White Pine North Project (100%)
In July 2021, Highland completed the acquisition of the White Pine North copper project from Copper Range Company, a subsidiary of First Quantum Minerals Ltd.
Mining History
Copper mineralization was first recognized in the early 1850's and various small, short-lived mining operations at White Pine began in 1865. In 1907, Calumet and Hecla Mining Co. began an extensive drilling program that discovered locally high grades of native copper. In 1929 Copper Range Company acquired the property and began multiple drill programs. Large-scale mining began in 1953 using room and pillar techniques that produced from 10,000 to 23,000 tons of ore per day (tpd). Ore was milled, smelted, and later refined at the mine site. The maximum rated mining capacity was 18,500 tpd, but reached 25,000 tpd in the 1970's. The mine closed in 1997, having passed through multiple ownerships in its later years before being acquired by First Quantum Minerals Ltd. in 2013. Production from 1954-1995 was 198,070,985 tons containing 4,529,599,418 pounds of copper for an average grade of 1.17% Cu. The final operating depth of the mine was 760 meters.
Geology and Mineralization
The White Pine copper deposit is located in the Western Upper Peninsula of Michigan on the south side of Lake Superior (Figure WP 1). In terms of tonnage White Pine is considered a first decile sediment-hosted stratiform copper-silver deposit based on USGS Open file report 2003-107, making it a world class deposit in terms of size. The White Pine deposit is geologically similar to deposits in central and Southwestern Africa, the Kupferschiefer deposits in Poland and Germany, the copper-silver deposits of Northwestern Montana, and others. Regionally, White Pine lies on the south flank of the Midcontinent Rift System, a 2,500 km long structure of Precambrian age.
Copper mineralization at White Pine exhibits a strong stratigraphic control, confined to six dark-gray siltstone and shale units in the basal 4.5 meters of the Nonesuch Formation. The Nonesuch Formation is a shallow lakebed sequence of siltstone, mudstone, and sandstone units with a radiometric age (Pb/Pb) of 1.09 billion years. The gray color is due to increased concentrations of carbonaceous material. Disseminated chalcocite that replaced fine-grained pyrite of biogenic origin forms about 90 percent of the ore. Chalcocite is very fine-grained and forms continuous seams parallel to laminations. The deposit does not contain potentially acid-forming pyrite, which not only simplifies beneficiation of copper, but also mitigates the risk of acid-rock drainage. Copper grades decrease upward, and mineralization ends at a thin (5-20 cm) "fringe zone" that contains sharply defined internal zones of copper, lead, and zinc sulfides. The fringe zone cuts across the stratigraphy at shallow angles, indicating that the chalcocite mineralization is of epigenetic origin. The chalcocite mineralization formed during compaction of rift-filling lithologies and their interaction with formation water that leached copper from underlying basalt flows and basaltic material in the underlying Copper Harbor Formation. These fluids deposited copper where they intersected the basal pyritic units in the Nonesuch Formation. Mineralization is remarkably continuous and predictable over distances exceeding 12 km both NS and EW (Figures WP 2 and 3). It is locally offset by faults, but the faulting is mostly younger than the chalcocite. The deposit dips gently to the northeast reaching depths of about one kilometer.
In addition to chalcocite, native copper and native silver were also mined, mostly from the White Pine fault zone in the southwestern portion of the deposit. Native copper forms roughly ten percent of the copper mined to date at White Pine and is thought to have formed as a separate, second mineralizing event perhaps 20 million years younger than the chalcocite. Native copper declines in abundance away from the White Pine fault. Chalcocite and native copper are the only important copper minerals. Locally high silver grades in the Domino unit of the Nonesuch (Figure WP 3 may contain visible native silver.
PEA Highlights
In September 2019, Highland reported the following results of a preliminary economic assessment ("PEA") for the White Pine North Copper Project. The PEA provides a base case assessment of mining the mineral resources of the White Pine North Project. The PEA considers White Pine North as a stand-alone project and utilizes existing infrastructure to minimize initial capital expenditures. The Project is the extension of the historical White Pine mine which operated from 1953 to 1995. The PEA and mineral resource estimate were prepared by G Mining Services Inc. (Link to NI 43-101 report PEA White Pine North Michigan)
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Base case using a copper price of $3.00/lb and a silver price of $16.00/oz
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After-tax internal rate of return (“IRR”) of 16.8%
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After-tax net present value (“NPV”) at 8% of $416 million
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Initial capital expenditures of $457 million, net of pre-production revenue of $56 million
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Life-of-mine (“LOM”) cash costs of $1.40/pound, including royalties
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Indicated mineral resource of 133.4 M tonnes at 1.07% Cu and 14.9 g/t Ag, containing 3.2 billion pounds of copper and 63.8 million ounces of silver.
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Inferred mineral resources of 97.2 M tonnes at 1.03% Cu and 8.7 g/t Ag, containing 2.2 billion pounds of copper and 27.2 million ounces of silver
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Mineral resources included in the mine plan of 121.4 M tonnes @ 0.98% Cu and 11.80 g/t Ag, containing 2.6 billion pounds of copper and 46.1 million ounces of silver
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Mine life of 25 years, including one year of ramp-up, with average annual LOM payable copper production of 89 million pounds and 1.3 million ounces of silver
The reader is advised that a PEA is preliminary in nature and is intended to provide only an initial, high-level review of the Project potential and design options. The PEA mine plan and economic model include numerous assumptions and the use of Inferred resources. Inferred resources are too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves and to be used in an economic analysis except as allowed for in PEA studies. There is no guarantee that Inferred resources can be converted to Indicated or Measured resources, and as such, there is no guarantee the Project economics described herein will be achieved.
Mineral Resources
A Mineral Resource estimate for the White Pine North Project was completed concurrently with the PEA. Database used by GMSI which had been validated by an independent arm’s-length consultant includes 526 drill holes from available historical drilling by CRC and an additional 42 diamond drill holes in HQ and NQ diameter core completed by the Company in 2014 and 2015, totaling 274,914 meters and 15,743 assays.
Total Indicated Mineral Resources of the White Pine North deposit are reported at 133.4 M tonnes grading an average of 1.07% Cu and 14.9 g/t Ag, containing 3.2 billion pounds of copper and 63.8 million ounces of silver using a cut-off grade of 0.9% Cu for the Parting Shale column only. Inferred Mineral Resources are reported at 97.2 M tonnes grading an average of 1.03% Cu and 8.7 g/t Ag, containing 2.2 billion pounds of copper and 27.2 million ounces of silver using a cut-off grade of 0.9% Cu.
Mineral Resource for the Parting Shale Column – White Pine North Deposit
0.9% Cu Cut-off Grade – August 30, 2019
Notes on Mineral Resources:
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Mineral Resources are reported using a copper price of US$ 3.00/lb and a silver price of US$ 16/oz
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A payable rate of 96.5% for copper and 89.3% for silver was assumed.
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Metallurgical recoveries of 88% for copper and 76% of silver were assumed.
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A cut-off grade of 0.9% Cu was used based on an underground “room and pillar” mining scenario
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Operating costs are based on a processing plant located at the White Pine site.
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A flat NSR royalty rate of $0.05/lb Cu payable was applied, which incorporates two royalties on the project (Osisko Gold Royalty and Great Lakes Royalty)
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The Parting Shale Column was modelled using a minimum true thickness of 2 m
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No mining dilution or mining loss was considered for the Mineral Resources
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Mineralized rock bulk density is assumed at 2.7 g/cc
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Classification of Mineral Resources conforms to CIM definitions
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The qualified person for the estimate is Mr. Réjean Sirois, P.Eng., Vice President - Geology and Resource for GMSI. The estimate has an effective date of August 30, 2019
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Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues.
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Parting Shale: Interval defined from the base of the Lower Transition to the top of the Tiger units
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The quantity and grade of reported Inferred Resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred Resources as Indicated or Measured Mineral Resources.