Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Australian company Minquest has put in a bid to buy Yukon Zinc’s Wolverine operations in the southeast of the Canadian province.
Yukon Zinc is on the hook for almost $650 million owed to creditors and after going into receivership in March, was ordered to find investors or sell its assets. The underground mine and plant shut down in January.
MinQuest, based in Brisbane, is eyeing the existing processing and tailings facilities at Wolverine to speed up the development of its own Fyre Lake copper and gold project 28km to the southwest of the mine.
MinQuest’s MD Jeremy Read said in a statement: “If MinQuest is successful in concluding the purchase of the Wolverine zinc mine it will be a transformative event for the Fyre Lake Copper Project, as it will open up the possibility of putting the Kona Mineral Resource into production utilising the existing infrastructure at Wolverine.
“Using the existing infrastructure at Wolverine could decrease the pre-production capital expenditure for putting Fyre Lake into production by as much as CAD$150- 200M, which would substantially improve the economics of the Fyre Lake Copper Project.”
Minquest is working to raise the money it needs to finance the deal and hope to have it concluded “in the very near future”. Read told the CBC “this is a good time to develop the mine because the current economic slump makes everything cheaper”:
“During downturns, you can get access to projects and infrastructure … to do things, build things — it’s a lot cheaper now than it was.”
