Applying “steelcrete”’
as part of the ground
support at McDame.

McDame
Project

D evelopment of the McDame
project commenced in 1988,
heralding the end of the open pit

era at Cassiar and initiating the
transition to underground mining.

Mining Plan

At present, underground
development is scheduled to be
finished in March, 1990, well
ahead of the completion date
originally projected of October,
1990. The mine is expected to
achieve its full production rate of
5,500 tonnes per day by the end of
that year, making it one of the
largest underground mining
operations in British Columbia.

In order to achieve that high daily
rate, a block caving mining
method will be used. Key
management personnel,
experienced in using this low-cost
technique for mining asbestos have
recently joined the McDame team,
and their expertise will greatly
facilitate our move from open pit to
underground mining operations.

An adit into the side of McDame
Mountain will provide access to
the ore body and a ramp will lead
down to the various mining levels.
Ore from the drawpoints will be
dumped into an ore pass and then
conveyed out of the mine. The
existing tramline will be

shortened, once the open pit
mining is complete, to deliver the
McDame ore to the mill.

Progress Made in 1988
Surface development for the
project started in the second
quarter, while the contract for the
underground work was being
awarded.

Underground work was initiated in
early July. This consisted of
slashing 1,295 metres of the main
access drift, driving 225 metres of
conveyor decline and completing a
48 metre ventilation adit.

In total, $8.6 million was spent on
the project in 1988.

Development Costs

Since many of the existing plant
facilities and services for the open
pit operation will be used by the
McDame project, the capital costs
for its development are
significantly lower than they
would be for a totally new
operation of similar scale.

At present, the total cost of
bringing the new mine into full
production is estimated to be $48.1
million, including $7.8 million for
secondary development during the
preproduction period but excluding
the originally planned secondary
concentrator. Mine access
development is higher than
originally estimated, because more
ground support is projected to be
installed in the main access drifts
and conveyor decline. Mining
during the gradual production
build-up in 1990 will yield 467,000
tonnes of ore, with a fibre value of
$17 million.

Although original plans called for
a secondary concentrator to be
added to the present milling
facilities, modifications which
have improved the rejection rate of
the primary concentrator make
this unnecessary to meet
forecasted production.

A $25 million development loan
from the B.C. Government,
repayable from 50 percent of the
cash flow generated from the
asbestos assets, covers part of the
capital cost of the project. Bank
financing will provide another
$9.6 million. The remainder will
come from cash flow internally
generated by Cassiar open pit
operations.

Reserves

The production layout provides for
mining 16 million tonnes of ore,
with a mill yield of 5.6 percent
fibre. These reserves will provide
mill feed for a period of 10 years.
Diamond drilling will be
undertaken this spring to define
additional reserves that were
indicated in a southerly extension
by drilling carried out in 1984.