Sherritt Gordon to discontinue Ruttan operation

Sherritt Gordon Mines has announced its intention to discontinue operations at its Ruttan mine in Leaf Rapids, Man., in mid-September.

Transfer of ownership of Ruttan Mine to Hudson Bay Mining and Smelting Co. Ltd. has been discussed and Sherritt is optimistic that satisfactory arrangements can be concluded.

Toronto-based Hudson Bay Mining and Smelting has a plant north of Ruttan Lake in Flin Flon, Man., and is thought to be the logical buyer because ore from Ruttan is processed at the company’s Flin Flon smelter.

Should this transfer not occur, Sherritt must prepare for permanent closure to terminate ongoing contractual arrangements.

“For about a year we have been attempting to find a purchaser for the Ruttan Mine,” said President A. R. Latham at the recent annual meeting. “This is a better alternative to shutdown, as it would continue to offer employment to the workers in Ruttan and continue to support the excellent infrastructure which has been created at Leaf Rapids,” he said.

In December 1986, Sherritt announced a write down of remaining assets at the Ruttan mine and provision for future closure costs. Operating cash flow for the first quarter of 1987 was a loss of $137,000. Low metal prices and increasing smelting costs are not expected to support a positive operating cash position for Sherritt in future.

The company is attempting to reduce its $220-million debt by offloading the Ruttan mine, its oil and gas business and its recently opened Sherr-Gold gold mine at Lynn Lake, Man.

Sherritt has been working closely with the Manitoba government, supporting community and industry groups, such as the Northwest Manitoba Development Corporation and the Association of Single Industry towns, to minimize the impact of such a decision.

Hudson Bay Mining President Lloyd Nilsen, has said there is a reasonable chance that his company will buy the Ruttan mine.