Drilling Progress at the Kuzucukaya Polymetallic Mine in Canada

According to Mining.com, BMC Minerals has intersected high-grade massive sulphide mineralization in drilling at the Krakatoa zone of its Kudz Ze Kayah (KZK) copper-lead-zinc project in Canada's Yukon Territory, while government permitting has also made positive progress.

BMC reported on Monday that the first hole to verify Krakatoa, K26-560, intersected 25.1 meters of mineralization at a depth of 327.5 meters, grading 180 g/mt silver, 9.7% zinc, 1 g/mt gold, 0.3% copper, and 3.4% lead. The Krakatoa zone is adjacent to the ABM main deposit of the KZK project, located approximately 260 kilometers southeast of Whitehorse.

"The K26-560 intersection reinforces our confidence that the Krakatoa zone hosts thick, high-grade mineralization that extends beyond the limits of our current mineral resource estimate," said BMC CEO Michael McClelland in a press release.

"This strengthens our conviction that Krakatoa has sufficient potential to add resources to the mine plan and extend the mine life of the KZK project."

Government Green Light

The company's 20,000-meter drilling program yielded significant results just one week after the Yukon territorial and federal governments announced positive decisions on the development of the KZK project.

In 2020, the Yukon Environmental and Socio-economic Assessment Board recommended approval of the project, and this document carried forward the 2022 and 2024 decisions.

Indigenous Opposition

However, the KZK project now faces opposition from the Kaska Indigenous groups. According to the Canadian Broadcasting Corporation (CBC), last week the RRDC (Ross River Dena Council) expressed disappointment with the government's decision, stating that the project was in the wrong location and should not be allowed to proceed.

In previous objections, the Indigenous peoples claimed that the federal and Yukon governments had not addressed their concerns about the mine's potential impact on wildlife — particularly caribou migration — and the environment.

On April 13, BMC President Steven Michael stated in a release that the government decision allowed the company to continue advancing its permit applications.

"We will continue to work toward our ultimate goal — to build and deliver a successful, long-life project that brings lasting, tangible benefits to the Kaska Nation while creating significant, long-term value for shareholders and all Yukon residents," he said.

BMC plans to obtain a quartz mining license and a water license, and hopes to make a final investment decision on the project by the end of 2027.

Confirming Historical Grades

Hole K26-560 at the Krakatoa zone was drilled between two holes completed in 2016, both of which intersected similar grades. Hole K16-369 intersected 8 meters of mineralization at a depth of 385 meters, grading 102 g/mt silver, 12.2% zinc, 0.8 g/mt gold, 1.5% copper, and 0.5% lead. Hole K16-363 intersected 20.8 meters of mineralization at a depth of 323.2 meters, grading 218 g/mt silver, 8.6% zinc, 2 g/mt gold, 0.3% copper, and 3.7% lead.

Although the Krakatoa zone is not included in the KZK reserves, the 2025 indicated mineral resource totaled 18.3 million mt grading 148 g/mt silver, 6.3% zinc, 1.4 g/mt gold, 0.9% copper, and 1.9% lead, representing 87 million ounces of silver, 1.1 million mt of zinc, 827,000 ounces of gold, 164,000 mt of copper, and 346,000 mt of lead; the inferred mineral resource totaled 800,000 mt grading 143 g/mt silver, 7.2% zinc, 1.2 g/mt gold, 1% copper, and 1.7% lead, representing 4 million ounces of silver, 58,000 mt of zinc, 30,000 ounces of gold, 8,000 mt of copper, and 13,000 mt of lead.

Probable Reserves

Based on the 2023 estimate, the ABM deposit had probable reserves of 15.7 million mt grading 138 g/mt silver, 5.8% zinc, 1.3 g/mt gold, 0.9% copper, and 1.7% lead, representing 70 million ounces of silver, 915,000 mt of zinc, 666,000 ounces of gold, 136,000 mt of copper, and 266,000 mt of lead.

KZK could rank among the largest zinc mines in the Yukon. While Fireweed Metals' Macpass project has a larger resource base with an indicated mineral resource of 56 million mt grading 5.49% zinc, representing 6.7 billion pounds of zinc, the KZK project is more advanced.

A 2023 feasibility study showed the KZK project had a net present value of $835 million (at a 7% discount rate), a pre-tax internal rate of return of 42%, and a mine life of 9 years. The pre-production capital cost for this open-pit project was $492 million, with a payback period of two years. This study was based solely on the reserve estimate of the ABM deposit.