Poor ground conditions, which led to lower-than-expected grades at the Myra Falls mine near Campbell River, B.C., have forced
Ore hoisting will be suspended in mid-December, though the mill will continue at half-capacity, processing waste rock into cycloned mill tailings for use underground as backfill.
While production is suspended, most of the mine’s workforce will be engaged in the rehabilitation of stopes and workings, and in the development of access drifts. Maintenance work is also scheduled.
Consultants have advised Boliden to adopt a new bolting pattern in the workings. Up to now, workings have been secured with cable bolts in the back and reinforcing rods in the ribs; the proposed new bolting pattern will be a tighter 1-metre grid of reinforcing bar, with some wire mesh where needed.
Myra Falls produced 84,000 tonnes of zinc concentrate and 51,000 tonnes of copper concentrate in the first nine months of 1998. Mined grades have fallen below expectations this year as a result of poor ground conditions in the mine’s Gap and Battle zones.
“The main thing is that we were just having a difficult time getting the productivity [and were] hopping around a bit trying to feed the mill,” says Thomas Atkins, vice-president of investor relations. No accidents have resulted from the ground conditions, though there was a near-miss in October that made safety concerns a driving force behind the decision to suspend production. A fatal accident in late October was unrelated to the ground problems.
Suspending production also allows the mine to backfill a number of areas that were open.
The suspension of production means temporary layoffs for about a fifth of Myra Falls’ 450 employees, while the rest of the workforce is assigned to the rehabilitation effort. The budget for the project is US$9.8 million, and Boliden will capitalize US$6.6 million of that sum.
Boliden’s Spanish subsidiary, Boliden Apirsa, now has permission from regulatory authorities in Spain to restart mining at the Los Frailes zinc mine in the province of Sevilla. Production at Los Frailes has been suspended since late April, when a tailings dam failed, allowing solid tailings and decant water to spill over an area of about 26 sq. km.
Applications for permits to restart the mill are being examined by the government, and Boliden expects a decision by the end of the year.
The cleanup of the 8-sq.-km area immediately downstream from the dam, which was Boliden’s responsibility, is complete; about 70% of the solid wastes discharged from the tailings pond settled in that area. The cleanup in the 18-sq.-km area to the south, which is being supervised by the government, is nearly finished. The material is being dumped in the mined-out open pit of Boliden’s Aznalcollar mine.
Revegetation in the areas is scheduled to be completed by mid-November.
Boliden’s Spanish geotechnical consultant, EPTISA, concluded in a report released last September that the dam had failed when a 700-metre section of the structure, together with underlying soil, slid about 60 metres along a bedding plane in a clay bed beneath the earthwork. A Spanish government investigation, presided over by a judge, is in progress.
Boliden reported a net loss of US$15.8 million (US15 cents per share) for the three months ending Sept. 30, compared with earnings of US$27.6 million in the third quarter of 1997. Third-quarter revenue between the two periods declined to US$239.3 million from $313.5 million.
For the nine moths ended Sept. 30, Boliden showed a loss of US$61.5 million on revenue of $794 million. In the corresponding period of 1997, the company posted earnings of US$65 million on revenues of $902.6 million.
Boliden’s working capital at the end of the third quarter was US$87.5 million, including US$57 million in cash and short-term securities. The company has already made a special provision of US$34 million on the books for reclamation costs at Los Frailes.
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