Votorantim, El Nino prove up Bathurst

The Bathurst camp in New Brunswick is proving that, after all these years, it still has plenty more to give.

The latest contributor to the region’s mining reputation comes by way of a preliminary economic study on the Murray Brook polymetallic massive sulphide deposit.

The deposit is part of the broader Bathurst project, which is jointly owned by El Nino Ventures (ELN-V), Brazil’s Votorantim Group and Glencore Xstrata (GLEN-L). Votorantim is the operator. 

The Murray Brook study estimates it will cost $261 million to build an open-pit mine and flotation mill that would have a net present value of $96.4 million and a 41.4% internal rate of return, using a 5% discount rate.

A future mill would have a throughput rate of 2 million tonnes per year, or 6,000 tonnes per day over its nine-and-half-year mine life. That rate of production would let it turn out a total of 239,000 tonnes copper concentrate, 122,000 tonnes lead concentrate and 770,000 tonnes zinc concentrate over the mine’s life. Production would come from three concentrates: copper-silver, lead-silver and zinc-silver, with tonnage generating a $1.2-billion net smelter return.

The nearby Belledune smelter would likely process the concentrates further.

The deposit responsible for all of that production, Murray Brook, has measured and indicated resources of 18.6 million tonnes grading 0.42% copper, 0.95% lead, 2.61% zinc, 39.3 grams silver per tonne and 0.51 gram gold per tonne.

Votorantim — Brazil’s second-largest miner — and El Nino have an equal stake in a joint venture on 70% of the project. But Votorantim recently struck a deal with former owners Murray Brook Metals and Murray Brook Resources that lets it earn the remaining 30% interest by spending $6 million over five years on exploration, and by surrendering a 0.25% net smelter return royalty on one year of production.

El Nino is bullish on the property’s exploration upside, with drilling underway at the Camel Back claims, which are adjacent to the Murray Brook deposit.

Murray Brook is 60 km west of the city of Bathurst, with part of the property underlain by the Murray Brook polymetallic massive sulphide deposit.

Discovered in 1956, development didn’t start until Murray Brook Resources got busy in 1989. The mine produced 45,000 oz. gold and 315,000 oz. silver, with an 85% recovery over three years.

Beyond Murray Brook, Votorantim and El Nino are teamed up at the Bathurst Mining Camp project along with Glencore Xstrata. The deal calls for Votorantim to spend $10 million on exploration over five years to earn a 50% interest. It can move up to a 70% stake by spending another $10 million over two years. More drilling and exploration has been planned for 2013.