British Columbia regulators have granted TSX-listed Centerra Gold approval to pump additional water – although limited volumes – for its Mount Milligan mine.
The approvals, which were received earlier than anticipated, allow Centerra to pump from groundwater wells within Mount Milligan’s tailings storage facility (TSF) and from from a single groundwater well outside of the TSF for the entire life-of-mine, as well as pump up to 15% of the base flow from Philip Lake 1 until November 15. An application to further extend the pumping from Philip Lake 1 for the winter period is currently under review as planned.
On August 1, Centerra warned that its 2018 gold production guidance would be reduced by 20 000 oz and its copper forecast by about five-million pounds if the mine continued to suffer from limited water supply, forcing it to operate on only one ball mill. However, the miner said on Friday that the mill had been operating both ball mill circuits during the third quarter, without providing an update on its production expectations for the year.
The firm said that, should there be delays in securing regulatory approvals for medium to long term sources, it could have a significant impact on the mine’s production and future cash flows.
Centerra reported that it was preparing applications for certain additional or extended water sources until 2020. These include access to groundwater wells outside the TSF for the entire life-of-mine, as well as to Philip Lake 1 and Rainbow Creek at withdrawal rates that are protective of environment.
Approvals to access these sources could be granted as early as December.
The company is working on a long-term solution to its water needs at Mount Milligan. Formal applications and a government review of its methodology will start later this with an expectation that the long-term water sources will be available from 2020.
The Mount Milligan mine’s shortage of water was exacerbated by minimal inflow from snow melt and dry conditions this year.