2022 PFS production plan, thus no major additional disturbance over that plan and maintaining
impact within the limits of the EA. |
An extensive system of water management facilities will be
constructed and maintained throughout the life of the KSM mine to divert fresh (non-contact) water away from disturbed areas and to collect
water that has contacted disturbed areas (contact water) for treatment before release into the environment
The proposed management of waste rock is outlined in the
Rock Storage Facilities Management and Monitoring Plan, which can be found in Volume 26 of the Application/EIS (Rescan 2013), in
accordance with definition as a major dump as defined under Section 10.5.5 of the Code (BC EMLI 2021).
Mine reclamation and liability cost estimates are developed
in accordance with the Interim Major Mine Reclamation Security Policy (EMLI 2022), Code and applicable guidelines, The closure plan costs
reflect the mine plan outlined in the 2022 PEA. Closure costs comprise physical closure (e.g., grading, covering and revegetation); access
costs for post-closure activities; monitoring, inspection, and maintenance; and post-closure water treatment.
| Seabridge Gold Inc. | 24-51 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| 24.21 | Capital and Operating Cost Estimates |
The capital cost estimate is the product of engineering supporting
the 2022 PEA. The unit rates used for the 2022 PEA capital and operating estimates (labour, power, fuel and other consumables) are based
on recent price quotes and estimates. Well established internal benchmarks were used to check capital and operating costs to verify reasonableness
of cost levels. These benchmarks are internal to each company.
The capital cost estimates were produced by the consulting
firms named in Table 24.14 with the area of responsibility for each firm identified.
| Table 24.14 | Capital Cost Estimate Responsibilities by Firm |
| Capital Cost Area |
Firm Responsible |
| Open pit mine development and related infrastructure, equipment, dewatering, wall depressurization, capitalized operating costs, MTT and associated infrastructure, indirects, and contingency |
MMTS |
| Underground mine development and related equipment, dewatering, ventilation and services, infrastructure, indirects, and contingency |
WSP Golder |
| Underground material handling for Iron Cap and Kerr block caves |
Tetra Tech |
| Process plant and related ancillary facilities |
Tetra Tech |
| Electrical power supply and energy recovery |
W. N. Brazier Assoc. |
| TMF |
KCB |
| Construction indirects (except for mining, TMF), and contingency (except for mining, TMF) |
Tetra Tech |
| 24.21.1 | Capital Cost Estimate |
The 2022 PEA level estimate includes:
| ● | direct field costs of executing the mining, construction, installation and commissioning of all structures, utilities, materials,
and equipment |
| ● | indirect costs associated with spares, initial fills, freight/logistics, commissioning, EPCM, and vendor assistance |
See Table 24.15 for a summary of the 2022 PEA capital cost
estimate, summarized by activity.
| Seabridge Gold Inc. | 24-52 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| Table 24.15 | 2022 PEA Capital Cost Estimate Summary |
| Area |
Initial |
Sustaining |
Total |
| US$ M |
US$ M |
US$ M |
| Direct Costs |
|
|
|
| Mine |
828 |
6,678 |
7,506 |
| Process |
0 |
651 |
651 |
| TMF |
74 |
664 |
738 |
| On-site Infrastructure |
26 |
573 |
599 |
| Power Supply/Energy Recovery |
0 |
112 |
112 |
| Total Direct Capital |
927 |
8,678 |
9,606 |
| Indirect cost |
253 |
1,249 |
1,502 |
| Contingency |
320 |
2,824 |
3,145 |
| Total Estimated Total |
1,500 |
12,752 |
14,252 |
| Notes: | 1 Sums may not add due to rounding |
| | 2 PST is not included, please see section 24.22
for details.
3 All costs associated with closure cost are addressed
separately in financial analyses outside of capital.
4 Most of the sustaining on-site infrastructure
is included in the mine category.
5 Mine direct costs include for crushing, conveying
and power infrastructure.
|
Basis of Estimate
This estimate falls under the AACE® Class
5 Estimate classification and its accuracy is expected to be within -30%
to +50% of final 2022 PEA cost.
Initial capital cost is defined as all costs associated with
development of the operation until first mill feed in PEA Year 1. It includes mine, TMF and on-site infrastructure.
Sources of information for the 2022 PEA capital cost estimate
include, but are not limited to, vendor quotations, in house database or historic data.
Indirect Costs and Contingency
Allowances were made for indirect costs based on in-house
database, historic data or 2022 PEA parameters. The overall factor applied to the direct capital costs to estimate indirect costs was
approximately 26.1% for non-mining categories.
An overall contingency of about 28.3% was applied for the
2022 PEA. Contingency is applied to the sum of direct and indirect costs.
Sustaining Capital
The majority of the sustaining capital costs comprise Kerr
open pit, and development of the Iron Cap and Lower Kerr block cave mines.
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The sustaining capital for the Mine Site is US$6,678 billion.
This number covers the direct capital costs for the LOM and includes all open pit and underground mining operations, as well as Mitchell
pit backfill direct capital cost.
At the plant site, the majority of the sustaining capital
cost is for replacing infrastructure at regular intervals during the PEA 39-year mine life.
Funding of Initial Capital
The 2022 PEA is evaluated as a standalone development after
completion of the 2022 PFS mine plan. The owner would likely plan the development of the 2022 PEA over the final 4 years of the mine operations
described in the 2022 PFS, however, the costs and revenues for the two studies are reported separately. The post-tax cashflow estimated
for the last 4 years of the 2022 PFS significantly exceeds the estimated 4 years of initial capital for the 2022 PEA and the owner could
fund construction of the 2022 PEA development from operating cashflow.
| 24.21.2 | Operating Cost Estimate |
The operating cost estimate is the product of engineering
developed during the previous studies and the 2022 PEA study. The unit rates used for the 2022 PEA estimates (labour, power, fuel and
other consumables) are based on recent price quotes in 2022 Q1/Q2 and estimates from the consultant’s databases.
The 2022 PEA operating cost estimates were produced by consulting
firms named in Table 24.16 with the area of responsibility for each firm identified.
| Table 24.16 | Operating Cost Estimate Responsibilities by Firm |
| Operating Cost Area |
Firm Responsible |
| Open Pit Mining |
MMTS |
| Underground mining |
WSP Golder |
| Processing, G&A and site services |
TT |
| Tailings disposal |
KCB |
| HDS water treatment |
Catchment area by KCB and costing by TT |
| Se Water Treatment |
Quantities by BQE Water Inc. and costing by TT |
| Energy recovery |
W. N. Brazier Assoc. |
| PST |
TT |
Basis of Estimate
Operating costs detailed in the 2022 PEA were derived from
a variety of sources including, but not limited to, benchmarking analysis and factoring costs from previous studies where possible.
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The operating cost estimate is considered to have a level
of accuracy of –25% to +35%. Overall assumptions for operating costs:
| ● | costs are presented in 2022 US dollars, unless stated otherwise. When required, certain costs in this report have been converted using
a fixed currency exchange rate of Cdn$1.00 to US$0.77 |
| ● | the costs per dry metric tonne of material milled (US$/dmt) provided in this report are the average costs over the LOM. |
The average LOM operating cost per tonne milled for the 2022
PEA is estimated at US$11.98/dmt. Details are presented in Table 24.17.
The LOM average unit operating cost is calculated by dividing
the total LOM operating costs by the LOM dmt milled. The costs exclude pre-production mining, reclamation and fund costs for servicing
long-term water treatment that are accounted for separate from operating costs. The operating cost estimates also include:
| ● | LOM annual energy recovery revenue credit of US$-0.09/dmt derived from on-site power generation from hydro energy recovery systems,
and |
| ● | life of mine average provincial sales tax (PST) which is estimated at US$ 0.05/dmt. |
Table 24.17 2022 PEA Average Operating
Costs
| Operating Costs |
Cost |
Cost |
| (US$/dmt milled) |
(LOM US$ million) |
| Mining (OP & UG) |
4.99 |
8,451 |
| Milling /Train Transport |
4.31 |
7,292 |
| Tailings |
0.15 |
249 |
| G&A |
1.39 |
2,345 |
| Site Services |
0.50 |
847 |
| Water Management |
0.68 |
1,155 |
| Annual Energy Recovery |
(0.09) |
(151) |
| PST |
0.05 |
85 |
| Operating Costs/dmt milled |
11.98 |
20,273 |
Open Pit Mine Operating Costs
Open pit operating cost were estimated using an Excel®
based cost model utilizing first principle build up for the haulage costs and benchmarking from a similar study for all other cost areas.
The most significant components of the operating costs are fuel and labour. The average LOM cost for the open pit mine is US$2.85 per
tonne mined. On a per tonne milled basis, the cost is US$7.19/dmt. (see Table 24.18). Open pit mining represents approximately 7% of the
mill feed source.
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| Table 24.18 | Open Pit Mine Operating Costs |
| Open Pit Mining Operating Costs |
Units |
Cost |
| Total Cost |
US$ million |
891 |
| Cost per ex-pit tonne mined |
US$/t |
2.85 |
| Cost per mill feed tonne milled |
US$/dmt |
7.19 |
Underground Mine Operating Costs
The major components of the underground mining cost are labour
and mobile equipment maintenance. Operating costs include the following indirect costs:
| ● | mine management, supervision, technical staff |
| ● | freight on bulk materials |
Underground mining costs were estimated for each block cave
operation using similar methodology as used for the capital cost estimate. The LOM cost per tonne mined varies between US$4.34 (Iron Cap)
and US$5.25 (Kerr). The Iron Cap mining costs are lower due to the application of battery electric loaders, electric haulage trains and
partial automation of both loaders and trains, while the Kerr mine employs a conventional diesel loader and truck haulage fleet. The cost
reductions result primarily from lower diesel fuel, and equipment maintenance and less ventilation power demand. Iron Cap also benefits
from its proximity to the MTT and lower conveying costs. The LOM underground mining cost per total dmt milled is estimated at US$4.82
(see Table 24.19). Underground mining represents 93% of the mill feed source.
| Table 24.19 | Underground Mine Operating Costs |
| Underground Mining Operating Costs |
Units |
Cost |
| Total Cost (LOM) |
US$ million |
7,559 |
| Cost per mill feed tonne milled |
US$/dmt |
4.82 |
Process Operating Costs
The most significant process costs are reagents, grinding
media, and power. Minor costs include labour, maintenance parts and assaying. The LOM average process cost, including tunnel transport
costs, is US$4.31/dmt milled. With the inclusion of tailing costs, the total cost for processing is US$4.46/dmt (Table 24.20) The costs
are based on 170,000 t/d plant throughput.
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| Table 24.20 | Process and Tailing Management Operating Costs |
| Cost Area |
Cost |
| (US$/dmt milled) |
| Processing |
4.07 |
| TMF |
0.15 |
| Tunnel/Train Transport |
0.24 |
| Total |
4.46 |
| |
|
Reagent costs were based on test work and 2022 Q1/Q2 price
quotes or in-house data. Grinding media and power costs are based on 2022 Q1/Q2 price quotes. Labour costs are based on a manpower list
to reflect the 2022 PEA plant design based on an industry-focused and location-specific labour survey conducted by Seabridge.
Process costs are also specific to each deposit’s physical
and metallurgical characteristics with each responding to differences in power and steel consumption.
Tunnel and material handling costs for the MTT train are
included in the process operating cost. They represent US$0.24/dmt milled of the process operating cost.
Tailing storage and handling costs were estimated by KCB
at US$0.15/dmt milled and excluded in the processing operating cost. They are derived from KCB’s current databases.
General and Administrative Operating Costs
G&A costs are costs that do not relate directly to mining
or processing operating costs. G&A costs include:
| ● | personnel: executive management, accounting, supply chain and logistics, human resources, external affairs functions, and other G&A
departments |
| ● | expenses: including insurance, off site offices, administrative supplies, medical services, legal services, human resources related
expenses, community and environmental programs, accommodation/camp costs, air/bus crew transportation, regional and property taxes, and
external assay/testing. |
The G&A costs were estimated based on the 2022 PEA head
count and factored costs from previous studies. G&A costs average US$1.39/dmt milled over the LOM.
Site Services Operating Costs
Site services operating cost are estimated at US$0.50/dmt
milled including the following elements:
| ● | personnel – general site services human power |
| ● | site mobile equipment and light vehicle operations |
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| ● | portable water and waste management |
| ● | general maintenance including yards, roads, fences, and building maintenance |
| ● | off-site operation expense |
| ● | power supply to surface facilities |
Water Management
Operating Costs
Water management costs are estimated at US$0.68/dmt milled
and were derived from databases and current studies and adjusted to reflect the 2022 PEA requirements and to reflect current commodity
pricing. Table 24.21 shows the average LOM operating costs for the HDS treatment plant, the selenium water treatment plant, and the water
pumping system.
| Table 24.21 | Water Management Costs |
| Description |
US$/t |
| HDS Water Treatment |
0.37 |
| Se Water Treatment |
0.26 |
| Water Pumping |
0.05 |
| Total |
0.68 |
The results of the economic analysis in the 2022 PEA represents
forward-looking information that is subject to a number of known and unknown risks, uncertainties and other factors that may cause actual
results to differ materially from those presented here. Forward-looking statements in the 2022 PEA section of this report include, but
are not limited to, timing and amount of future cash flows from mining operations, forecast production rates and amounts of copper, gold,
silver, and molybdenum produced from the KSM mining operation, estimation of the Mineral Resources and the realization of the Mineral
Resource estimates within the 2022 PEA mine plans, the time required to develop the mine based on the 2022 PEA mine design, statements
with respect to future price of copper, gold, silver, and molybdenum, currency exchange rate between the US dollars and Canadian dollars,
assumptions regarding mine dilution and losses, the expected grade of the material delivered to the mill, metallurgical recovery rates,
initial capital and sustaining capital costs, as well as mine closure costs and reclamation, timing and conditions of permits required
to initiate mine construction, maintain mining activities, and mine closure, and assumptions regarding geotechnical and hydrogeological
factors.
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The reader is cautioned that the actual results of mining
operations may vary from what is forecast. Risks to forward-looking information include, but are not limited to, unexpected variations
in grade or geological continuity, as well as geotechnical and hydrogeological assumptions that are used in the mine designs. There could
be seismic or water management events during the construction, operations, closure, and post-closure periods, that could affect predicted
mine production, timing of the production, costs of future production, capital expenditures, future operating costs, permitting timelines,
potential delays in the issuance of permits, or changes to existing permits, as well as requirements for additional capital. The plant,
equipment or metallurgical or mining processes may fail to operate as anticipated. There may be changes to government regulation of mining
operations, environmental issues, permitting requirements, and social risks, or unrecognized environmental, permitting and social risks,
closure costs and closure requirements, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage.
A portion of the Mineral Resources in the mine plans, production
schedules, and cash flows include Inferred Mineral Resources, that are considered too speculative geologically to have the economic considerations
applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the 2022 PEA will be realized.
Due to the conceptual nature of the 2022 PEA, none of the Mineral Resources in the 2022 PEA have been converted to Mineral Reserves and
therefore do not have demonstrated economic viability.
The 2022 PEA has been evaluated using a discounted cash flow
(DCF) analysis. Cash inflows consist of annual revenue projections for the mine. Cash outflows such as capital, including the four years
of pre-production costs, operating costs, taxes, and royalties are subtracted from the inflows to arrive at the annual cash flow projections.
Cash flows are taken to occur at the end of each period.
To reflect the time value of money, annual net cash flow
(NCF) projections are discounted back to the valuation date using several discount rates. The discount rate appropriate to a specific
project depends on many factors, including the type of commodity; and the level of project risks related to mine construction and operation,
such as market risk, technical risk and political risk. The discounted, present values of the cash flows are summed to arrive at the NPV.
Preproduction development period for the PEA was assumed to be 4 years, economic results were reported at the start of that 4 years period.
In addition to NPV, IRR and payback period are also calculated.
The IRR is defined as the discount rate that results in an NPV equal to zero. Payback is calculated as the time require to achieve positive
cumulative cash flow following first metal production.
Industry common practice where mineralization extends at
depth beyond open pit mining is to transition the mining method from open pit to underground without pausing the mining activity to accommodate
the transition. The 2022 PEA assumes the pre-development period and associated costs are exclusive from the 2022 PFS; however, an opportunity
exists to improve the 2022 PEA’s business case by investing free cash flow from the tail end of the operations described in the
2022 PFS as the initial capital for the 2022 PEA.
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| 24.22.2 | Financial Model Parameters |
Basis of Analysis
The financial analysis was based on the Mineral Resources
presented in Section 14, the mine and process plan and assumptions detailed in Sections 24.16 and 24.17, respectively, the projected infrastructure
requirements outlined in Section 24.18, the concentrate marketing assumptions in Section 24.19, the permitting, social and environmental
regime discussions in Section 24.20, and the capital and operating cost estimates detailed in Section 24.21.
Metal Pricing
A Base Case economic evaluation was undertaken incorporating
historical three-year trailing averages for metal prices as of June 20, 2022. Two alternate cases are also presented: (i) an Alternate
Case that incorporates lower metal prices than used in the Base Case to demonstrate the 2022 PEA sensitivity to lower prices; and, (ii)
a Recent Spot Case incorporating recent spot prices for gold, copper, silver and the US$/Cdn$ exchange rate. Metal prices for each scenario
are presented in Table 24.22.
Royalties
Under the Benefits Agreement with the Nisga’a
Nation and the Co-operation and Benefits Agreement with the Tahltan Nation, the project owners make an annual financial payment to each
Nation once operations have commenced. The combined annual payments to these Nations are payable in two forms; payments that are a percentage
of the tax payable (the “Mineral Tax”) under the Mineral Tax Act (British Columbia) (the “Mineral Tax Act”), which
is a tax on net operating profit, and payments that are based on net smelter returns. Royalty payments include 60% of the gross silver
royalty payable to Sprott.
Working Capital
Working capital cash outflow and inflows are included in
the financial model. The calculations are based on the assumptions that accounts payable will be paid within 90 days and accounts receivable
within 30 days.
Closure and reclamation
Closure costs are estimated at US$588 million.
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Taxes
The post-tax financial estimates consider all applicable
Canadian Federal and BC Provincial taxes including:
| ● | Canadian Federal Income Tax |
Canadian Federal and BC Provincial Income Tax Regime
The federal and BC provincial corporate income taxes are
calculated using the currently enacted rates of 15% for federal and 12% for BC. Over the LOM, approximately US$3,969 million in federal
and US$3,175 in provincial corporate income taxes are paid. For both federal and provincial income tax purposes, capital expenditures
are accumulated in tax pools that can be deducted against mine income at different prescribed rates, depending on the type of capital
expenditures.
BC Mineral Tax Regime
The BC Mineral Tax regime is a two-tier tax regime, with
a 2% tax and a 13% tax. Over the LOM, approximately US$4,159 in BC Mineral Tax is paid.
The 2% tax is assessed on “net current proceeds”,
which is defined as gross revenue from the mine less mine operating expenditures. The 13% tax is assessed on “net revenue”,
which is defined as gross revenue from the mine less any accumulated expenditures.
BC Mineral Tax is deductible for federal and provincial income
tax purposes.
Provincial Sales Tax
Provincial sales tax (PST) is a retail sales tax that applies
when a taxable good or service is purchased, acquired or brought into B.C., unless a specific exemption applies. The proportion of goods
and services within the capital costs that are non-exempt from PST was determined to be 18% in previous studies. The PST retail sales
tax is 7%. For estimating PST that applies to capital, the 7% tax was applied to 18.5% of the annual capital and sustaining capital estimates
within the financial model. The LOM PST for capital and sustaining capital costs was US$19 million and US$165 million, respectively.
Financing
The model does not include any costs associated with financing.
Inflation
There is no adjustment for forward inflation in the financial
model; all cash flows are based on 2022 dollars.
Financial Results
Table 24.22 summarizes the financial results. The post-tax
NPV at a 5% discount rate over the estimated mine life is US$5.8 billion. The post-tax IRR is 18.9%. The post-tax payback of the initial
capital investment is estimated to occur in 6.2 years after the start of production.
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The average life of mine operating cost per ounce of
gold recovered is a negative US$-343 and US$460 on a byproduct and a coproduct basis, respectively; and the average life of mine
operating cost per pound of copper recovered is US$0.38 and US$0.93 on a byproduct and a coproduct basis, respectively. The total
cost in Table 24.22 is calculated similar to the operating cost but includes US$14.8 billion in capital and closure costs.
Caution Statement
The PEA is preliminary in nature and includes Inferred Mineral
Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them
to be categorized as Mineral Reserves, and there is no certainty that the PEA will be realized. Mineral Resources in the PEA mine plan
are not Mineral Reserves and do not have demonstrated economic viability.
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| Table 24.22 | 2022 PEA Financial Analysis Summary |
| Financial Results |
2022 PEA Base Case
3yr Avg. |
2022 PEA Alternative
Case |
2022 PEA
Recent Spot
Upside Case |
| Metal Prices: |
|
|
|
| Gold (US$/ounce) |
1,742.00 |
1,500.00 |
1,850.00 |
| Copper (US$/pound) |
3.53 |
3.00 |
4.25 |
| Silver (US$/ounce) |
21.90 |
20.00 |
22.00 |
| Molybdenum (US$/pound) |
18.00 |
18.00 |
18.00 |
| Exchange Rate: (US$/Cdn$) |
0.77 |
0.77 |
0.77 |
| Cost Summary: |
|
|
|
| Op cost (US$)/ Au oz recovered byproduct |
-1,392 |
-905 |
-2,060 |
| Total cost (US$)/ Au oz recovered byproduct |
-343 |
144 |
-1,011 |
| Op cost (US$)/ Au oz recovered coproduct |
460 |
463 |
423 |
| Total cost (US$)/ Au oz recovered coproduct |
1,053 |
1,044 |
984 |
| Op cost (US$)/ lb Cu recovered net of byproduct |
0.38 |
0.59 |
0.32 |
| Total cost (US$)/ lb Cu recovered net of byproduct |
1.44 |
1.64 |
1.38 |
| Op cost (US$)/ lb Cu recovered coproduct |
0.93 |
0.93 |
0.97 |
| Total cost (US$)/ lb Cu recovered coproduct |
2.13 |
2.09 |
2.26 |
| Initial Capital (US$ Billion) |
1.5 |
1.5 |
1.5 |
| Sustaining Capital (US$ Billion) |
12.75 |
12.75 |
12.75 |
| Unit Operating Cost On-site (US$/t milled) |
11.98 |
11.98 |
11.98 |
| Pre-Tax Results: |
|
|
|
| Net Cash Flow (US$ Billion) |
29.8 |
19.4 |
40.9 |
| NPV @ 5% Discount Rate (US$ Billion) |
9.7 |
5.8 |
13.9 |
| Internal Rate of Return (%) |
24.0 |
17.4 |
30.4 |
| Payback Period (Years) |
4.7 |
7.5 |
3.9 |
| Post-Tax Results: |
|
|
|
| Net Cash Flow (US$ Billion) |
18.5 |
11.9 |
25.6 |
| NPV @ 5% Discount Rate (US$ Billion) |
5.8 |
3.3 |
8.4 |
| Internal Rate of Return (%) |
18.9 |
13.5 |
24.0 |
| Payback Period (Years) |
6.2 |
8.7 |
4.4 |
Note: *June 20, 2022 3-year trailing average.
Sensitivity to metal prices, operating costs, capital costs,
and exchange rate were analyzed for the 2022 PEA Base Case post-tax NPV 5% and IRR. The sensitivities are shown graphically in Figure
24.22 and Figure 24.23.
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| Figure 24.22 | Post-Tax NPV 5% Sensitivity Analysis |
Source:
Tetra Tech (2022)
| Figure 24.23 | Post-Tax IRR Sensitivity Analysis |
Source:
Tetra Tech (2022)
The 2022
PEA financials are more sensitive to changes in copper price and exchange rate than changes in capital costs and operating costs.
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| 25.0 | Interpretations and Conclusions |
The KSM Property involves the development of major gold-copper-silver-molybdenum
deposits located in northwest BC. KSM includes five major mineralized zones, identified as the Mitchell, East Mitchell, Kerr, Sulphurets,
and Iron Cap deposits.
KSM has received environmental assessment approvals and early-stage
construction permits. Early construction works currently underway include the establishment of access roads, construction camps, and power
infrastructure.
In this report, this “KSM Prefeasibility Study and
Preliminary Economic Assessment, NI 43-101 Technical Report” (the Report), the KSM mine development has been evaluated as a PFS
(2022 PFS) using open pit mining of the Mitchell, East Mitchell, and Sulphurets deposits. A PEA (2022 PEA) is a standalone mine plan that
has been undertaken to evaluate a potential future expansion of the KSM mine to the Iron Cap and Kerr deposits after the 2022 PFS mine
plan has been completed. The Mineral Resources included in the PEA mine plan are only those Mineral Resources that were not included in
the PFS mine plan.
The results of the 2022 PFS represent a viable option for
developing the Property, with the PEA assessing a post-PFS mine life extension option at a conceptual level.
The 2022 PFS maintains the mine development scope as a large-tonnage
open pit operation, with the annual average maximum nominal mill throughput increasing from initial 130,000 t/d to 195,000 t/d by Year
3.
The flotation and leaching plants will be capable of producing
a copper/gold/silver concentrate for transport by truck to the nearby deep-water seaport at Stewart, BC. A gold-silver doré, and
a separate molybdenum concentrate, will also be produced at the processing facility.
| 25.2 | 2022 Prefeasibility Study Conclusions |
| 25.2.1 | Exploration
and Mineral Resources |
Significant drilling and other exploration activities have
been conducted in the KSM district since the 1960s. A number of major mining companies completed various exploration programs prior to
Seabridge’s entry into the district in 2000. Since then, Seabridge has drilled the Kerr, Sulphurets, Mitchell, East Mitchell, and
Iron Cap deposits, testing both the limits and geometry of the extensively altered and mineralized systems that appear to be centered
on hypabyssal, early-Jurassic intrusions that are located adjacent to regional thrust faults. The East Mitchell (formerly named Snowfield)
deposit, acquired by Seabridge in 2021, is also included in the 2022 Mineral Resources. Seabridge’s geological staff developed geological
models for each of the mineralized systems. Those geological models were used to create grade models that were used to tabulate Mineral
Resources for the KSM Property. The KSM Mineral Resources are constrained by conceptual mining shapes based on their assumed mining methods.
The KSM Mineral Resources were prepared in accordance with CIM Definition Standards (2014) and CIM Estimation of Mineral Resource and
Mineral Reserves Best Practice Guidelines (2019).
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| 25.2.2 | 2022 PFS Mineral Reserves |
All of the KSM Mineral Reserves were converted from Measured
and Indicated Mineral Resources described in Section 14.0 by applying modifying factors within the 2022 PFS. Mineral Reserves are based
on NSR values that were calculated in the block model using US$1,300.00/oz of gold, US$3.00/lb of copper, US$20.00/oz of silver, US$9.70/lb
of molybdenum, and a foreign exchange rate of US$0.79 per Cdn$1.00, with varying process recoveries for the different mining areas, and
applicable off-site charges. The NSR values have been used as a dynamic cut-off for defining ore and waste in the open pit, with a minimum
NSR of Cdn$11.00/t. Mining loss and dilution parameters for the open pits mine plan are applied as described in Section 15.0. The estimated
Proven and Probable Mineral Reserves as of May 26, 2022, are 47.3 Moz of gold and 7.32 Blb of copper (2.29 Bt at an average
grade of 0.64 g/t gold, 0.14% copper, 2.2 g/t silver and 76 ppm molybdenum per t).
The relevant geotechnical, hydrology, and hydro-geology components
of the mine design have been provided by competent professional consulting firms with a long history on the KSM property. These supporting
studies have been used in establishing the mine design parameters and supporting facilities designs for the 2022 PFS mine plan.
The methods used in this estimate are in accordance with
CIM Definition Standards, with reasonable engineering practices for a PFS-level study, and economic estimates based on the technical and
economic parameters stated in this Report.
The open pit mine plan in the 2022 PFS establishes the economic
mining limits of the Mitchell, East Mitchell, and Sulphurets Mineral Resource areas using large-tonnage mining methods capable of providing
mill feed at a nominal rate of 195,000 t/d after early production years ramp up. The LOM plan accommodates the local adverse conditions
comprising snow, cold, remoteness, and steep terrain. Waste and water management designs are incorporated into the mine plan, as specified
in the current site plans and as reviewed and approved in the Application/EIS (Rescan 2013) review process completed in 2014.
The chosen mine equipment is well known and suitable for
the expected operating conditions, and the productivity assumptions are reasonable and achievable. The resultant unit mining costs are
comparable when benchmarked against other similar operating mines when considering the site operating conditions. Given the stated design
parameters and assumptions, the open pit mine plan will achieve the forecast production schedule and the annual levels and costs within
the expected range of accuracy of the 2022 PFS estimate.
| Seabridge Gold Inc. | 25-2 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
Several wide-ranging and extensive metallurgical test programs
have been conducted since 2007 to assess the metallurgical responses of the mineral samples from the KSM deposits, especially the samples
from the Mitchell deposit. The test results indicate that the mineral samples from the Mitchell, East Mitchell, and Sulphurets mineralized
deposits proposed for the mine production plan are amenable to the flotation-cyanidation combined process.
The 2022 PFS processing plant is designed based on the flowsheet
developed from the testwork results. The proposed flotation process is projected to produce an average copper-gold concentrate containing
approximately 24% copper with approximately 25% or higher concentrate grades in the initial years. Copper and gold flotation recoveries
will vary with changes in head grade and mineralogy. The LOM average copper and gold recoveries to the concentrate and doré are
projected to be 80.2% and 71.7%, respectively, for the LOM mill feed containing 0.64 g/t gold and 0.14% copper. As projected from
the testwork, the cyanidation circuit will increase the overall gold recovery to a range of 60% to 79%, depending on gold and copper head
grades. Silver recovery from the flotation and leaching circuits is expected to be 61.1% on average. A separation flotation circuit will
recover molybdenite from the copper-gold-molybdenum bulk concentrate when higher-grade molybdenite mineralization is processed.
The process flowsheet proposed for KSM is conventional and
has been widely used in processing porphyry copper-gold ores. The equipment type and sizing selected for KSM are modern and large equipment
used in other mining operations or projects.
In general, the copper and molybdenum concentrates produced
are anticipated to be acceptable by most of the copper and molybdenum smelters. On average, the impurity contents in the copper and molybdenum
concentrates should be lower than the penalty thresholds set by most of the smelters, although it is anticipated that the arsenic and
antimony may exceed the penalty thresholds set up by some of smelters in some short periods.
| 25.2.5 | 2022 PFS Project Infrastructure |
MTT Transportation System
In the 2022 PFS, transportation of ore, freight, and personnel
through the MTT will be achievable with a twin tunnel automated train transport system, at an average rate of 195,000 t/d and a peak
capacity of 12,000 t/h after an initial three-year ramp up. The required deliveries of freight, including bulk transport of fuel
and lime, mine site consumables, and personnel movement for periodic crew changes and daily requirements between the Mitchell OPC and
Treaty OPC are also achievable using the tunnel and rail infrastructure with appropriate traffic control management systems.
| Seabridge Gold Inc. | 25-3 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
The system is scalable and flexible, as it has the ability
to add or remove train sets to meet higher or lower throughput requirements and components can be taken out of operation for maintenance
without compromising total system operation. The twin tunnel also allows segments to be isolated for maintenance while still meeting ongoing
production requirements.
This scale of underground tunnel transport via trains has
proven effective in other mines globally, utilizing equipment and infrastructure specified within the 2022 PFS. The planned train system
operations can be reasonably accomplished at the 2022 PFS’s estimated productivities and costs.
Tunnelling
For the 2022 PFS, the conventional drill and blast methodology
for excavating infrastructure and water tunnels is a valid basis for the scheduling and costing of the long tunnels required in this PFS.
Using a twinned tunnel for the MTT provides advantages in construction with three sets of advancing twin headings, enabling the use of
one tunnel at each heading as a fresh airway, and the other tunnel as a return airway, which has a significant impact on ventilation and
advance rates for long tunnels. Other infrastructure and water tunnels, which are shorter, will be excavated with a single advancing heading
from each portal, a well-proven method in the mining industry.
Advance rates and excavation costs for the MTT have been
determined from contractor estimates and engineering simulation accounting for cycle times varying ground conditions. The contractor-developed
advance rates and costs have been adapted for the other tunnel excavations. The contractor’s estimates have also been benchmarked,
indicating the estimates are within the accuracy of the 2022 PFS.
Infrastructure Dams
Tailings Management Facility
In 2022 PFS, the TMF will be a conventional tailings storage
facility with three main cells, using initial starter dams with ongoing centreline dam raises using cycloned sand. The TMF layout and
sequencing allows for staged construction of the facility, which reduces both start-up and operating costs, while managing geotechnical
and environmental risks. Using a three-cell system provides advantages for storage of CIL tailings, and allows progressive, staged development
followed by closure of the facility to reduce environmental and closure risks. The cell system reduces TMF discharge of excess water and
also allows for progressive development of water management facilities.
A Best Available Tailings Technology (BATT) assessment (KCB,
2016a), shows that the current TMF design is appropriate to meet environmental, operability, and geotechnical criteria. Filtered tailings
(Dry stack) options were either not the most appropriate or did not meet these criteria.
| Seabridge Gold Inc. | 25-4 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
Key conclusions include:
| ● | TMF starter dams safely store 18 to 24 months of tailings under the range of start-up assumptions assessed as established by the TMF
design criteria. The storage plan allows for operational flexibility during start up, with a minimum of one winter season and potentially
two winter seasons accommodated |
| ● | TMF dam designs (from starter dams through closure) are stable under static and seismic loading, as designed, and these designs meet
all applicable regulatory criteria. |
Water Storage Facility
The WSF provides environmental containment of runoff water
for the mine site. The facility includes a rock fill-asphalt core WSD to retain contact water collected from the mine site for treatment
at the HDS WTP. The facility is capable of storing inflows from extreme events and is designed to minimize seepage. The WSD will be built
to full height before start-up to provide approximately 50 Mm3 of storage including flood storage from a 200-year wet year.
Key conclusions include:
| ● | The rock fill-asphalt core WSD design is confirmed to be the preferred structure type to meet the KSM environmental, durability, and
geotechnical design criteria. |
| ● | A value engineering study (KCB, 2012e) showed that this design has both low-seepage rates, as well as constructability and cost advantages
over other types of dam structures analyzed for this location and purpose |
| 25.2.6 | 2022 PFS Economic Analysis |
Tetra Tech prepared an economic evaluation for the 2022 PFS
based on a pre-tax financial model. The tax component of the model was prepared and reviewed by the tax consultant (please see Section
22.0 for further details). Based on this tax analysis, Tetra Tech prepared the post-tax economic evaluation of the 2022 PFS.
For the 33-year LOM and 2.29 Bt Mineral Reserve, Table
25.1 summarizes the 2022 PFS economic analysis results.
| Seabridge Gold Inc. | 25-5 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| Table 25.1 | Summary of Major 2022 PFS Pre- and Post-Tax Results by Metal
Price Scenario |
| |
Unit |
2022 PFS
Base
Case |
2022 PFS
Spot
Case |
2022 PFS
Alternate
Case |
| Gold |
US$/oz |
1,742.00 |
1,850.00 |
1,500.00 |
| Copper |
US$/lb |
3.53 |
4.25 |
3.00 |
| Silver |
US$/oz |
21.90 |
22.00 |
20.00 |
| Molybdenum |
US$/lb |
18.00 |
18.00 |
18.00 |
| Exchange Rate |
US$:Cdn$ |
0.77 |
0.77 |
0.77 |
| Pre-Tax Results |
| Undiscounted NCF |
US$ million |
38,636 |
46,070 |
27,854 |
| NPV (at 3%) |
US$ million |
20,210 |
24,357 |
14,210 |
| NPV (at 5%) |
US$ million |
13,454 |
16,403 |
9,194 |
| NPV (at 8%) |
US$ million |
7,420 |
9,294 |
4,717 |
| IRR |
% |
20.1 |
22.4 |
16.5 |
| Payback |
years |
3.4 |
3.1 |
4.1 |
| Cash Cost/oz Au |
US$/oz |
275 |
164 |
351 |
| Total Cost/oz Au |
US$/oz |
601 |
490 |
677 |
| Post-tax Results |
| Corporate Tax (Federal) |
US$ million |
5,152 |
6,118 |
3,754 |
| Corporate Tax (Provincial) |
US$ million |
4,122 |
4,894 |
3,003 |
| BC Mineral Tax |
US$ million |
5,429 |
6,427 |
3,963 |
| Total Taxes |
US$ million |
14,703 |
17,440 |
10,721 |
| Undiscounted NCF |
US$ million |
23,933 |
28,630 |
17,133 |
| NPV (at 3%) |
US$ million |
12,264 |
14,889 |
8,467 |
| NPV (at 5%) |
US$ million |
7,944 |
9,814 |
5,238 |
| NPV (at 8%) |
US$ million |
4,061 |
5,254 |
2,332 |
| IRR |
% |
16.1 |
18.0 |
13.1 |
| Payback |
years |
3.7 |
3.4 |
4.3 |
| Notes: | 1) |
Operating and total cost per ounce of gold are after copper, silver, and molybdenum
credits. |
| 2) | Total cost per ounce includes all start-up capital, sustaining
capital, and reclamation/closure costs. |
| 3) | Results include consideration of Royalties and Impact Benefit
Agreements. |
| 4) | The post-tax results include the BC Mineral Tax and provincial
and federal corporate taxes. |
| 5) | Sums may not add due to rounding. |
| Seabridge Gold Inc. | 25-6 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| 25.3 | 2022 Preliminary Economic Assessment
Conclusions |
The 2022 PEA has been undertaken to evaluate a potential
future expansion of the KSM mine to the Iron Cap and Kerr deposits after the completion of the PFS plan. None of the Mineral Resources
incorporated into the 2022 PEA evaluation have been used in the 2022 PFS.
The 2022 PEA is primarily an underground block cave mining
operation supplemented with a small open pit and is planned to operate for 39 years with a peak mill feed production of 170,000 t/d.
The 2022 PEA mine design is a combined open pit/underground
block cave mining operation. The mine production plan starts as lower-cost open pit mining at Upper Kerr, using conventional large-scale
equipment while developing the Iron Cap block cave mine. After the Iron Cap mine has been developed to begin feeding ore to the mill,
development of the first lift of the Lower Kerr block cave will commence.
The Iron Cap and Kerr underground mines will be the main
source of mill feed, contributing approximately 93% of the total plant feed over the LOM, supplemented by the Kerr open pit in the mine
production plan.
Open Pit Mining
The 2022 PEA open pit mining is designed as a conventional
truck-shovel operation. Kerr open pit has been designed to supplement block cave mill feed during the ramp up of the block cave production.
There is one year of pre-stripping before production commences.
Open pit production will occur from PEA Years 1 to 5 of the PEA mine plan using an already established KSM open pit mining fleet to supplement
Iron Cap mill feed ramp up. Open pit production is completed before Kerr underground production begins.
Underground Mining
The 2022 PEA underground block caving mine designs for Iron
Cap and Kerr are based on modeling using GEOVIA’s Footprint Finder software. Iron Cap has been designed for using battery-electric
loaders and electric trains for material handling, and employs both tele-operation and automation for these units. This enables a reduction
to the number of primary ventilation intake and exhaust drifts due to less ventilation demand and operating cost savings from lower diesel
fuel consumption, labour, and equipment maintenance costs. The Kerr block cave mine is designed as a conventional diesel equipment mine,
presenting a future opportunity to electrify.
The first underground mill feed production from Iron Cap
and Kerr comes in PEA Years 1 and 7 of the PEA mine plan, respectively. Iron Cap is estimated to have a production ramp-up period of 6 years,
steady state production at 32.9 Mt/a for 17 years, and then ramp-down production for another 6 years. Kerr is estimated to have a
production ramp-up period of 5 years and steady state production at 29.2 Mt/a for 20 total years, with a 7-year production dip during
years where the operation transitions from the first to second lift. Underground production ends first at Iron Cap in PEA Year 29 and
finally at Kerr in PEA Year 39.
| Seabridge Gold Inc. | 25-7 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
Based on the available information, including preliminary
mine plan and results of the metallurgical test work performed on various samples providing a reasonable indication of the mineralogical
characteristics of the materials, the process flowsheet developed for the KSM mineralization is considered appropriate for the 2022 PEA.
Extensive metallurgical test programs have been carried out
to assess the recoverability of copper, gold, silver, and molybdenum values using the flowsheet developed for the KSM mineralized material.
The results of the test programs indicate that the mineral samples from the Iron Cap and Kerr deposits are amenable to the flotation process
method developed for the KSM mineralization.
The copper-gold concentrates from the mineralization are
expected to be saleable with no significant penalty elements. Cyanidation tests showed that the bulk cleaner flotation tailings and pyrite
concentrate were possible to recover gold and silver by cyanide leaching, however, preliminary trade-off studies indicate that cyanidation
of the Iron Cap and Kerr gold-bearing sulphide materials may not be economic due to ineffective gold and silver absorption onto activated
carbon grains caused by elevated copper/gold ratios. Additional test work and economic assessments are required to validate this observation.
The metallurgical test work also determined the consumption of reagents and grindability which have been incorporated into the operating
cost estimates.
The metallurgical performance parameters for copper, gold,
silver, and molybdenum minerals are projected based on the metallurgical test results obtained from various test programs that are summarized
in the metallurgical test work review section.
Detailed characterization and metallurgical test work on
Iron Cap and Kerr samples are presented in the pertinent test work reports listed in Section 27.0.
| 25.3.3 | 2022 PEA Project Infrastructure |
MTT Transport System
Mill feed for the PEA will be delivered from the mining operations
to the Mitchell OPC then will be transported to the Treaty OPC via the twin tunnels and automated train system. This facility will also
provide access for personnel transport, fuel, supplies, and the power supply to the Mitchell area.
Tailings and Water Management
TMF management philosophy and criteria for the 2022 PEA are
generally consistent with the TMF designs presented in the approved EA. The 2022 PEA has a lower peak throughput, 170,000 t/d, which is
less than the process plant capacity, so tailings storage would account for this modified placement rate and maintain requisite supernatant
pond operational volume and freeboard. A high-level allowance for expanded total tailings production is included in the costing.
| Seabridge Gold Inc. | 25-8 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
The water and waste management structure designs in the 2022
PEA are based on those described in the approved EA. The approximate length of existing single axis water diversion tunnels in Mitchell
Valley at PEA Year 1 is approximately 18 km and includes the MDT, MTDT, NPWDA and MVDT.
The 2022 PEA rock storage requirements are significantly
less than in the PFS as there is only one deposit mined by open pit methods producing mine waste (i.e., Kerr). The 2022 PEA waste management
plan is compatible with the approved EA by consolidating waste rock into a single facility, including minor waste rock from initial underground
development, into Mitchell Valley as pit backfill which is contiguous with the Mitchell RSF.
The overall 2022 PEA operational water management and water
treatment designs are similar to those described in the approved EA, and no adjustments were required since the three areas to be mined
in the 2022 PEA are inside disturbance areas addressed in the approved EA.
The WSD crest elevation is kept at the same elevation for
the 2022 PEA and WSD operations would be consistent with those describe for the approved EA.
| 25.3.4 | 2022 PEA Economic Analysis |
A Base Case economic evaluation was undertaken incorporating
historical three-year trailing averages for metal prices as of June 20, 2022. This approach is used because it is consistent with the
2022 PFS Base Case. Two alternate cases are also presented:
| ● | An Alternate Case that incorporates lower metal prices than used in the Base Case to demonstrate 2022 PEA’s sensitivity to lower
prices; and, |
| ● | A Recent Spot Case incorporating recent spot prices for gold, copper, silver, and the US$/Cdn$ exchange rate. |
In the 2022 PEA, it is assumed that the pre-production development
period will be four years long. The base date of the economic results presented as follows is at the beginning of this period. The estimated
2022 PEA pre-tax and post-tax economic results are presented in Table 25.2.
| Seabridge Gold Inc. | 25-9 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| Table 25.2 | 2022 PEA Financial Analysis Summary |
| Financial Results |
2022 PEA
Base Case
3-yr Avg. |
2022 PEA
Alternative
Case |
2022 PEA
Recent Spot
Upside Case |
| Metal Prices: |
|
|
|
| Gold (US$/oz) |
1,742.00 |
1,500.00 |
1,850.00 |
| Copper (US$/lb) |
3.53 |
3.00 |
4.25 |
| Silver (US$/oz) |
21.90 |
20.00 |
22.00 |
| Molybdenum (US$/lb) |
18.00 |
18.00 |
18.00 |
| Exchange Rate: (US$/Cdn$) |
0.77 |
0.77 |
0.77 |
| Pre-Tax Results: |
| Net Cash Flow (US$ Billion) |
29.8 |
19.4 |
40.9 |
| NPV @ 5% Discount Rate (US$ Billion) |
9.7 |
5.8 |
13.9 |
| Internal Rate of Return (%) |
24.0 |
17.4 |
30.4 |
| Payback Period (Years) |
4.7 |
7.5 |
3.9 |
| Post-Tax Results: |
| Net Cash Flow (US$ Billion) |
18.5 |
11.9 |
25.6 |
| NPV @ 5% Discount Rate (US$ Billion) |
5.8 |
3.3 |
8.4 |
| Internal Rate of Return (%) |
18.9 |
13.5 |
24.0 |
| Payback Period (Years) |
6.2 |
8.7 |
4.4 |
The 2022 PEA offers a viable option for extended development
of the very large underground Mineral Resources at KSM after the 2022 PFS Mineral Reserves are depleted.
| 25.4 | 2022 Prefeasibility Study Risks |
There are risks that could affect the economic viability
of the KSM mine development. Many of these risks are based on the current extent of sufficiently detailed information and engineering
in specific areas. These risks can be further managed as more drilling, sampling, testing, design, and engineering are completed in the
next study stage.
However, several risks have been reduced through activities
completed by Seabridge and its team since 2012. Specifically, the permitting risk has been addressed substantially with the receipt of
environmental approvals granted by both the federal and provincial governments in 2014 and associated approved extensions, and the granting
of the early-stage construction permits for KSM including the MTT License of Occupation. It can be effectively stated that Seabridge earned
“the social license” for KSM through the successful completion of the environmental review process with the support of nearby
communities (by submission of letters of support) and Indigenous groups. On June 16, 2014, Seabridge Gold entered into a comprehensive
Benefits Agreement with the Nisga’a Nation in respect of the KSM Property. On July 8, 2019, the Tahltan Nation and Seabridge
Gold Inc. announced that the parties reached agreement on the terms of a Co-operation and Benefits Agreement in connection with KSM.
| Seabridge Gold Inc. | 25-10 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
One of the significant unknowns associated with KSM is related
to the extent of available geotechnical data for the water diversion tunnels. Since several tunnels are key for the development of the
Mine Site, potential delays in construction could occur if unforeseen rock mass conditions or groundwater inflows are encountered that
cause durations longer than those anticipated in the preliminary construction schedule. The MTT tunnel geotechnical drilling and geotechnical
characterization have been completed. Geotechnical drilling along the mine water tunnel routes is currently underway, and it is anticipated
that this mine water tunnel geotechnical data gap will be reduced at the completion of the ongoing 2022 site investigation program.
A significant risk common to all aspects
of the KSM mine development is the availability of labour and experienced management and supervision. There are currently open pit and
underground mines operating in the area surrounding KSM, thus generating a locally experienced labour pool; however, the shortage of experienced
labour is currently a global mining industry problem. This risk will need to be addressed by KSM with a robust recruitment and training
program.
These risks are common to most mining projects, many of which
can be mitigated with adequate engineering, planning, and proactive management. Some external risks, such as metal prices, exchange rates,
inflation, and government legislation, are beyond the control of the developer and operator and are difficult to anticipate and mitigate,
although in some instances measures for risk reduction have already been included in conservative design such as in selection of economic
mining limits. Risk reduction measures are also included in tunnel and access road design, TMF design, and through the inclusion of early
scheduling for items potentially subject to risk of delay. The means to address risk for a project the size of KSM moving forward is to
establish a formal risk management program during advanced study phases that continues through development and into mine operation. The
KSM project team will systematically review risks and opportunities during project development and construction, and take appropriate
action to minimize the impact on overall costs and scheduling.
| Table 25.3 | PFS Risks and Mitigation Measures |
| Risks |
Mitigation Measures |
| Open Pit Mining |
| Slope stability, safety, and production delays. |
● |
Throughout the planning, design, and engineering of the open pits, the KSM project team has identified hazards and developed mitigation
plans to reduce and manage risks related to the open pit slopes. |
| Slope deformation or rock falls from unstable slopes requiring restricted access to the pit, slope rehabilitation, and lost or reduced mine production. |
● |
Appropriate geotechnical design and assessment prior to mining, a comprehensive slope monitoring and management plan during mining, the
addition of extra-wide benches at regular 150 m intervals in the pit slope configurations, and standard operating procedures that include
good wall control practices and mine operations planning. |
| |
table continues… |
| Seabridge Gold Inc. | 25-11 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| Risks |
Mitigation Measures |
| Snow avalanches at the pit crests resulting in restricted access to the pit. |
● |
An avalanche management plan coordinated with mine operations. |
| Visibility or weather shutdowns resulting in reduced productivity in the open pits. |
● |
Snow handling crews and equipment, planned lost days, and the use of ore stockpiles. |
| Slope depressurization to reduce high pore water pressures in the pit slopes that might result in pit slope instability. |
● |
An extensive slope depressurization plan that includes vertical wells, horizontal drains, and dewatering adits as a multi-layer system
to achieve the design depressurization targets. |
| Surface water reporting to the pits due to failure or inundation of water management structures. Excessive surface water into the pits may result in localized slope failures, reduced mine productivity, or increased pumping costs. |
● |
Adjusting the mine plan to limit the exposure of haul ramps to potential erosion from surface water sources and adequate geotechnical
design of the water management infrastructures. |
| Large open pits mined in areas of mountainous terrain with high precipitation. The height of the highwalls also needs consideration. |
● |
The mining and geotechnical teams have drawn on experience from design work in similar terrain and operations in these conditions and
applied it to the designs in this study to reduce the risk through design and operating practices and procedures integrated into the
plan. |
| Tunnels |
| Surface routes for ore transport and surface water diversion are more susceptible to conflicts with other surface infrastructure and ongoing mine operations, and also present risks from climate and geohazards. |
● |
Tunnels provide direct routes for ore transport from the mining areas to the Treaty OPC and divert surface water around mining areas
and facilities. Tunnels were assessed as having lower operational risks than alternative surface routes. |
| Uncertainty in permitting risk. |
● |
The permit covering the MTT route was secured from the BC Government in September 2014. |
| Poor ground conditions caused by unforeseen faults, areas of weaker than anticipated rock, and/or higher than assumed differential stresses, and unforeseen high water inflow rates that can slow down tunnel advance rate and increase costs. |
● |
Reasonable assumptions
made from preliminary-level investigations that include geological mapping of tunnel routes, geophysical surveys, drilling, and hydrogeological/geotechnical
sampling and testing. |
| |
● |
Significant drilling along the MTT route with geotechnical characterization has been completed. |
| |
● |
Geotechnical drilling and characterization along the mine water tunnel alignments are currently underway. |
| |
● |
Use of probe and pilot/cover drilling to assist in characterizing ground conditions ahead of tunnel advance. |
table continues…
| Seabridge Gold Inc. | 25-12 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| Risks |
Mitigation Measures |
| Impact of construction schedule delays. |
● |
The use of twinned tunnels to provide opportunities to advance alternate headings in problem areas, drilling and geophysical testing from surface. |
| |
● |
The use of probe and pilot/cover drilling in areas of difficult ground conditions. |
| |
● |
Obtaining the now-in-place permitting, allowing early tunnelling starts. |
| |
● |
Helicopter support prior to access road completion. |
| |
● |
Use of a faster to install primary MDX™ bolts followed by secondary bolts, instead of base case resin bar, will increase tunnel advance rates. |
| |
● |
Starting the MTT tunnel excavation as part of the early works significantly reduces the project schedule risk, particularly with early tunnel advance along the Mitchell to Saddle segment of the MTT. |
| Tailings Management Facility |
| TMF foundation conditions may vary adversely from PFS assumptions, requiring additional measures that result in an increase in TMF construction costs. |
● |
TMF foundation geotechnical and hydrological investigations to collect in-situ and laboratory data started in 2022, and are planned for 2023 and beyond, to support a FS and to update the TMF engineering analyses. |
| Source of suitable TMF materials of construction may be further from the current assumptions resulting in an increase in TMF construction cost. |
● |
KSM to complete investigations of quarries and borrow materials within the TMF impact area of the TMF and other site sources to ascertain the geotechnical and geochemical properties for use in dam construction, and to identify nearest locations of most suitable material for each TMF component. |
| TMF surface water inflow estimates may differ from those applied in the EA that could result in operational performance variance if not forecasted in engineering designs appropriately for surface water management. |
● |
Update estimates of meteorology and hydrology using site data collected since the EA, applying current methodologies for greater reliability for estimating large storm event volumes for retention or water management structures (e.g., diversion channels, spillways and tunnels.) |
| The potential for TMF cyclones to not produce enough sands to meet TMF construction rate of rise requirements could limit process throughput, particularly in the early years of the mine life. |
● |
Cyclone testing and geotechnical analysis to be carried out
on process tailings samples. |
| |
● |
Identify suitable contingency borrow sources to make up any
potential unforeseen cycloned sands shortage. |
| |
● |
Identify opportunities for advancing the construction of dam components to utilize cycloned sand surplus or by other materials of construction. |
table continues…
| Seabridge Gold Inc. | 25-13 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| Risks |
Mitigation Measures |
| Mine Site Water Management |
| Characterizing flow and quality of influent to WSD and HDS WTP system is key to successful water management in the mine area. Higher than anticipated flows or water chemistry could result in additional capital and operating cost to expand treatment facilities. |
● |
Updating
estimates of meteorology and hydrology through using site data collected since the EA, applying current methodologies for estimating
runoffs that are used on similar large watersheds in the coastal region. |
| |
● |
Constructing a site-wide water balance tool with technologically-relevant
software and building in flexibility for evaluating a wide range of scenarios to assess impacts on water management system design and
operation. |
| |
● |
Continued ABA/ML testing of proposed mine waste products to
further refine geochemical signatures of mine waste constituents, how they react over time, and what resultant RSF effluent is predicted
to be as the primary influent to the water retention and treatment system. |
| |
● |
Evaluation of improved water treatment technologies and management
approach geared toward specific streams of influent from various mine site sources (dewatering wells, tunnel water, surface water, and
RSF effluent), to yield improved discharge water quality. |
| |
● |
Evaluate waste rock engineering opportunities to minimize oxidation
of waste. |
| WSD geotechnical foundation conditions may vary from current design assumptions. There is a potential for voids in faulted calcareous sediments in the WSD footprint. If foundations conditions are poorer than current design assumptions, there could be an adverse impact in capital and development schedule. |
● |
Current site investigation is collecting the necessary geotechnical
data to confirm the geotechnical characterization of the WSD foundation. |
| |
● |
Poor rock conditions may require excavation of poor rock zones
to a suitable depth and potentially additional grouting. |
| Metallurgical Performance and Process |
| Lower than expected metal recoveries and copper grade of the concentrate produced. |
● |
Additional testwork to better characterize metallurgical response
of mineralization from the different ore sources. |
| |
|
|
| Lower than expected performance from the HPGR comminution circuit due to higher than expected moisture and/or clay content can result in a reduction of mill production. |
● |
Further process condition and flowsheet optimization would
improve process design to accommodate potential variations in metallurgical performance. |
| Seabridge Gold Inc. | 25-14 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
| 25.5 | 2022 Preliminary Economic Assessment
Risks |
| Table 25.4 | PEA Risks and Mitigation Measures |
| Risks |
Mitigation Measures |
| Open Pit Mining |
| Slope stability, safety, and production delays. |
● |
Throughout the planning, design, and engineering of the open pits, the KSM project team has identified hazards and developed mitigation
plans to reduce and manage risks related to the open pit slopes. |
| Underground Mining |
|
Impacts of uncertainties on meeting the production and mill feed schedules
such as:
|
● |
Design
assumptions for all of these are within demonstrated industry experience and are considered achievable.
|
| ● |
The rate at which the construction of the drawbells is accomplished |
● |
The development advance rate during the critical pre-production period, and subsequently in the production period, have been demonstrated
to be industry achievable. |
| ● |
The production ramp-up curve and maximum rate of draw of individual drawpoints |
|
|
| ● |
The number of drawpoints available for production at any one time, and the travel distance for the LHD vehicles. |
|
|
| Battery electric vehicles may not achieve production and cost estimates |
● |
Assumptions are based on manufacturers input and limited industry experience due to newness of technology |
| Uncertainties in predicting the fragmentation of the caved rock at the drawpoints. |
● |
Other block caving mines such as Palabora Mine have demonstrated that with careful planning and the availability of equipment to deal
with oversized rock, drawpoint production rates comparable to those proposed at Kerr and Iron Cap are achievable. |
| The ore pass and grizzly systems do not achieve the planned production rate, and the material transported to the passes is coarser than expected. |
● |
Employing
additional mobile breakage equipment and redesigning the undercut blasting to enhance the fragmentation during the early stages of the
column draw.
|
| |
● |
Pre-conditioning of the rock mass by hydraulic fracturing, which is expected to enhance the fragmentation of the material reporting to
individual drawpoint. |
| Uncertainties in geotechnical characterization |
● |
Well-positioned
geotechnical boreholes that have been geotechnically logged in detail and tested hydrogeologically.
|
| |
● |
Geotechnical drill holes in the general vicinity of the proposed access development that provide adequate indications of the quality
of the rock mass to minimize major uncertainties. |
| |
● |
Undertaking further geotechnical drilling in the future. |
table continues…
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| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
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| Risks |
Mitigation Measures |
| Abutment stresses and the interaction of the progressive advance of the undercut on the underlying drawpoints may cause more adverse stress conditions than currently estimated. |
● |
Adopting a stress-shadowing advanced undercut approach, instead of the currently proposed post undercut approach. |
| Unforeseen stress conditions and the adverse impact of secondary blasting. |
● |
Include ongoing rehabilitation of drawpoints and mucking drives. |
| The extent of surface disturbance from caving and the associated formation of the crater and more peripheral surface cracking may impact surface infrastructure. |
● |
Major infrastructure that might be critically impacted can be conservatively located well beyond the potential impact zone. |
| Inflow of surface runoff from rainfall and snowmelt within the catchment area formed by natural slopes. |
● |
A water management system does not rely on any temporary storage
of water in any of the mine openings otherwise required for the operation of the mine. |
| |
● |
Dedicated water diversion tunnels, a gravity drainage tunnel
at Iron Cap, and a dedicated storage capacity and pumping system included at Kerr. |
| The development of voids beneath the back of the active cave, and the associated concerns about hazardous conditions developing and air blasts occurring. |
● |
Maintaining good knowledge about the cave profile as cave mining
progresses by ongoing monitoring of the geometry of the caved material using techniques such as microseismic monitoring and seismic tomography. |
| Mud rushes due to the increased presence of fines. |
● |
Monitoring of the flow of water from individual drawpoints. |
| |
● |
Temporary closure of certain areas that are deemed vulnerable
until water flows at drawpoints decrease sufficiently. |
| |
● |
Adoption of remote mucking until conditions are deemed to be
acceptable to return to full entry. |
| Metallurgical Performance and Process |
| Lower than expected metal recoveries and copper grade of the concentrate produced. |
● |
Additional testwork to better characterize metallurgical response
of mineralization from the different ore sources. |
| Lower than expected performance from the HPGR comminution circuit due to higher than expected moisture and/or clay content can result in a reduction of mill production. |
● |
Further process condition and flowsheet optimization would
improve process design to accommodate potential variations in metallurgical performance. |
table continues…
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| Risks |
Mitigation Measures |
|
| Geological and Grade Continuity Uncertainty |
| A significant portion of the planned mill feed for the PEA is in the Inferred category. The location, extent, and quality of the Inferred Mineral Resource may be different from what has been modeled. |
● |
Additional drilling from underground to improve confidence
in the Mineral Resources when access is gained during development. |
| |
● |
Mass mine method of block cave
can tolerate a certain variation in the modeled location, extent and quality of the mineral resource.
|
| |
● |
The PEA mine plan relies on
open pit mining of the upper Kerr deposit during the payback period where the majority of the Mineral Resources are in the Indicated category.
|
| |
● |
There is adequate time to increase the mineral resource confidence
categories prior to committing to the PEA mine development option. |
| 25.6 | Mineral Resource Risks |
| Table 25.5 | Mineral Resource Risks |
| Risks |
Mitigation Measures |
| Mineral Resources |
| Changes in the geological model due to unrecognized faults and other geological structures. |
Update long term and short term mine plans with production data and mapping. |
| Large amount of Inferred in the parts of the deposits amenable to block cave mining. |
Infill drilling when underground access has been established. |
| Seabridge Gold Inc. | 25-17 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
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It is recommended that Seabridge focus on advancing the KSM
development by completing the data collection required to conduct a FS. The majority of the FS data collection summarized in Table 26.1
is geotechnical.
Infill drilling of the Iron Cap and Kerr deposits to upgrade
classification will be considered at a future date.
| Table 26.1 | Summary of Recommendations and Associated Costs |
| Program |
Cost (US$ million) |
| Pit Slope Geotech |
4.2 to 5.3 |
| Rock Storage Facilities Geotech |
0.5 |
| Metallurgical Testing |
4.0 to 5.0 |
| Water Storage Dam Geotech |
1.0 to 1.5 |
| TMF Geotech |
8.0 to 10.0 |
| Mine Water Tunnel Geotech |
3.0 to 4.0 |
| Site Infrastructure Geotech |
1.0 |
| TOTAL |
21.7 to 27.3 |
| 26.2 | Data Collection to Complete A
Feasibility Study |
The following data collection is required before a FS can
be completed.
The following geotechnical and hydrogeological work is recommended
to support future assessments of the KSM open pit slopes:
| ● | complete a field program of large-scale hydrogeological testing via pumping wells. The results of these tests are required to increase
the confidence in the design of the depressurization system for the open pit slopes of the Mitchell, East Mitchell ,and Sulphurets zones.
A total of five pumping wells and ten monitoring wells for a total meterage of approximately 3,000 m is required |
| ● | complete a field program of geotechnical drilling in the Sulphurets zone to support updates to the geotechnical model and slope designs.
It is estimated that five geotechnical holes with a total meterage of approximately 2,500 m is required. A program of televiewer surveys
of the drill holes, geotechnical logging of the core, and laboratory testing should be undertaken |
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| ● | update the hydrogeological model for the latest geological model and mine plans. This update is required to improve the reliability
of the depressurization quantity estimates |
| ● | extend the slope design updates to the east and west walls of the Mitchell open pit. Develop a set of updated slope design recommendations
for the whole zone that reflect the updates to the geotechnical model |
| ● | update the slope design recommendations for Sulphurets open pits based on the results of the recommended geotechnical drilling. |
The recommended work is estimated to cost US$4.2 million
to US$5.3 million. This estimate includes drilling, drill pads, field support (helicopters, camp), and engineering fees. The range of
costs are based on per drilled metre expenditures estimated previously.
| 26.2.2 | Rock Storage Facilities Geotech |
KCB recommends that a geotechnical site investigation program
be carried out for further delineation and characterization of foundation soils in Mitchell Valley, within the footprint of the Mitchell
RSF, with a focus on the area of a known deposit of weak soils near the MTT muck piles. The characterization would use Standard Penetration
(SPT) testing and undisturbed sampling for collection of samples for laboratory strength testing. This program will include:
| ● | geotechnical drillholes in the RSF toe above the WSF pond area. The holes should be advanced up to 60 m in overburden, with Shelby
tube samples and SPT tests. Mobilization of a suitable rig for this program can be combined with drilling in the TMF area for borrow and
foundation assessment |
| ● | test pits to assess surface soil conditions may be used to augment drilling (for early-stage investigations, these will require helicopter-supported
equipment mobilization) |
| ● | geotechnical testing program including consolidation, triaxial, direct shear, and index testing. |
| ● | The cost of this drilling and a subsequent geotechnical laboratory program is US$400,000. |
A stability assessment and design review is required to assess
the findings of the site investigations and to review suitability of existing designs to mitigate the presence of this known weak soil
layer. The cost of the assessment and design review is approximately US$100,000.
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| 26.2.3 | Metallurgical Testing |
In order to optimize process conditions and establish design-related
parameters and more accurate metallurgical performance projections for the next stage of study, further metallurgical test work is recommended,
especially the locked cycle flotation tests and cyanidation tests on various ore composite samples from the Mitchell, East Mitchell, and
Sulphurets. Variability tests are also recommended for the Mitchell and East Mitchell deposits. Tetra Tech makes the following recommendations:
| ● | additional metallurgical test work and mineralogical evaluations should be conducted to further optimize process conditions and to
establish design-related parameters for the next stage of study. The test work should include variability testing of samples from all
deposits, especially from the Mitchell, East Mitchell, and Sulphurets deposits. The variability tests should be a part of the geo-metallurgical
testing program that is recommended for further studies to better understand metallurgical responses of the mineralization in these resources.
The test work should further investigate the effect of low slurry solid density on copper and gold in bulk rougher flotation. The test
program will provide inputs for geological modelling development and mine plan update for better mill feed control |
| ● | technically and economically feasible gold recovery processes from the gold-bearing products rejected from copper and gold bulk flotation
of the KSM mineralization, such as first cleaner scavenger tailing and pyrite concentrate, should be further investigated. The processes
should include further optimizing cyanide leach conditions, improving extracted gold and silver recovery from cyanide leach solution,
and alternative gold and silver extraction processes, such as thiosulphate leaching, ultrafine regrinding treatment, and bacterial oxidation |
| ● | further study should be conducted to optimize the proposed cyanide recovery and destruction methods. The study should include large
scale tests using cyanidation+SART+AVR combined process for gold/silver/copper recovery to verify the process economics. Additional value
that may contribute from associated copper due to co-dissolution during gold and silver extraction should be investigated. The test work
should also focus on the optimum flowsheet development for the upper East Mitchell mineralization |
| ● | a metallurgical laboratory test program should be performed on ore composites representing each year of the initial seven years of
open pit mine production from Mitchell, East Mitchell and Sulphurets, according to the updated mining plan |
| ● | further study into economical water treatment methods is recommended for water from the CIL pond. |
The estimated costs of these programs range from US$4.0 million
to US$5.0 million inclusive of sample shipping and short-term storage costs. Costs for sample collection (i.e., drilling) are not included,
as this recommendation assumes samples would be derived from drill cores stored on site or in off-site warehouses.
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Water Storage Facility and Mine Site Water
Management
KCB recommends additional hydrogeological and geotechnical
site investigations in the WSD footprint area including:
| ● | hydrogeological/geological data gap analysis and review of additional water level and time series piezometer data to interrogate interaction
of geological model assumptions with hydrogeological model parameters |
| ● | additional geological mapping and geophysical surveying of the WSD footprint area. May include high-resolution drone LiDAR and photogrammetry
to image and map detailed topography and geology of the WSD canyon area |
| ● | review locations and requirements for the drilling of three large diameter wells for pumping tests, with associated monitoring holes |
| ● | test pit programs and geotechnical laboratory testing program over the WSD footprint area to assess soil conditions |
Based on drilling and geophysical quotes, the cost of these
site investigation programs is US$1.0 million to US$1.5 million, including an allowance for drill pads, instrumentation, pumping test
costs field support (helicopters, camp), and engineering fees.
KCB recommends additional hydrogeological and geotechnical
site investigations in the TMF footprint area consisting of:
| ● | hydrogeological data gap analysis and review of requirements for additional water level and time series piezometer data. Data gap
analysis to refine requirements for locations of pumping tests or other investigations |
| ● | data gap review of geotechnical (foundation) and geochemical (characterization of borrow and diversion excavations) data requirements;
seismic surveying and heli-portable auger soil sampling to further delineate borrow resources and characterize construction materials |
| ● | geotechnical drilling with hydrogeological testing (packer, multilevel piezometer, and data logger installations) at the North, Saddle
and Southeast dams. Total of up to: 20 drillholes for foundation and borrow, 11 large diameter wells for pump testing, and 7 cone penetration
tests are recommended for dam foundation assessment. Test pitting for borrow investigations may require helicopter support for equipment
mobilization |
| ● | seep mapping, overburden characterization, and additional overburden permeability testing in the CIL Residue Cell area to further
inform the next design stages for determination of drain requirements beneath the Saddle Dam and CIL Cell liner. |
Based on geophysical and drilling quotes, costs for these
site investigation and laboratory testing programs is US$8.0 million to US$10.0 million including an allowance for line cutting,
drill pads, instrumentation, pump testing, field support (helicopters, camp), and engineering fees.
| Seabridge Gold Inc. | 26-4 | 219221-01-RPT-001 |
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MTT drilling and design is complete for construction, portal
infrastructure investigations were complete in 2021, and MTT portal infrastructure design is currently ongoing. Drilling is currently
underway on the alignment of the Mitchell Diversion Tunnel. The following recommendations are for investigating the diversion tunnel portals
and the alignment of the remaining water diversion tunnel required at start-up which is the McTagg Diversion Tunnel:
Geotechnical
KCB recommends additional geological and geotechnical investigations
at the portal locations where these have not been investigated already, and where feasible along the tunnel alignments in the PFS design.
The recommended investigations consist of:
| ● | data gap analysis for tunnel design parameters including geological, geotechnical, and geochemical aspects |
| ● | additional mapping and rock sampling to better characterize properties of lithological units at the portals and along the alignments
for geotechnical and geochemical assessments |
| ● | more detailed mapping of portal areas and targeted geophysical investigations to assess locations of potential structures (e.g., faults,
contacts, or water bearing structures along tunnel alignments) |
| ● | drilling for diversion tunnels and will primarily focus on shallower holes, with focus on portal and inlet area rock mass characteristics
and sampling of lithological units. Several longer holes (up to 800 m) are recommended to test regional fault systems |
| ● | geotechnical and geochemical laboratory testing on samples obtained from drilling and mapping programs. |
The programs will inform selection of the optimum tunnelling
method, allow refinement of tunnelling risk, better identify diversion tunnel lining requirements, portal locations, and portal development
designs, and assist with determination of appropriate contingencies. The cost of these programs is estimated to range between US$3.0 million
and US$4.0 million, including drilling costs, drill pads, field support (helicopters, camp), and engineering fees.
| 26.2.7 | Site Infrastructure Geotech |
Geotechnical drilling should be done to support the design
of plant infrastructure and other buildings on the mine site. A nominal allowance of 20 holes geotechnical holes averaging 25 m deep each
is estimated to be required. The approximate cost for this is US$1.0 million.
| Seabridge Gold Inc. | 26-5 | 219221-01-RPT-001 |
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Preliminary Economic Assessment NI 43-101 Technical Report | | |
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| Seabridge Gold Inc. | 27-1 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
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Preliminary Economic Assessment NI 43-101 Technical Report | | |
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| Seabridge Gold Inc. | 27-3 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
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The porphyry copper deposit at El Salvador, Chile. Economic Geology, v.70, 857-912.
Hazen (2008). Comminution Testing
(Project # 10724). February 2008.
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Water Management, and Tailings Storage Systems, KSM Project, British Columbia, Canada. Rev C.1. April 2016.
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Report.
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Facility, December 21, 2012.
KCB (2012b). 2012 Site Investigation
Report for the Mine Area.
KCB (2012c). 2012 TMF Site Investigations.
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of Tailing Management Facility.
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- Value Engineering Study Report.
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of Rock Storage Facilities and Design of Associated Water Management Facilities (Technical Report in Support of 2012 PFS), January 29,
2013.
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Facilities Design Report. July 8, 2013.
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KCB (2016a). Best Available Technology
(BAT) Study for Tailing Management at the KSM Project. June 22, 2016.
KCB (2016b), 2016 Pre-Feasibility Study Update, Addendum
Report, Tailing Management Facility Design – Rev. 1, September 22, 2016
KCB (2016c), 2016 Pre-Feasibility Study Update, Addendum
Report – Mine Area Water Management – Rev. 1, September 27, 2016
KCB (2016d), 2016 Review of Regional Climate, 2016 Pre-Feasibility
Study Update Addendum Report Tailing Management Facility Design – Rev. 1, September 22, 2016
KCB (2019a), September 2018 Site Visit TMF West Till Borrow
Area Sampling and Geotechnical Laboratory Testing - Rev. 1, January 23, 2019.
KCB (2019b), Evaluation of Results from Batch 1 and 2 Monzonite
Geochemical and Geotechnical Laboratory Testing Programs, March 20, 2019.
KCB (2020a) KSM 2020 Preliminary Economic Assessment, Review
of PEA Mine Area Catchments – Rev. 1, February 12, 2020
KCB (2020b) KSM 2020 Preliminary Economic Assessment, Water
and Waste Management - Basis of Quantities – Rev. 3, March 13, 2020
KCB (2020c) KSM 2020 Preliminary Economic Assessment, Diversion
Tunnel Modifications, January 28, 2020
KCB (2021), “2021 Site Investigation
Factual Report”. Prepared for KSM Mining ULC. February 2.
KCB (2022a), “2022 PFS Mine
Area Water Tunnels Mitchell and McTagg Diversion Tunnel Design Final”. Prepared for KSM Mining ULC. June 7.
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Area Water Tunnels Design”. Prepared for KSM Mining ULC. July 22.
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and mineral deposits in the vicinity of the Mitchell and Sulphurets glaciers, Northwest British Columbia. Unpublished M.Sc. thesis: Vancouver,
Canada, University of British Columbia, 142 p.
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Overview of the Sulphurets area, northwestern British Columbia. In Schroeter, T.G., ed., Porphyry deposits of the northwestern Cordillera
of North America: Canadian Institute of Mining, Metallurgy and Petroleum, Special Volume 46, PART B - Porphyry Copper (±Au±Mo)
Deposits of the Calc-Alkalic Suite, pp. 473-483.
Köeppern Machinery Australia
Pty Ltd. (2010). High Pressure Comminution Test Work on Processing of Mitchell Zone Ore. February 2010.
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River Area, Northwestern British Columbia, Canada: an application of research in metallogenesis to enhance exploration success. In: MDRU
Iskut River Metallogeny Project – Annual Report, Year 3, 7.1-7.37.
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Preliminary Economic Assessment NI 43-101 Technical Report | | |
Margolis, J. (1993). Geology and intrusion-related
copper-gold mineralization, Sulphurets, British Columbia. Unpublished Ph.D. thesis, Eugene, USA, University of Oregon, 289 p.
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of Disclosure for Mineral Projects, June 30, 2011.
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Tectonics and metallogeny of the British Columbia, Yukon and Alaskan Cordillera, 1.8 Ga to the present. Mineral Deposits of Canada: A
Synthesis of Major Deposit-Types, District Metallogeny, the Evolution of Geological Provinces, and Exploration Methods. Edited by W.D.
Goodfellow. Geological Association of Canada, Mineral Deposits Division, Special Publication, 5, 755-791.
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System. April 29, 2022.
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B., Maksaev, V., Sepúlveda, F., de Parseval, P., Rivas, P., Lahsen, A. and Parada, M.A. (2001). The composition of gold in the
Cerro Casale gold-rich porphyry deposit, Maricunga belt, northern Chile. The Canadian Mineralogist, 39(3), 907-915.
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and Overburden Piles Investigation and Design Manual: Interim Guidelines. Prepared for the British Columbia Mines Waste Rock Pile Research
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(accessed January 2013).
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Research Centre, Kerr Project Report No.1. October 1990.
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Research Centre, Kerr Project Report No.2. April 1991.
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Gravity Sedimentation, Pulp Rheology, Vacuum Filtration and Pressure Filtration Studies. December 2009.
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Environmental Assessment Certificate/Environmental Impact Statement for the KSM Project. May 2013.
SGS Minerals Services (2010). An Investigation
into the Grindability and Flotation Characteristics of Two Samples From the KSM Deposit. February 2010.
SGS Minerals Services (2010). An Investigation
into the Recovery of Cyanide and Detoxification of Leach Tailing From Cyanidation of KSM Project Samples. February 2010.
Sillitoe, R.H. (2010). Porphyry copper
systems. Economic geology, 105(1), 3-41.
Singer, D.A., Berger, V.I., and Moring,
B.C. 2008. Porphyry copper deposits of the world: Database and grade and tonnage models. U.S. Geological Survey Open-File Report 2008-1155.
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Of Western Ontario (2010). Sub-microscopic Gold determination of Cyanide Leach Feeds. December 21, 2010.
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Prefeasibility Study. Document No. 1252880100-REP-R0001-05. Prepared for Seabridge Gold Inc. June 22, 2012.
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Update on the Brucejack Project, Stewart, BC. Document No. 1491990100-REP-R0001-01. June 19, 2014.
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Prefeasibility Study Update and Preliminary Economic Assessment. Document No. 735-1552880100-REP-R0002-02. Prepared for Seabridge Gold
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Prefeasibility Study Update. Document No. 219221-01-RPT-002. Prepared for Seabridge Gold Inc. April 3, 2020.
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| Seabridge Gold Inc. | 27-7 | 219221-01-RPT-001 |
| KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and
Preliminary Economic Assessment NI 43-101 Technical Report | | |
Certificates
of Qualified Persons
Certificate
of Qualified Person
I, Hassan Ghaffari, P.Eng., do hereby certify:
| ● | I am a Director of Metallurgy with Tetra Tech Inc. with a business address at Suite 1000, 10th Floor, 885 Dunsmuir Street,
Vancouver, BC, V6C 1N5. |
| ● | This certificate applies to the technical report entitled “KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and Preliminary
Economic Assessment, NI 43-101 Technical Report”, with an effective date of August 08, 2022 (the “Technical Report”). |
| ● | I am a graduate of the University of Tehran (M.A.Sc., Mining Engineering, 1990) and the University of British Columbia (M.A.Sc., Mineral
Process Engineering, 2004). |
| ● | I am a member in good standing of the Engineers and Geoscientists British Columbia (#30408). |
| ● | My relevant experience includes 31 years of experience in mining and mineral processing plant operation, engineering, project studies
and management of various types of mineral processing, including hydrometallurgical mineral processing for porphyry mineral deposits. |
| ● | I am a “Qualified Person” for the purposes of National Instrument 43-101 Standards of Disclosure for Mineral Projects
(NI 43-101) for those sections of the Technical Report that I am responsible for preparing. |
| ● | I conducted a personal inspection of the KSM property on September 20, 2014. |
| ● | I am responsible for Sections 1.1, 1.3, 1.11, 1.13, 1.14.1, 1.14.7 (except mining and TMF), 1.14.8, 1.15, 1.16, 2.0, 3.0, 5.0, 18.1,
18.5, 18.6, 18.7, 18.8, 18.9, 18.12, 18.13, 18.14, 18.15, 21.1 and 21.2 (except mining, tunnels, rail system, permanent electrical power
supply and distribution, energy recovery and mini hydro generation station costs), 22.0, 24.18 (except mining, tunnels, rail system, TMF,
water mgmt., permanent electrical power supply and distribution and energy recovery), 24.21 (except mining, tunnels, rail system, permanent
electrical power supply and distribution, energy recovery and mini hydro generation station costs), 24.22, 25.1, 25.2.6, 25.3.4, 26.1
and 27.0 (only references from sections for which I am responsible) of the Technical Report. |
| ● | I am independent of Seabridge Gold Inc. as Independence is defined by Section 1.5 of NI 43-101. |
| ● | I have had involvement with the KSM property that is the subject of the Technical Report, in acting as a Qualified Person for the
“KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study” dated June 22, 2012, “2016 KSM (Kerr-Sulphurets-Mitchell) Prefeasibility
Study Update and Preliminary Economic Assessment” dated October 6, 2016, and “2020 KSM (Kerr-Sulphurets-Mitchell) Prefeasibility
Study Update” dated April 30, 2020. |
| ● | I have read NI 43-101 and the sections of the Technical Report that I am responsible for have been prepared in compliance with NI
43-101. |
| ● | As of the date of this certificate, to the best of my knowledge, information and belief, the section of the Technical Report that
I am responsible for contain all scientific and technical information that is required to be disclosed to make the technical report not
misleading. |
Signed and dated this 8th day of August, 2022
Hassan Ghaffari, P.Eng.
Director of Metallurgy
Tetra Tech Inc.
Certificate
of Qualified Person
I, Jianhui (John) Huang, Ph.D., P.Eng., do hereby certify:
| ● | I am a Senior Metallurgist with Tetra Tech Inc. with a business address at Suite 1000, 10th Floor, 885 Dunsmuir Street,
Vancouver, British Columbia, V6C 1N5. |
| ● | This certificate applies to the technical report entitled “KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and Preliminary
Economic Assessment, NI 43-101 Technical Report”, with an effective date of August 08, 2022 (the “Technical Report”). |
| ● | I am a graduate of North-East University, China (B.Eng., 1982), Beijing General Research Institute for Non-ferrous Metals, China (M.Eng.,
1988), and Birmingham University, United Kingdom (Ph.D., 2000). |
| ● | I am a member in good standing of the Engineers and Geoscientists British Columbia (#30898). |
| ● | My relevant experience includes over 36 years involvement in mineral processing for base metal ores, gold and silver ores, and rare
metal ores, and mineral processing plant operation and engineering including hydrometallurgical mineral processing for porphyry mineral
deposits. |
| ● | I am a “Qualified Person” for purposes of National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI
43-101) for those sections of the Technical Report that I am responsible for preparing. |
| ● | My most recent personal inspection of the KSM property was from June 21, 2017 to June 22, 2017. I visited ALS Metallurgical laboratory
several times during the last 10 years for the KSM project, including the most visit on November 02, 2021, to witness metallurgical testing
and samples. |
| ● | I am responsible for Sections 1.8, 1.12, 1.14.6, 1.14.7 (excluding mining costs), 13.0, 17.0, 19.0, 21.2.3, 21.2.4, 21.3 (excluding
mining costs), 24.17, 24.19, 24.21.2 (excluding open pit mining and underground mining costs) 25.2.4, 25.3.2, 25.4 and 25.5 (metallurgy
and mineral process only), 26.2.3 and 27.0 (only references from sections for which I am responsible) of the Technical Report. |
| ● | I am independent of Seabridge Gold Inc. as Independence is defined by Section 1.5 of NI 43-101. |
| ● | I have had involvement with the KSM property that is the subject of the Technical Report, in acting as a Qualified Person for the
“Kerr-Sulphurets-Mitchell Preliminary Economic Assessment 2008”, dated December 22, 2008, the “Kerr-Sulphurets-Mitchell
Preliminary Economic Assessment Addendum – 2009” dated September 8, 2009, the “Kerr-Sulphurets-Mitchell (KSM) Prefeasibility
Study” dated March 31, 2010, the “Kerr-Sulphurets-Mitchell (KSM) Prefeasibility Study Update” dated June 15, 2011, “2012
KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study” dated June 22, 2012, “2016 KSM (Kerr-Sulphurets-Mitchell) Prefeasibility
Study Update and Preliminary Economic Assessment” dated October 6, 2016, and “2020 KSM (Kerr-Sulphurets-Mitchell) Prefeasibility
Study Update” dated April 30, 2020. |
| ● | I have read NI 43-101 and the sections of the Technical Report that I am responsible for have been prepared in compliance with NI
43-101. |
| ● | As of the date of this certificate, to the best of my knowledge, information and belief, the section of the Technical Report that
I am responsible for contain all scientific and technical information that is required to be disclosed to make the technical report not
misleading. |
Signed and dated this 8th day of August, 2022
Jianhui (John) Huang, Ph.D., P.Eng.
Senior Metallurgist
Tetra Tech Inc.
Certificate
of Qualified Person
I, Henry H. Kim, P.Geo., do hereby certify:
| ● | I am employed as a Senior Resource Geologist with Wood Canada Limited, with a business address at #400-111 Dunsmuir St., Vancouver,
BC, Canada V6B 5W3. |
| ● | This certificate applies to the technical report entitled “KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and Preliminary
Economic Assessment, NI 43-101 Technical Report”, with an effective date of August 08, 2022 (the “Technical Report”). |
| ● | I graduated with a B.Sc. degree in geology from University of British Columbia in 2008. I completed the Applied Geostatistics Citation
Program, with the University of Alberta in 2014. |
| ● | I am a registered Professional Geoscientist with the Engineers and Geoscientists British Columbia (#42519). |
| ● | I have practiced my profession for 14 years. I have been involved in exploration drilling programs involving core logging, sampling,
QAQC, and database validation. I conducted onsite grade control and management of mine operation crews for an open pit mine in eastern
Canada. I have conducted audits and due diligence exercises on geological models, sampling databases, drill hole spacing studies, preparation
of resource models, validation of mineral resource estimates, and mineral resource estimates on advanced mining studies and active mine
operations. |
| ● | I am a “Qualified Person” for purposes of National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI
43-101) for those sections of the Technical Report that I am responsible for preparing. |
| ● | I conducted a personal inspection of the KSM property from May 24 to May 26 in 2022. |
| ● | I am responsible for Sections 1.2, 1.4, 1.5, 1.6, 3.0 (matters related to mineral claims and royalties), 4.0, 6.0, 7.0, 8.0, 9.0,
10.0, 11.0, 12.0, 14.0, 23.0, 25.2.1, 25.5 (matters related to mineral resources), 25.6, and 26.0 (matters related to mineral resources)
and 27.0 (only references from sections for which I am responsible) of the Technical Report. |
| ● | I am independent of Seabridge Gold Inc. as Independence is defined by Section 1.5 of NI 43-101. |
| ● | I have no prior involvement with the KSM Property that is the subject of the Technical Report. |
| ● | I have read NI 43-101 and the sections of the Technical Report that I am responsible for have been prepared in compliance with NI
43-101. |
| ● | As of the date of this certificate, to the best of my knowledge, information and belief, the section of the Technical Report that
I am responsible for contain all scientific and technical information that is required to be disclosed to make the technical report not
misleading. |
Signed and dated this 8th day of August, 2022
Henry H. Kim, P.Geo.
Senior Resource Geologist
Wood Canada Limited
Certificate
of Qualified Person
I, James H. Gray, P.Eng., do hereby certify:
| ● | I am a Mining Engineer with Moose Mountain Technical Services with a business address at #210 1510 2nd Street North, Cranbrook, British
Columbia, V1C 3L2. |
| ● | This certificate applies to the technical report entitled “KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and Preliminary
Economic Assessment, NI 43-101 Technical Report”, with an effective date of August 08, 2022 (the “Technical Report”). |
| ● | I am a graduate of the University of British Columbia, (Bachelor of Applied Science – Mineral Engineering, 1975). |
| ● | I am a member in good standing of Engineers and Geoscientists British Columbia (#11919). |
| ● | My relevant experience includes mine operation, supervision, and mining engineering in North America, South America, Australia, Eastern
Europe, and Greenland. |
| ● | I am a “Qualified Person” for purposes of National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI
43-101) for those sections of the Technical Report that I am responsible for preparing. |
| ● | My most recent personal inspection of the KSM property was from June 21 to 22, 2017. |
| ● | I am responsible for MTT and rail systems for 1.7, 1.9.4 (MTT), 1.9.5, 1.11 and 1.12 (open pit mining, tunnels and rail system), 1.14.2,
1.14.3, 1.14.5, 1.14.7 (open pit mining, tunnels and rail system), 15.0, 16.0, 18.3, 18.4, 21.0 (open pit mining, tunnels and rail system),
24.0 (open pit mining, MTT, tunnel costs and rail system), 25.3.1, 25.0 and 26.0 (open pit mining, MTT and rail system) and 27.0 (only
references from sections for which I am responsible) of the Technical Report. |
| ● | I am independent of Seabridge Gold Inc. as Independence is defined by Section 1.5 of NI 43-101. |
| ● | I have had previous involvement with the KSM property that is the subject of the Technical Report, in acting as a Qualified Person
for the “Kerr-Sulphurets-Mitchell Preliminary Economic Assessment 2008”, dated December 22, 2008, the “Kerr-Sulphurets-Mitchell
Preliminary Economic Assessment Addendum – 2009” dated September 8, 2009, the “Kerr-Sulphurets-Mitchell (KSM) Prefeasibility
Study” dated March 31, 2010, the “Kerr-Sulphurets-Mitchell (KSM) Prefeasibility Study Update” dated June 15, 2011, the
“2012 KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study” dated June 22, 2012 and amended November 11, 2014, and the “2016
KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study Update and Preliminary Economic Assessment” dated October 6, 2016, and “2020
KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study Update” dated April 30, 2020. |
| ● | I have read the NI 43-101 and the sections of the Technical Report that I am responsible for have been prepared in compliance with
the NI 43-101. |
| ● | As of the date of this certificate, to the best of my knowledge, information and belief, the section of the Technical Report that
I am responsible for contain all scientific and technical information that is required to be disclosed to make the technical report not
misleading. |
Signed and dated this 8th day of August, 2022
James H. Gray, P.Eng.
Principal Mining Engineer
Moose Mountain Technical Services
Signed and dated this 8th day of August, 2022
Ross D. Hammett, Ph.D., P.Eng.
Senior Engineer & Principal
WSP Golder Inc.
Certificate
of Qualified Person
I, Derek Kinakin, P.Geo., P.G., do hereby certify:
| ● | I am a Senior Engineering Geologist with BGC Engineering Inc. with a business address at 234 St. Paul Street, Kamloops, British Columbia,
V2C 6G4. |
| ● | This certificate applies to the technical report entitled “KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and Preliminary
Economic Assessment, NI 43-101 Technical Report”, with an effective date of August 08, 2022 (the “Technical Report”). |
| ● | I am a graduate of Simon Fraser University (B.Sc. (Hons), 2002; M.Sc., 2005). |
| ● | I am a member in good standing of Engineers and Geoscientists British Columbia (#32720). |
| ● | My relevant experience includes 20 years of rock mechanics research, slope stability assessments, and slope designs for open pit mines
in Canada, US, and Africa. |
| ● | I am a “Qualified Person” for purposes of National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI
43-101) for those sections of the Technical Report that I am responsible for preparing. |
| ● | My most recent personal inspection of the KSM property was August 13, 2018 to August 17, 2018. |
| ● | I am responsible for Section 1.9.1 (geohazards), 16.2.4 (pit slope geotech.), 25.4 (geohazards), 26.2.1 (pit slope geotech.) and 27.0
(only references from sections for which I am responsible) of the Technical Report. |
| ● | I am independent of Seabridge Gold Inc. as Independence is defined by Section 1.5 of NI 43-101. |
| ● | I have had involvement with the KSM property that is the subject of the Technical Report, in acting as a Qualified Person for the
“2016 KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study Update and Preliminary Economic Assessment” dated October 6, 2016,
and “2020 KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study Update” dated April 30, 2020. |
| ● | I have read NI 43-101 and the sections of the Technical Report that I am responsible for have been prepared in compliance with NI
43-101. |
| ● | As of the date of this certificate, to the best of my knowledge, information and belief, the section of the Technical Report that
I am responsible for contain all scientific and technical information that is required to be disclosed to make the technical report not
misleading. |
Signed and dated this 8th day of August, 2022
Derek Kinakin, P.Geo., P.G.
Senior Engineering Geologist
BGC Engineering Inc.
Certificate
of Qualified Person
I, David A. Willms, P.Eng., do hereby certify:
| ● | I am a Senior Geotechnical Engineer with Klohn Crippen Berger Ltd. with a business address at Suite 500, 2955 Virtual Way, Vancouver,
British Columbia, Canada, V5M 4X6. |
| ● | This certificate applies to the technical report entitled “KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and Preliminary
Economic Assessment, NI 43-101 Technical Report”, with an effective date of August 08, 2022 (the “Technical Report”). |
| ● | I am a graduate of the University of British Columbia, 2003, with a Bachelor of Applied Science in Geological Engineering, and 2010
with an M.Eng. in Geological Engineering. |
| ● | I am a member in good standing of the Engineers and Geoscientists British Columbia (#33062). |
| ● | My relevant experience includes more than 18 years of experience in the mining industry, with a focus on tailings management. |
| ● | I am a “Qualified Person” for purposes of National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI
43-101) for those sections of the Technical Report that I am responsible for preparing. |
| ● | I conducted a personal inspection of the KSM property on May 24, 2022. |
| ● | I am responsible for Section 1 (RSF, WSF, TMF, site water management and water tunnels), 18.2, 21.0 and 24.0 (RSF, WSF, TMF, site
water management and water tunnels), 25.0 and 26.0 (RSF, WSF, TMF, site water management, water tunnels and site geotechnical) and 27.0
(only references from sections for which I am responsible) of the Technical Report. |
| ● | I am independent of Seabridge Gold Inc. as Independence is defined by Section 1.5 of NI 43-101. |
| ● | I have no prior involvement with the KSM Property that is the subject of the Technical Report. |
| ● | I have read NI 43-101 and the sections of the Technical Report that I am responsible for have been prepared in compliance with NI
43-101. |
| ● | As of the date of this certificate, to the best of my knowledge, information and belief, the section of the Technical Report that
I am responsible for contain all scientific and technical information that is required to be disclosed to make the technical report not
misleading. |
Signed and dated this 8th day of August, 2022
David A. Willms, P. Eng.
Senior Geotechnical Engineer
Klohn Crippen Berger Ltd.
Certificate
of Qualified Person
I, Neil Brazier, P.Eng., do hereby certify:
| ● | I am a Principal with WN Brazier Associates Inc. with a business address at #8–3471 Regina Ave., Richmond, BC. V6X 2K8 |
| ● | This certificate applies to the technical report entitled “KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and Preliminary
Economic Assessment, NI 43-101 Technical Report”, with an effective date of August 08, 2022 (the “Technical Report”). |
| ● | I am a graduate of the University of Saskatchewan (B.Sc. Electrical Engineering, 1969). |
| ● | I am a member in good standing of the Engineers and Geoscientists British Columbia (#8337). |
| ● | My relevant experience includes engineering, construction supervision, and commissioning of a large number of diesel and combustion
turbine power plants, high-voltage transmission lines and substations for mining applications. |
| ● | I am a “Qualified Person” for purposes of National Instrument 43-101 (NI 43-101) for those sections of the Technical Report
that I am responsible for preparing. |
| ● | My most recent personal inspection of the KSM property was from October 4 to October 7 in 2021. |
| ● | I am responsible for portions of Sections 1.11 and 1.14.7 related to permanent electrical power supply and distribution, energy recovery,
and mini hydro generation station costs of the Technical Report, 18.10, 18.11, portions of Section 21.1 and 21.2 related to permanent
electrical power supply and distribution, energy recovery, and mini hydro generation station costs of the Technical Report, portions of
Section 24.18.2, 24.18.3, 24.18.4 and portions of Section 24.21 related to permanent electrical power supply and distribution and 27.0
(only references from sections for which I am responsible) of the Technical Report. |
| ● | I am independent of Seabridge Gold Inc. as Independence is defined by Section 1.5 of NI 43-101. |
| ● | I have had involvement with the KSM property that is the subject of the Technical Report, in acting as a Qualified Person for the
“Kerr-Sulphurets-Mitchell Preliminary Economic Assessment 2008”, dated December 22, 2008, the “Kerr-Sulphurets-Mitchell
Preliminary Economic Assessment Addendum – 2009” dated September 8, 2009, the “Kerr-Sulphurets-Mitchell (KSM) Prefeasibility
Study” dated March 31, 2010, the “Kerr-Sulphurets-Mitchell (KSM) Prefeasibility Study Update” dated June 15, 2011, the
“KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study” dated June 22, 2012 and the “2016 KSM (Kerr-Sulphurets-Mitchell)
Prefeasibility Study Update and Preliminary Economic Assessment” dated October 6, 2016, and “2020 KSM (Kerr-Sulphurets-Mitchell)
Prefeasibility Study Update” dated April 30, 2020. |
| ● | I have read NI 43-101 Standards of Disclosure for Mineral Projects (NI 43–101) and the sections of the Technical Report that
I am responsible for have been prepared in compliance with NI 43-101. |
| ● | As of the date of this certificate, to the best of my knowledge, information and belief, the section of the Technical Report that
I am responsible for contain all scientific and technical information that is required to be disclosed to make the technical report not
misleading. |
Signed and dated this 8th day of August, 2022
Neil Brazier, P.Eng.
Principal
WN Brazier Associates Inc.
Certificate
of Qualified Person
I, Rolf Schmitt, P.Geo., do hereby certify:
| ● | I am a Technical Director with ERM Consultants Canada Ltd. with a business address at 1500-1111 West Hastings St., Vancouver, British
Columbia, V6E 2J3. |
| ● | This certificate applies to the technical report entitled “KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study and Preliminary
Economic Assessment, NI 43-101 Technical Report”, with an effective date of August 08, 2022 (the “Technical Report”). |
| ● | I graduated with a Master of Science in Geology from the University of Ottawa in 1993. In addition, I have obtained a Master of Science,
Regional Planning from the University of British Columbia, 1985, and Honours Bachelor of Science, Geology, from the University of British
Columbia in 1977. |
| ● | I am a member in good standing of the Engineers and Geoscientists British Columbia (#19824). |
| ● | I have worked as a geologist, project manager, technical director and senior policy advisor for a total of 44 years since my graduation
from university. Key areas of experience of relevance to the KSM project include: Senior Exploration Geologist, Kidd Creek Mines (northwest
BC), Research Exploration Geochemist (Geological Survey of Canada), Senior Land Use Geologist and Mineral Policy Specialist (BC Ministry
of Energy, Mines and Petroleum Resources), Technical Director and Project Manager (Rescan and ERM), delivering mine Environmental Assessment
Projects in BC, permitting major mines in BC and undertaking mine ESG Due Diligence assignments across Canada and internationally as NI
43-101 QP. I have worked on multiple mine assignments through all phases of life-of-mine as part of owners’ exploration/ engineering/
environmental teams and as a senior strategic advisor. |
| ● | I am a “Qualified Person” for purposes of National Instrument 43-101 (NI 43-101) for those sections of the Technical Report
that I am responsible for preparing. |
| ● | My most recent personal inspection of the KSM property was on July 12, 2019. |
| ● | I am responsible for Sections 1.10, 20.0, 24.20, 26.2.4 (water balance, temporary water treatment plants, and geochemistry database)
and 27.0 (only references from sections for which I am responsible) of the Technical Report. |
| ● | I am independent of Seabridge Gold Inc. as Independence is defined by Section 1.5 of NI 43-101. |
| ● | I have had involvement with the KSM property that is the subject of the Technical Report, in acting as a Qualified Person for the
“2020 KSM (Kerr-Sulphurets-Mitchell) Prefeasibility Study Update” dated April 30, 2020. |
| ● | I have read NI 43-101 Standards of Disclosure for Mineral Projects (NI 43–101) and the sections of the Technical Report that
I am responsible for have been prepared in compliance with NI 43-101. |
| ● | As of the date of this certificate, to the best of my knowledge, information and belief, the section of the Technical Report that
I am responsible for contain all scientific and technical information that is required to be disclosed to make the technical report not
misleading. |
Signed and dated this 8th day of August, 2022
Rolf Schmidt, P.Geo.
Division Managing Director, Canada
ERM Consultants Canada Ltd.
