TVX lets out contract for Olympias project

With a green light from its final feasibility study and permit applications awaiting approval, TVX Gold (TVX-T) has awarded the principal construction management contract for its Olympias mine project in northern Greece.

The winning US$30-million bid came from SNC-Lavalin America, the U.S. subsidiary of SNC Lavalin. The contract covers engineering design and cost estimation, engaging the supply and construction contractors, construction control and general project oversight including environmental and safety management. SNC-Lavalin also gets a contract to build and operate a pilot plant for the project.

To resume production from Olympias, TVX will need a new underground conveyor and decline, a new mill, refurbishments to the existing mill, and a gold recovery plant with bio-oxidation and pressure-oxidiation circuits. Work will begin immediately and production startup is scheduled for early 2002. In all, the Olympias project is expected to incur a capital cost of US$248 million.

The Olympias mine, which has been shut down for almost a decade, has reserves of 11.5 million tonnes grading 6.09% zinc and 4.6% lead, plus 9 grams gold and 138 grams silver per tonne. A final feasibility study, tabled in October, proposed a 1,650-tonne-per-day mine growing to 2,700 tonnes per day by 2007, which would produce about a 250,000 oz. gold and 2.3 million oz. silver annually. The feasibility study showed that the project would yield a 17% internal rate of return at a US$325 gold price net of by-product credits.

TVX submitted an environmental impact study to the Greek government in early November, and approval is expected by the end of the first quarter of 2000.

SNC-Lavalin released a prepared statement that called the contract award a “testimony to SNC-Lavalin’s experience in consulting, engineering and construction of facilities for the treatment of ores and recovery of minerals and metals.”

In a separate development, Hudson Bay Mining & Smelting has awarded the contract for engineering and construction management of its Flin Flon zinc plant to SNC-Lavalin. The operation is being expanded to accommodate new production from the new Triple 7 orebody early in the next decade. HBM&S is replacing its electrolytic tankhouse and modifying other circuits in the plant.

The expansion is expected to cost about $100 million and should be completed in two years. The plant will have an annual capacity of 114,000 tonnes of cast zinc after the expansion.