Mineral exploration began in the Thompson Nicola region in the 1880's with the discovery of copper, gold and iron mineralization at the Iron Mask Mine near Kamloops. During this time, several claims were also staked around the Ajax property, with placer miners surveying the area during the early years of the Gold Rush in British Columbia.
Underground exploration began on the Ajax claim in 1906 and continued until 1914 when exploration in the area became sporadic during the First World War. In 1928, the Consolidated Mining and Smelting Company of Canada completed several surface drilling programs on the Ajax property.
The original Afton copper deposit was found by Chester F. Millar in the mid-1960s and was operated as the Afton Mine following Teck's acquisition of Millar's company. Teck operated the Afton mine -- including two satellite pits, Crescent and Pothook -- and the East and West Ajax pits intermittently from 1987 until 1997. During the periods of production, it is estimated that 17 Mt were mined, and 13 Mt were milled.
Abacus acquired holdings in the Ajax area in 2002 from Teck and explored the Ajax property from 2005 to 2010. The Ajax property comprises eight Crown grants including the historic Ajax East and West pits. The Ajax project site is located at the southern extremity of the boundaries of the City of Kamloops and southeast along an existing haul road from the Afton mill, and it includes shop facilities, a tailings area, and water rights which Abacus purchased in 2005 from Teck-Cominco.
On July 31, 2009 Abacus filed a compliant positive preliminary economic analysis (PEA) on the Ajax property, after a series of successful drill programs from 2005-2008, and based upon an initial resource estimate released earlier that same year. The preliminary analysis on Ajax underscored the potential for a robust mining operation.
In May 2010, the Company announced the signing of a significant strategic investment agreement with KGHM Polska Miedz SA ("KGHM") to form a joint venture to advance the Ajax Project through the Bankable Feasibility Study and into production. KGHM is one of the world's largest copper and silver producers. On October 12, 2010 the parties executed the definitive joint venture shareholders' agreement. The property is now 100% owned by KGHM Ajax Mining Inc., a joint venture company owned 80% by KGHM and 20% by Abacus Mining & Exploration Corp.
Also in May 2010, Abacus commissioned an independent Feasibility Study (FS) Technical Report on the Ajax Project prepared in accordance with National Instrument 43-101. The FS was led by Tetra Tech as the project's lead consultant, in conjunction with a team of globally recognized consultants comprising AMEC Americas Limited, Knight Piésold Ltd., Golder Associates Ltd. and BGC Engineering Inc., with test work by G&T Metallurgical Services Ltd. (G&T) and Krupp Polysius. This report was dated January 12, 2012.
On January 13, 2016, Abacus announced a positive Feasibility Study Update superseding the FS of 2012 and incorporating an updated reserve and significantly updated engineering. The updated FS was prepared in accordance with NI 43-101 by a consortium of independent consultants under the direction of M3 Engineering and Technology Corp., a recognized global provider of design and construction services. Several significant changes were introduced to the project scope and layout which yielded positive economic, processing and environmental impacts for the Ajax Project. This report is dated February 19, 2016 and is available in the dropdown menu to the left,
Please also refer to the section on Environmental & Permitting on this website for latest decisions on the Ajax Mine project.
Feasibility Study Update
On February 19, 2016 Feasibility Study Update superseded the Feasibility Study of January 6, 2012 and incorporated an updated reserve and significantly updated engineering. The updated FS was prepared in accordance with NI 43-101 by a consortium of independent consultants under the direction of M3 Engineering and Technology Corp., a recognized global provider of design and construction services. Several significant changes were introduced to the project scope and layout which yielded positive economic, processing and environmental impacts for the Ajax Project.
Highlights (In US$ unless otherwise indicated)
Financial Results using 5% and 8% discount rate with KGHM price deck*
The mine plan incorporates a revised throughput from 60,000 t/d to 65,000 t/d, an updated block model that includes increased geological interpretations, recent drilling results and metallurgical testwork, outcomes of three trade-off studies, and updated economic factors.
The mine plan is based on the extraction of 426 Mt of ore containing 0.29% Cu, 0.19 g/t Au and 0.39 g/t Ag. This compares to the 2012 Feasibility Study of a reported 503 Mt of reserves containing 0.27% copper and 0.17 g/t of gold. Mine life is calculated to be 18 years at an average nominal processing rate of 65,000 t/d and an overall stripping ratio of 2.65:1, waste to ore. Based on the contained metal content of 1.2 Mt (2.7 billion lbs) of copper, 2.6 million oz of gold and 5.3 million oz of silver, average annual production is estimated to be 58,000 tonnes of copper and 125,000 ounces of gold in concentrate.
Initial Capital Expenditures
Capital expenditures, estimated at US$1.307 billion, reflect changes to the general arrangement of the Project whereby the facilities have been moved farther from the Kamloops community, several important technological changes aimed at increasing metals recovery during processing, decreasing operating costs and reducing the environmental impact (e.g. changes in preliminary milling and ore transport systems, technological solutions at the processing plant and in the tailings storage system). The C1 cash cost has been calculated at US$1.37/lb. Mine construction is expected to take 2.5 years.
The LOM mine operations costs were calculated to average $1.50 per tonne mined.
The process operating costs were calculated to average $4.31 per tonne ore.
The NI 43-101 technical report entitled "Ajax Project, NI 43-101 Feasibility Study Update Technical Report" dated February 19, 2016 is available on this website and the Company's filings on Sedar (www.sedar.com). References to the Feasibility Study Update ('FS Update') for purposes of this website have been taken from Abacus press releases dated January 13, 2016 and February 23, 2016, which were accordingly reviewed and approved for scientific, technical, and economic content by the respective Qualified Persons involved in the preparation of the FS Update under the direction of M3 Engineering & Technology Corp.
The Mineral Resource Estimate was generated using drill hole sample assay results and an interpretation of the geologic model. The mineral resource database is a sub-set of the Ajax database and consists of 208,050 metres of drilling in 665 drill holes. The spatial distribution of Au-Ag in relation to Cu shows a reasonably strong correlation among the three metals, allowing Cu-Au-Ag to be grouped in mineralized domains. The Mineral Resource Estimate is summarized as follows:
Mineral Resource Summary - NSR Cut-off of US $7.10/t Ajax Project
Notes: 1. CIM Definitions were followed for Mineral Resources. 2. Mineral resources are estimated at an NSR cut-off of $7.10. 3. Mineral resources are estimated at US$4.00/lb Cu, US$1800/oz Au, and US$26/oz Ag. 4. Inferred blocks were included in generating pit shell. 5. Mineral resources are reported inclusive of mineral reserves. 6. Tonnages and grades are rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding. 7. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
To estimate the mineral reserves, mining and milling parameters along with modifying factors such as mining dilution and mining losses were used. Pit slope design and pit wall depressurization recommendations for the proposed Ajax open pit were incorporated. Mining and processing costs per tonne were estimated and process recoveries were included in the NSR calculation for each of the six common metallurgical zones. The Mineral Reserve Estimate is summarized as follows:
Ajax Project Mineral Reserves Estimate -- NSR Cut-off of US$7.10/t
Notes: 1. CIM Definitions were followed for Mineral Reserves. 2. Mineral Reserves are estimated at an NSR cut-off of $7.10. 3. Mineral Reserves are estimated based on long term metal prices of US$3.21/lb Cu, US$1200/oz. Au, and US$17/oz. Ag. 4. Inferred blocks were included as waste blocks in generating the economic pit shell. 5. Process recoveries for the six common metallurgical zones are included in the NSR estimation. 6. Tonnages and grades are rounded to reflect the accuracy of the estimate, and numbers may not add correctly due to rounding.
In the opinion of the Qualified Persons mentioned in the press releases of January 13, 2016 and February 23, 2016, estimations of mineral resources for the Project conform to industry best practices and meet the requirements of CIM (2010). An economic Lerchs-Grossman (LG) pit shell was used to constrain the estimate and develop a mine design, and appropriate modifying factors were applied to convert Measured and Indicated Mineral Resources to Proven and Probable Mineral Reserves. As well, knowledge of the deposit settings, lithologies, and structural and alteration controls on mineralization is sufficient to support Mineral Resource and Mineral Reserve estimates. The exploration programs completed to date are appropriate to the style of the deposits and prospects within the Project.
In addition, sample collection, preparation, analytical and QA/QC data from the Abacus and KGHM Ajax drilling programs were appropriate and meet industry standards. The QPs consider that a reasonable level of verification has been completed during the audits undertaken in 2008-2009, 2010, 2011 and 2014 by MDA, and that no material issues would have been left unidentified from the audit programs undertaken. The data verification programs undertaken on the data collected from the Project adequately support the geological interpretations, the analytical and database quality, and therefore support the use of the data in mineral resource estimation.
Mr. Keith Dagel, P.E. of M3 Engineering & Technology Corp. reviewed and approved the scientific, technical, and economic information contained in the news releases. For further details on the Ajax Project, NI 43-101 Feasibility Study Update Technical Report, including the list of Qualified Persons involved in its preparation, please refer to the technical report available on this website and the Company's filings on Sedar (www.sedar.com).