Copper Rand gets reprieve

In a move to preserve jobs in the Chibougamau region, the Quebec government and big labour are throwing a lifeline to MSV Resources (MSV-T) and its Copper Rand 5000 project, which seemed to have gone under for the last time during the summer.

Under a preliminary agreement, MSV will team with two Quebec crown corporations — James Bay Development and Soquem — and the Quebec Federation of Labour’s Quebec Solidarity Fund to create a mining company named Copper Rand, which will develop the Copper Rand 5000 copper-gold project.

By contributing its Copper Rand assets, MSV will hold a 40% stake in the new firm, whereas the three remaining partners will each hold 20% in return for investing $5 million apiece.

Up to another $22 million will flow into the new company’s coffers under a term loan provided by provincially owned Investissement Quebec.

Once the deal is closed in early February, the new company will proceed with the deepening of Copper Rand’s shaft 4 to 1,250 from 884 metres and develop a 1.1-km inclined drift to provide access to the deposit from the 1,391-metre level.

In the third year of the project, the drift will be extended to level 5000 at a depth of 1,525 metres.

Capital costs are expected to exceed $40 million over a project life of at least five years. Reserves stand at 2.2 million tonnes grading 1.72% copper and 3.7 grams gold per tonne, and the deposit remains open to the east.

In a 1997 feasibility study of Copper Rand 5000, MSV calculated a rate-of-return of 17.5% based on copper and gold prices of US$1.05 per lb. and US$340 per oz., respectively.

In the intervening years, MSV made several attempts to finance the project, and the mining plan was revised to boost daily production by 400 tonnes to about 1,800 tonnes. Under the new plan, mining would still be conducted by sublevel open-stoping with backfill, yet annual copper production would be roughly 10,000 tonnes. MSV started to wind down the project last summer, when mining equipment was brought to surface and mine workings flooded (T.N.M., July 26-Aug. 2/99). However, pumping was resumed when financing discussions took a turn for the better.