Secretariat won the Triple Crown that year, NASA launched Skylab and Watergate intensified.
It was 1973, the same year Esso Minerals and Cuvier Mines began developing the Gays River underground zinc and lead project in Nova Scotia, 60 km northeast of Halifax.
The Gays River mill began processing 900 tonnes per day in 1979 before underground flooding hampered mining for the joint venture and subsequent owners. Seabright Resources increased mill capacity to 1,500 tonnes per day in the mid-1980s. Flooding and costs prompted Western Mining to stop operations in 1991.
![](https://www.northernminer.com/wp-content/uploads/2022/11/EDM-Scotia-Mine-project-Oct.-2022-300x225.jpg)
The Scotia Mine. Colin McClelland photo
The province granted open-pit approval in 2000 to Pasminco before more ownership changes without output. Acadian Mining expanded the mill to process 2,500 tonnes per day and mined the pit from 2007 until 2009 when it put the mine, then called ScoZinc, on care and maintenance.
The open-pit operation suffered a combination of problems. The financial crisis knocked metals prices lower while inadequate power supplies and poor crushing jammed the mill and raised operating costs, Jason Baker, who worked for Acadian at the time, said in an interview at the site this week. The company also over-handled the ore and product by multiple dumping and hauling instead of a more seamless process, he said.
“Acadian was trying to push too much ore — like 3,000 tonnes a day — through the mill,” Baker said. “They wanted to increase production because the zinc price was falling but they didn’t have the power and the proper crushing so there were a lot of outages.”
Now called Scotia Mine
Selwyn Resources bought the project in 2011 for $10 million, minus $2.5 million for an environmental bond. Then Selwyn changed its management and name in 2019 to EDM Resources (TSXV: EDM). It called the site Scotia Mine.
Now, EDM wants to restart the open pit mine and increase mill capacity to 2,700 tonnes per day, which, according to an updated prefeasibility study completed in November 2021, will cost an estimated $30.6 million.
The updated PFS outlined a 14.3-year mine life producing about 1 million tonnes of zinc-equivalent per year at an all-in sustaining cost of US52¢ per lb. zinc-equivalent. Total operating costs were forecast to run to $52.56 per tonne milled.
The study used base case metal prices of US$1.22 per lb. zinc and US$1.04 per lead, and estimated the project would deliver an after-tax net present value of $128 million at a discount rate of 8% and an after-tax internal rate of return of 65%.
EDM updated the zinc and lead resources in December 2019, increasing the measured and indicated tonnage by 105% and the inferred by 7%. The resource now stands at 25.45 million tonnes grading 1.89% zinc and 0.99% lead (2.84% zinc-equivalent) and 5.01 million inferred tonnes grading 1.50% zinc and 0.66% lead (2.13% zinc-equivalent).
In March 2021, the company updated the resource estimate to include a gypsum resource for the first time of 5.18 million measured and indicated tonnes grading 91.8% gypsum and 790,000 inferred tonnes grading 91.2% gypsum.
The project has proven and probable reserves of 13.66 million tonnes grading 2.03% zinc and 1.1% lead for 35 million lb. of contained zinc and 15 million lb. of contained lead.
Taylor Combaluzier, an analyst with Toronto-based Red Cloud Securities, doesn’t cover the company, but has it on his watchlist after visiting the site in October.
“The recently completed and significantly improved mineral resource estimate and updated PFS, the large amount of infrastructure already in place and resultant modest capex requirements, along with its recent debt financing to get the Scotia Mine into production should warrant attention from investors,” Combaluzier said in an email.
“With several zinc-lead mines coming offline and meager mine supply growth projected in the coming years, the re-start of the Scotia Mine could potentially help meet the demand for those commodities.
Off-take agreement
In June, Geneva-based metals trader IXM, a unit of China’s CMOC Group, signed agreements to loan US$24 million to EDM for the project and to buy all the project’s zinc and lead production for the first 10 years.
Other investors include Fan Camp Exploration (TSXV: FNC), an explorer with projects across Ontario and Quebec, which holds about 14% of EDM. Board members and management hold some 30%, according to the company.
EDM is betting its zinc price forecast of as much as US$1.40 per lb. in the next two years and limited costs to re-start the past producing mine will mean wide margins. (At press time zinc was US$1.24 per lb. and lead US90¢ per pound.)
“When you have this huge mill that’s been built you have to take advantage of it,” EDM chief executive officer Mark Haywood said on a recent tour after running through modernizing plans. “If you line up those things then we can create enormous value for the stakeholders.”
Haywood, a veteran mining engineer who’s worked at BHP’s (NYSE: BHP; LSE: BHP; ASX: BHP) Morinbah North coal mine, and for Goldfields (NYSE: GFI) in Ghana and IAMGOLD (TSX: IMG; NYSE: IAG) in Burkina Faso, said he’s trying to counter inflationary pressures in diesel, reagents and wages by securing better deals on equipment in the mill and the pit.
Haywood’s re-opening plan includes more ore crushing outside the mill building to achieve proper ore size with less waste material and dust entering the mill. He plans to replace a re-grinder with a second ball mill, improve the conventional flotation circuit with automation and replace a kiln dewatering process with a filter press method. EDM will streamline the loading of zinc and lead into sealed shipping containers instead of open dump trucks.
The plant needs a new transformer and 4 megawatts in natural gas backup generators, and the company is considering the installation of solar and wind power on the 664-ha site, Haywood said.
Q4 2023 re-start
Baker, who joined EDM in 2019 as mine manager, stood overlooking the open pit filled with about 50 metres of water and described how stripping back the overburden is to start by the third quarter of 2023 after the delivery of heavy earth-moving machinery. The company is aiming to start commercial production in the fourth quarter of next year, and is awaiting a final permit for sediment and erosion control, which Baker expects to receive before the end of November.
Baker, a local who started his career more than 20 years ago in the coal mines of Pennsylvania, noted that while “there was always the stigma of flooding here with the underground mine, open-pit mining is less of a challenge with water.”
Perimeter wells to monitor and drain water from the pit if needed are to be installed where there were none before. They’ll be inside the ring of birch trees around the property containing the Mississippi Valley-type lead-zinc deposit. It’s in dolomitized limestone that developed on an irregular pre-Carboniferous basement topographic high where coral reefs grew 300 million years ago. The strike runs some 4 km and is about 120 metres deep.
EDM was trading at 66¢ per share on Nov. 3 in Toronto within a 52-week trading range of 75¢ and 44¢, valuing the company at $13.2 million.
“We’re trading at 10% of our net asset value, which is a significant opportunity for investors,” Haywood said.
The year the project first began on the site, 1973, was also when the Montreal Canadiens defeated the Chicago Blackhawks for the Stanley Cup. Haywood, a transplanted Australian, is a Canadiens fan.
“The Habs will be trying hard for the Stanley Cup in 2023,” he said. “EDM will also be pushing the game-changing start of commercial production at the Scotia Mine.”
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