Noranda seeks Heath Steele backing

The recent 10-month-long strike at the Brunswick zinc-lead mine near Bathurst, N.B., has forced Noranda (TSE) and 67% owned affiliate Brunswick Mining & Smelting (TSE) to look for help in expanding its nearby Heath Steele operation.

Information packages have already been sent to possible bidders in Europe, Japan and the U.S., and Noranda may be tempted to sell the entire operation if it receives a high enough offer, says Michael McSorley, Noranda’s vice-president of business services.

Held 75% by Noranda and 25% by Brunswick Mining, Heath Steele produced 95,427 tonnes of zinc concentrate and 25,371 tonnes of lead concentrate from the B zone and nearby Stratmat property in 1990.

However, Noranda is planning to spend $16 million to accelerate mine throughput to 3,000 from 2,400 tonnes per day by developing the C zone, one kilometre from the Heath Steele mill.

Noranda was also planning to spend $6 million this year to conduct exploration within the vicinity of the C zone and on other targets on the Heath Steele and Stratmat properties. But, the lengthy strike at the Brunswick mine near Bathurst has reduced the amount of money that Brunswick Mining has available for exploration, and the joint venture has trimmed its 1991 budget to around $4 million.

As a result, cash-conscious Noranda is looking for an additional partner to come into the joint venture and spread the exploration risk, explained Bill Graham, the resource giant’s manager of exploration for Eastern Canada.

As 1.85 million tonnes of 7.6% zinc and 1.5% lead have already been outlined in the C zone, Graham says there is a good chance that more ore can be proven up around the Heath Steele mine.

Starting in September, the joint venture will undertake a phase-one development program involving the dewatering of Heath Steele’s old A pit, and rehabilitation of the ramp connecting the A pit to the new C zone.

Depending on results of phase one, the partners could reach deeper ore in the C zone by rehabilitating the 400-metre No. 4 shaft and installing a new hoisting plant.

Julian Baldry, base metals analyst at Nesbitt Thompson Deacon Inc. in Toronto, expects Noranda to have no trouble finding a company willing to purchase a joint venture interest at Heath Steele.