Blue Note Mining (BN-T, BNMFF-o) is the latest miner to join the care and maintenance club after less than a year of commercial production at its Caribou and Restigouche zinc-lead mines in Bathurst, N. S.
Despite operational success, Blue Note says current zinc and lead prices have rendered the mines unprofitable.
Zinc hovered around US52 per lb. at presstime, a far cry from its peak above US$2 per lb. in late 2006. The price of lead, meanwhile, was at about US64.3 per lb., compared with a high of around US$1.70 per lb. in fall 2007.
Operations had ramped up successfully to full capacity, producing 3,000 tonnes per day, exceeding an 83% recovery for zinc and 70% recovery for lead.
Blue Note is preparing the processing plant and mine infrastructure for shutdown. Only enough staff will be kept on to meet care and maintenance requirements. About 300 people were employed at the mines, though during ramp-up that number was closer to 370.
In late August, Blue Note cut $10 million from its budget, bringing down expenditures to $17.8 million. No information was given on what was cut. The company said it was being frugal.
Blue Note spent about $116 million to revive the Caribou and Restigouche mines. Mining was restarted in July2007 with commercial production declared at the start of 2008. So far this year, the company has produced 80 million lbs. of zinc and 42 million lbs. of lead.
Blue Note has an 80% interest in the mines, while Breakwater Resources (BWR-T, BWLRF-o) holds the remainder.
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The lowdown on the zinc-lead slowdown
Strategic Resource Acquisition Corp. (SRA) (SRZ-T) put its Mid-Tennessee zinc mine complex on care and maintenance in October because of high costs, low prices and operational problems. HudBay Minerals’ (HBM-T, HBMFF-O) shut down its Balmat zinc mine and concentrator in New York in August because of low prices.
Teck (TCK. B-T, TCK-N) closed its Lennard Shelf lead-zinc mine in Western Australia in August due to rising costs and lower prices.
Lundin Mining (LUN-T, LMC-N) has begun a three-year phased shutdown of its Galmoy zinc-lead mine in Ireland. Lundin also paid a US$152.7-million impairment charge on its Aljustrel zinc mine in Portugal in the second quarter. Lundin will make a decision about the mine’s future during the third quarter. OZ Minerals (OZL-A, OZMLF-O) plans to cut zinc production at its Golden Grove mine in Australia by 30-40% in 2009 due to low prices.
Intec (ICLJF-O, INL-A) suspended operations at its Hellyer zinc concentrate project in October, partly blaming high costs and low zinc prices.
Angus & Ross (AGU-L) delayed construction of its Black Angel mine in Greenland until next year because it was having difficulty getting project financing.
Perilya (PEM-A, PYMLF-O) will cut zinc production by nearly half at its Broken Hill project, in Australia, because of low prices.
Aim Resources (AIM-A) scrapped plans to develop the Perkoa zinc mine due to funding problems linked to low zinc prices.
–With files from Reuters.
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