Idaho Cobalt Mine, United States of America


Mining at Formation Metal's mine

The Idaho primary cobalt mine development project is owned by Canada-based Formation Metals. The project will develop, operate and reclaim the Idaho cobalt mine, an undeveloped site situated in east-central Idaho, in the US. The mine will be developed into an 800t/d operation. Construction began in February 2010.

Production is expected to begin in the last quarter of 2012. When operational, the mine will annually produce 1,525t of high purity and super-alloy-grade cobalt. Production will equal 3.3% of global cobalt supply.

Mine development

"The Idaho cobalt mine project will develop, operate and reclaim the Idaho cobalt mine, an undeveloped site situated in Idaho, US."

A three-phased mine development programme will oversee the construction of the processing and ancillary facilities. Phase I construction involved timber clearing works for the soil stock pile area, new and existing roads around the mine site, concentrator pads and a tailings and waste rock storage facility (TWSF). The phase was completed in April 2010.

The second phase of construction began in mid-June 2011. In this phase the mine is being developed to produce 400t/d. This phase includes construction of the mill and ancillary facilities. The ram mine portal, hydrometallurgical facility, tram, mill, water management pond, roads, borrow areas and a soil stockpile area are also to be constructed.

Mill and ancillary facilities are being built on Big Flat, an area between Big Deer Creek and Little Deer Creek. The mill is comprised a hard ore storage area, a fine ore conveyor, a ball mill grinding circuit, flotation cells, an analytical laboratory, pipelines, dewatering equipment, a water treatment facility and a shipping dock. Ancillary facilities include power cables, fuel storage tanks, water drainage, warehouse and maintenance plants, administration offices, change house and domestic water disposal.

Phase II was originally scheduled to begin in the second quarter of 2010. Pending funding for the construction, it was postponed to the second quarter of 2011. Development of the mine at depths below the water table will be carried out in the third phase.

Geology

The project area lies within the Idaho cobalt belt which is hosted within the Proterozoic Yellowjacket Formation. The belt is a strata-bound copper and cobalt complex.

Reserves

The project consists of 2.636mt of diluted, proven and probable reserves. Reserves are graded at 0.559% cobalt, 0.596% copper and 0.014oz per ton of gold. The assumed cut off grade stands at 0.2% cobalt. In addition, inferred resources are estimated at 1.122mt graded at 0.585% cobalt, 0.794% copper and 0.017oz per ton of gold. This includes contained metals equivalent to 42.6 million pounds of cobalt, 49.1 million pounds of copper and 56,000oz of gold.

Production and mining at the cobalt mine

At full capacity, the project will produce 800t/d. Annual processing capacity will be 280,000t of cobalt-copper-gold bearing ore. An estimated 2.9 million pounds of cobalt, 2.6 million pounds of copper and 3400oz of gold will be produced annually over the life of the mine.

"The Idaho cobalt mine lies in the Idaho cobalt belt within the Proterozoic Yellowjacket Formation."

Ore will be mined using underground mining methods. Two ventilation shafts will be installed in the process. Post extraction, ore will be conveyed to the mill located at Big Flat.

An overhead tram will stockpile the ram ore and waste rock at 1,000ft height from the portal to the mill. At peak capacity, nearly 32t of dry concentrate and 768t of dry tailings will be processed at the mill each day. The concentrate will be hauled to a processing facility, located off site.

Ore from the project will be processed at the Big Creek Hydrometallurgical Complex, which will also include a new processing facility. Full-time pilot tests are currently being conducted at the hydrometallurgical complex to ensure a seamless start-up and identify minor issues, if any.

Financial backing for the mine project

The company was allocated up to $92.1m tax exempt bonds by the State of Idaho in 2010. The bonds include up to $46.7m in recovery zone facility bonds and $45.4m in solid waste bonds. By March 2011, the company raised $80m in equity funds to be used towards the construction of the mine.

Contractors including JDS Energy & Mining and Dahle

The engineering, procurement and construction management services for the project will be provided by JDS Energy & Mining. A letter of intent was signed between the companies in January 2011. Power for the mining operations will be supplied by Noranda Mining and Intalco Aluminium Corporation.

The construction contract was awarded to Dahle Construction. Geotechnical core drilling, completed in December 2011, was carried out by A&K Drilling.

Environmental impact of Idaho's mine

The mine will be operated with minimal environmental impact. Low impact methods including careful disposal of waste rock and tailings will be adopted to protect water quality. The TWSF and water management pond was designed using data from a geochemical testing programme that was conducted by Formation Metals to describe waste rock and tailings characteristics.

The TWSF will be equipped with a composite underliner built above a prepared subgrade. It will consist of a low permeability soil layer below a synthetic liner.

Water infiltrating the tailings and waste rock will be collected in a drainage collection system built above this liner. An adjacent area within the plant will collect the waste rock and tailings. Half of the tailings will be used as backfill underground, while the left over will be disposed off in the TWSF through dry stacking method that avoids the need of a dam.