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, NB.
Despite operational success, Blue Note says current zinc and lead prices are too low to be profitable.
Zinc hovered around US52¢ per lb. today, a far cry from the peak above US$2 per lb. in late 2006. Meanwhile, lead was about US64.3¢ per lb. today, compared to a high of around US$1.70 per lb. in the fall of 2007.
Mining at Caribou and Restigouche had reached full capacity of 3,000 tonnes per day and exceeded an 83% recovery for zinc and 70% recovery for lead.
But now, Blue Note is getting the processing plant and mine infrastructure ready for shutdown. Only enough staff will be kept on to meet care and maintenance requirements, putting almost all of the 300 employees out of work.
There was a sign of trouble in late August when Blue Note cut $10 million from its budget, lowering capital expenditures to $17.8 million. No information was given on what was cut. A company spokesperson said the cuts were about being frugal.
Blue Note invested about $116 million to revive the Caribou and Restigouche mines. Mining was restarted in July 2007 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.
The low down on recent zinc/lead slow-downs
Strategic Resource Acquisition (SRA) (SRZ-T) is putting its Mid-Tennessee zinc mine complex on care and maintenance (Oct. 2008) because of high costs, low prices and operational problems.
HudBay Minerals‘ (HBM-T) closed its Balmat zinc mine and concentrator in New York because of low prices.
Teck Cominco (TCK-T) closed its Lennard Shelf lead-zinc mine in Western Australia in August due to rising costs, lower prices.
Lundin Mining (LUN-T) 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) plans to cut zinc production at its Golden Grove mine in Australia by 30-40% in 2009 due to low prices
Intec (INL-A) suspended operations at its Hellyer zinc concentrate project due partly blaming high costs and low zinc prices.
Angus & Ross (ANGR-L) delayed construction of its Black Angel mine in Greenland until next year because it was having difficulty getting project financing.
Perilya (PEM-A) will cut zinc production by nearly half because of low prices at its Broken Hill project in Australia.
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)
Be the first to comment on "Blue Note to shut Caribou and Restigouche"