Gays River mine, mill up for sale

Westminer Canada has put its Gays River lead-zinc mine and mill in Nova Scotia up for sale following a 2-year attempt to solve water problems at the underground operation.

“It’s a bit small for us,” said James Lalor, president of the wholly owned subsidiary of Western Mining, a senior Australian company. “We think it’s a better fit for somebody smaller.”

Gays River contains minable reserves of 570,000 tons grading 8.4% zinc and 5.1% lead and a preliminary reserve estimate of 2.2 million tons grading 9.4% zinc and 6.1% lead.

The company says Gays River could resume production if further drainage wells and a better pumping system are installed, but would never generate the cash flow required by a large company.

Westminer’s efforts at Gays River are a last-ditch attempt to salvage something positive from the 1987 purchase of Seabright Resources. Without making any site visits, Western Mining agreed to pay $92 million for Seabright, whose main assets included the ill-fated Beaver Dam and Forest Hill gold mines in Nova Scotia. Seabright also owned the Gays River operations which it had bought in 1985 for $3.6 million. The mill was converted to process ore from the two gold deposits.

Within a year of the Seabright purchase, Western Mining had launched a lawsuit against the former directors of Seabright for allegedly exaggerating the company’s gold reserves. The dispute is scheduled to reach the courts this fall.

After converting the mill back to lead-zinc processing, Westminer reopened Gays River in January, 1990. The mine produced 3,200 tons of zinc and 2,185 tons of lead in its first year of production.