$20-million expansion for Quinsam

Toronto-based contractor Hillsborough Resources (TSE), which has already an equity stake in a producing zinc mine, is moving to take advantage of rising demand for coal in the Far East.

At the company’s recent annual meeting, President George Vooro said Hillsborough will spend $20 million during the next two years to expand its Quinsam coal mine in British Columbia.

Hillsborough has become sole owner of the 400,000-tonne-per-year operation following its recent merger with Consolidated Brinco.

By constructing a deep-water port close to the Vancouver Island mine site and increasing production to 1.1 million tonnes by 1994, Hillsborough expects to be able to ship coal directly to buyers in Japan.

But Vooro was quick to point out that any expansion will not be undertaken without close attention to the safety of the 100 employees who work at the Campbell River mine.

Because Hillsborough’s Canadian Mine Development (CMD) unit built the access tunnels at Curragh Resources’ (TSE) Westray coal mine where 26 miners were killed by a methane explosion May 9, the accident was clearly on everyone’s minds at the annual meeting. Hillsborough is closely associated with Curragh because of its 20% ownership in Curragh’s Sa Dena Hes zinc-lead mine at Mt. Hundere, Yukon, and the Westray tragedy was observed with a few moments of silence.

Due to the shallow depth of the coal reserves at Quinsam, Vooro said the mine produces minimal amounts of methane gas, 0.6 cubic metres per tonne of mined coal, at 80 metres below surface. The Devco mines in Cape Breton Island, by comparison, release seven cubic metres per tonne of coal at a depth of 500 metres and 10.8 cubic metres per tonne at a depth of 800 metres. Nevertheless, after the meeting, Vooro said he is attempting to hire an independent safety consultant to monitor the Quinsam expansion which is expected to reduce production costs by $5-8 per tonne. He said he doesn’t expect CMD to be held liable for the Westray explosion by a Nova Scotia government inquiry into the accident.

While Hillsborough reported first-quarter earnings of $1.1 million or 12 cents a share compared with earnings of $459,000 or 5 cents a share last year, Vooro said he doesn’t expect 1992 to be as good a year for his company as 1991.