Teck-Corona Hemlo mine showing its potential

Mill throughput at the Teck-Corona mine at Hemlo reached 924 tonnes per day in Teck Corp.’s first quarter, shareholders were told at the annual meeting. This compares with a 556-ton average for the year, noted President Norman Keevil Jr.

Much of the underground development program has been financed from limited production on the upper levels, he added. That development included shaft completion to the 3,800 level and drifting to the west on the 2,400 and 3,400 levels towards the main production area. The sharp increase in throughput was attributable to development mining in this area, he stated.

According to Robert E. Hallbauer, senior vice-president, the company’s strategy has always been to produce from the upper levels while the bottom part was being developed. The No 7 level will be the main production horizon and No 10 will be used for haulage purposes. The delay by Noranda in completing its shaft also put the Teck-Corona project behind schedule because Teck had planned to use that shaft during its development program.

Production from the No 7 level has recently been averaging about 0.4 oz gold per ton although the grade has reached as high as 1.0 oz in specific areas, he pointed out. Millheads have reached around 0.29 oz gold and in the first quarter 23,000 oz was recovered, about 10,000 oz of that in December. “The mine is really starting to show its potential,” he stated. After April the mine should be producing at 1,000 tonnes per day at an average grade of 0.37 oz.

Mr Keevil said the court decision on the Williams property could be in a “few days or weeks.” Assuming the original judgment is upheld, Teck will end up with 50% of the property and International Corona the remainder. Proven and probable reserves on the Williams property total some nine million oz of gold compared with 2.2 million for the Teck-Corona ground. With reserves of more than six million oz each, Mr Keevil said that Teck and Corona would each rank just behind Homestake, with the second largest gold reserve in North America. No review requested

Commenting on reports that Japan would seek reductions in price and volume for coal it receives from Teck’s Bullmoose operation, he said the Japanese have not asked for such a review. There is a clause in the company’s long-term contract with Japan which allows for a price review but the volume side of it is firm, he said. In the past, Teck has agreed to a price reduction in exchange for Japan taking a higher volume.

Teck still has not made much progress in having the Highmont mill incorporated into the Cominco-Lornex Valley Copper development. An apparently bitter Dr Keevil told The Northern Miner that Lornex had breached an earlier agreement they had regarding such a development in the Highland Valley.

Claiming that Lornex was the stumbling block — not Cominco — he added that legal action might be taken if Teck is not allowed to participate. He said Teck agreed to cease such action last year but has not made any progress with Lornex in the interim. He argued that Lornex was holding out for a “fire sale” price on the Highmont plant which would replace Cominco’s aging Bethlehem mill if an agreement was reached.

Regarding last year’s takeover of Cominco, Mr Keevil said that it has too much debt and the carrying costs associated with it. “Our objective is to reduce that debt substantially, in much the same way as Teck did a few years ago, through divestitures and/or the taking in of partners.”