Vancouver – Failing to sell its Gordonsville and Clinch Valley lead-zinc mines, Australian-based Pasminco has decided to close both Tennessee operations.
“The mines are low-grade operations that haven’t provided satisfactory returns on investment,” says Pasminco’s Chief Executive Officer, Greig Gailey.
The Gordonsville mine is slated to close in six months, but if mine management can demonstrate the economic viability of the higher-grade Cumberland ore body, “an operation may continue on a reduced scale.”
No firm date has been given for the Clinch Valley closure.
Pasminco remains in dire financial straits after collapsing under the weight of hedging losses, debt, and low metal prices. Operating under an administrator, the company is aiming to re-list next year under a plan that will see the new creditor owners offer a stake in the company through an initial public offering.
“Consistent with our strategy of focusing the new Pasminco on a portfolio of world class assets and in the absence of an appropriate sale offer, we have decided to shut down those mines,” adds Gailey.
The two mines will continue to supply the Clarksville refinery, and contracts have been put in place to cover the refinery’s requirements beyond the closure of the two mines.
“The Clarksville zinc plant, however, which is among the most productive mid- size zinc plants in the world, will continue to operate and make a major contribution to the restructured Pasminco,” states Gailey.
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