by Greg Klein | September 21, 2016
Liquefied natural gas would be the fuel of choice to electrify two potential northern mines, according to a memorandum of understanding announced September 21. Casino Mining and Selwyn Chihong Mining said the proposed deal with Ferus Natural Gas Fuels would cut costs as well as CO2 emissions.
Through its subsidiary, Western Copper and Gold TSX:WRN has the Casino gold-copper-molybdenum project undergoing environmental assessment. Selwyn Chihong’s Selwyn zinc-lead project currently moves towards pre-feasibility.
The plan would have Ferus build an LNG plant at Fort Nelson, in northeastern British Columbia’s Peace River oil and gas region. Ferus built and operates Canada’s first merchant LNG plant in northwestern Alberta. A related company, Eagle LNG Partners, has an LNG plant under construction in Florida. Ferus stated it provides LNG and compressed natural gas fuelling services including liquefaction, compression, storage and delivery to the oil and gas, mining, marine, rail and power generation sectors.
The plan “may also benefit neighbouring mines, industries and communities currently powered by diesel, by making the LNG more broadly available,” commented Ferus president/CEO Dick Brown.
“Neighbouring” might cover a lot of ground. Casino’s located in west-central Yukon. Selwyn straddles the Yukon/Northwest Territories border.
But for the time being the Coffee gold project, Yukon’s likeliest new mine and located only about 30 kilometres northwest of Casino, sticks to a diesel-fuelled plan. Low diesel costs ruled out “the additional $1.5-million capital expense associated with LNG storage and vaporization,” according to last January’s feasibility study. “If in the future diesel fuel costs increase, significant power generation cost savings may be realized by substituting LNG for diesel.”
Goldcorp TSX:G subsidiary Kaminak Gold hopes to begin Coffee construction in mid-2018.
Backers of the Fort Nelson proposal anticipate two phases of development to be commissioned in 2020 and 2022.