New bedfellows Boliden (BOL-T) and Westmin Resources (WMI-T) have decided to cease perations at the Gibraltar copper mine, in south-central British Columbia, by the end of 1998.
The decision to suspend operations came after Boliden finished an extensive review of Westmin’s operations, assets and profitability. The review determined that the mine is uneconomic in the short-to-medium term because of poor ore grades and low metal prices.
The open-pit mine is situated about 60 km northeast of Williams Lake.
Westmin acquired the mine in October 1996 when it took over the mine’s parent company, Gibraltar Mines, in order to get its hands on the Lomas Bayas and Fortuna de Cobre oxide copper deposits in Chile.
Gibraltar was commissioned in 1972, when it was known as the McLeese Lake copper mine. During 1997, the mine churned out about 33,000 tonnes of copper at a cash production cost of US90 per lb. copper.
At the start of 1997, sulphide reserves at Gibraltar totalled 142.5 million tonnes grading 0.3% copper and 0.009% molybdenum, while oxide reserves were estimated at 3 million tonnes grading 0.27% copper.
Gibraltar employs 278 people, 209 of which are unionized. Westmin states that it will provide a severance package for its employees based on years of service. The plan will include medical benefits, financial and re-employment counselling, as well as relocation subsidies.
Reclamation and post-closure water treatment costs for the mine were included in Boliden’s takeover deal.
In other news, the directors of Westmin declared a regular quarterly dividend of 53 per share on outstanding Class B preferred shares. The dividend will be paid out on Mar. 31 to shareholders on record at the close of business on Mar. 24.
Boliden holds 100% of Westmin’s common shares and plans to redeem all outstanding preferred shares at par on a date yet to be announced.
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