Infrastructure

Selwyn has during the past several years constructed a road network linking the new airstrip and camp in Don Valley with the shorter airstrip and camp at the XY deposit. The drill road improvements have greatly increased exploration and operational efficiencies. A winter road connects the XY area to the community of Tungsten in the Northwest Territories. This portion of the road needs upgrading with installation of new stream crossings but is otherwise adequate for exploration and development operations.

Aircraft on new air strip in Don Valley

Due to the location of the site, the need for significant new infrastructure is perhaps the major hurdle facing Selwyn Project; with power and concentrate transportation being the main factors. Both of these factors are major components of operating costs.

Remote sites are commonly solely dependent on diesel power for their power needs. Early economic evaluation of Selwyn Project used diesel power as the base case for modeling capital and operating costs. Since then, Selwyn has completed a systematic review of potential nearby hydroelectric sites, both in the Yukon and Northwest Territories, to evaluate their power potential. The addition of hydroelectric power is not seen as completely eliminating the need for diesel power but would replace high cost diesel power with lower cost hydroelectric power. Ideally we would reduce the diesel power requirement to less than 20% of Selwyn Project's total power requirement; perhaps used more as peaking power than base-load power.

Preliminary evaluation indicates attractive run-of-river hydroelectric opportunities that could generate up to 20 megawatts of power on a seasonal basis, minimizing the requirement for diesel power generation. Ongoing studies are now evaluating the feasibility of adding some water storage to extend the availability of power to the winter months. The potential peak power generation capacity from hydroelectric sources is roughly equal to the base-load requirement of the proposed mine-mill facility. The addition of hydroelectric power would provide Selwyn Project an assured supply of reasonable cost power and significant operating cost benefits compared to many other base metal mines that are wholly dependent on diesel power.

Another recent development is the assessment of a concentrate pipeline as an alternative means of transporting concentrates from the site. Like power, the focus has been to look at reducing rather eliminating truck haul of concentrates, particularly for the portion fo the haul that would require significant new road or upgrade of existing roads. The evaluation of the use of concentrate pipelines is therefore both a capital and operating cost tradeoff consideration.

Interest in concentrate pipelines is increasing globally as an alternative to rising transportation costs. A preliminary evaluation of capital and operating costs is in progress following a favourable initial assessment. The concept provides for the pumping of concentrates through an approximate 18 centimetre diameter buried pipe to either the Robert Campbell Highway or North Canol road to a facility where the concentrates would be de-watered and shipped onward by truck to the concentrate shipping facility. Use of a concentrate pipeline to a site on the highway could therefore potentially eliminate the need for a new access road and significantly reduce unit concentrate haulage costs.

Selwyn continues to evaluate the various infrastructure alternatives to determine the optimum development plan for Selwyn Project, taking not only capital and operating costs into consideration but also considering environmental impacts and operational efficiencies.

Don Valley Camp