Umex ponders its options

Umex closed the low grade copper-nickel producer in 1982. Since then, the mine had remained on a “care and maintenance” status until 1987 when the company began to sell equipment and let the mine flood. Among the various pieces of equipment sold were the mine’s hoist and crushing system.

Although Umex has not made any public announcements regarding future plans for the Thierry mine, it has been quietly studying it options.

“We’ve been looking at some of the higher grade nickel zones with good PGM values in the mine,” said Frederick Felder, vice-president. “We’ve also been examining ways to achieve better recoveries.” He estimates that, under the right conditions, the mine could be brought back into production at a c ost of about $15 million.

During its six years of production, about 25% of the Thierry mine’s revenue came from PGM values. About five million tons of ore was mined before the operation closed in 1982.

According to Umex, there are some eight million tons of reserves in the mine’s developed upper levels, and about the same amount in undeveloped areas below. Potential open pit reserves are estimated at 50-80 million tons. Grades at the Thierry mine averaged about 1.6% copper and 0.2% nickel.

“We’re not in a position to say what our future direction will be, but we have been trying to avoid a fire sale approach to selling our assets,” he said. “We hope that in a couple of months things will be clearer.”

Just last month, Umex’s Belgium-based parent Societe Generale de Belgique announced the restructuring of its nonferrous metals activities. Belgique’s wholly-owned subsidiary, Union Miniere, is reducing its staff to 12 employees from 100 and will move them to Generale de Belgique’s Brussels headquarters. Questions relating to North American subsidiaries have not been addressed, thus leaving the matter still wide open.

Toronto-based Umex says it has been conducting discussions with various potential partners regarding future plans on its Pickle Lake area gold and base metal properties.

Umex spent about $20 million to build infrastructure for the town of Pickle Lake. The company built the town’s sewer system, water tower and many of its residential units. “We still provide about 50% of the tax base for the town,” Felder said.

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