Cassiar seeks govt help to develop McDame deposit

British Columbia’s asbestos producer, Cassiar Mining Corp., has decided to proceed with a $38.8-million development of its McDame deposit located near Cassiar, but is seeking government help to finance the project.

The production decision could be called a valiant one considering the battered-and-bruised condition of Canada’s asbestos industry. For example, since 1974 (Canada’s peak production year), the country’s output of asbestos has been cut in half.

The chief cause of this is a dramatic drop in consumption in the U.S. and certain northern European countries, previously the biggest consumers of Canadian asbestos. Those countries have been scared by the Washington, D.C.-based Environmental Protection Agency (epa), which has proposed banning outright the mining and use of asbestos.

The epa says asbestos fibres have been linked with various lung diseases, though a sizeable body of scientific evidence indicates that asbestos use may be controlled safely.

However, Canadian asbestos- mining companies, including Cassiar, have succeeded in revising their marketing strategies in response to the epa threat, according to a spokesman for the Montreal, Que.-based Asbestos Institute. What’s more, markets such as Japan, southeast Asia, Mexico and Brazil continue to import considerable amounts of the mineral, chiefly for use in construction materials.

So, the decision by Cassiar was not entirely unexpected. The company has spent about $12 million on extensive exploration and development of the large underground deposit and the adjacent open pit is scheduled to run out of ore by 199l.

“Because of the present indebtedness of $28 million, which is anticipated to be repaid by 1990, the corporation is precluded from arranging total debt financing for the project from banking sources,” says President Jim O’Rourke. “Accordingly, availability of provincial government support is essential to the implementation of the project.” Discussions are ongoing with a chartered bank and the government with a view to obtaining the required loan.

Plans call for $19.4 million to be spent on underground development, $4.7 million for mine equipment and $14.7 million for surface facilities, including a new secondary concentrator. An additional $4.5 million will be spent on pre-production mining.

The underground operation will be phased in starting in late 1990, building up by mid-1991 to replace the exhausted open pit. The initial mining plan involves extracting 17.6 million tons, using low-cost block caving methods, which takes the project up to the year 2000. Proven and probable reserves are 35.76 million tons grading 5.57%, with drill holes down-dip indicating extension of the deposit. Because of the high quality of fibre in the McDame deposit, fibre value per ton of ore is comparable or better than the open pit deposit.

The mine will be feeding 1.76 million tons of ore to the company’s mill at Cassiar to produce around 99,000 tons per year of fibre. Export sales are forecast to exceed $55 million per year.

It is anticipated the McDame project will create some 490 permanent jobs, in addition to about 100 needed for the construction stage. The mine is the base employer of the 1,300-person town of Cassiar.