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.
Despite receiving the go-ahead to build a 170-km all-season road to its Prairie Creek project in Canada’s Northwest Territories in November, NorZinc won’t be able to begin construction this year as planned, forcing the company to reschedule its activities to advance the project.
Work had been slated to begin early this year, but the comment period, final review and issuance of the approved Management Plans for the road extended beyond the period that the road could safely be completed and used before the spring breakup. The company had planned to initially build a winter road, then upgrade it to an all-season road.
NorZinc will instead focus this year on optimizing economics at the zinc-lead-silver project, 500 km west of Yellowknife. Further details will be announced in the weeks to come.
“This past year has been pivotal for NorZinc as the company obtained its last major permit – the all season road permit – for the Prairie Creek Mine.” said Don MacDonald, CEO of NorZinc in a release.
“It is unfortunate that road construction cannot commence this quarter, but during 2019 we identified a series of potential mine enhancements which can now be pursued – particularly important as commodity prices and equity markets have been very unpredictable recently. We are encouraged with the support for the mine from the local communities and various governments, and we believe there are a number of opportunities to create further stakeholder value in 2020 to compensate for the current economic pressures.”
The company has been evaluating how to offset expected increases in capital and operating costs resulting from new requirements and design changes that occurred during the permitting process, as well as from overall cost increases in the Northwest Territories. NorZinc will be looking at the potential for increased reserves, and potentially throughput, at Prairie Creek.
A 2017 feasibility study outlined a 1,600-tonne-per-day operation with a 15-year mine life and a preproduction capital cost of C$279 million. The project has a long history and hosts existing infrastructure, including a 1,000 t/d mill, dating back to the early 1980s.
(This article first appeared in the Canadian Mining Journal)
