Having closed its $17-million purchase of the mothballed, underground Beaver Brook antimony mine in central Newfoundland,
Based in Toronto, VVC is headed by President Serge Gauthier and a board consisting of Gauthier, Chairman Jean-Paul Boily, Franois Bilodeau and Lydia Kozich. VVC is also getting technical advice from consultants Watts Griffis & McOuat.
The Beaver Brook mine is on a 14-sq.-km property in the Botwood Basin, 60 km southwest of the regional centre of Gander. A key 1.7-sq.-km portion of the property was converted into a 25-year mining licence in 1996.
The site is accessible by an all-weather gravel road and connected to a 66-kV electrical transmission line.
Today, the Beaver Brook property boasts one of the largest undeveloped antimony deposits in the world, with resources pegged (in December 2002) at 2.1 million tonnes grading 4.38% antimony, in accordance with National Instrument 43-101.
Noranda Exploration and Noront Grubline discovered significant antimony mineralization at Beaver Brook in June 1989, while the two partners were using antimony as an indicator mineral for gold. The companies’ geologists indeed found the yellow metal at the site, but in such uneconomic amounts that the two gold-focused companies soon lost interest and moved on.
Antimony mineralization occurs at Beaver Brook as the sulphide-mineral stibnite (Sb2S3) in narrow, high-grade veins. The veins are in a series of fault breccias, fractures, and stockworks within a near-vertical structural zone that extends 1 km in length and at least 300 metres deep.
The wall rocks, which are barren of stibnite, are metasediments of Ordivician-Silurian age. They consist of siltstone, sandstone, greywacke and graphitic shale.
Between 1994 and 1998, junior Roycefield Resources (now defunct) spent $22 million building a mine and advancing it close to commercial operation by processing 23,000 tonnes of development muck grading 5% antimony. The company completed 25,000 metres of diamond drilling in 177 holes, excavated a 515-metre ramp plus 313 metres of drifts, and built a 450-tonne-per-day mill, as well as office facilities.
The mill flowsheet employed 2-stage crushing and ball milling followed by flotation concentration, concentrate thickening, filtering, and drying.
Mill recoveries during that short period were in the high 80% range versus the 92-93% projected by metallurgical studies, and the cost to produce a tonne of antimony in concentrate was an impressive US$1,213 (C$1,880). Moreover, the concentrate was considered to be of good quality, owing to its low concentrations of arsenic and lead.
Roycefield also built a hydrometallurgical demonstration plant, which produced antimony trioxide. Had a commercial-sized plant been built, it would have cost roughly another $17 million.
(VVC and WGM believe the previous operator’s pursuit of a hydrometallurgical processing option may have met with resistance in the tiny antimony market and contributed to the mine’s quick closure. As a result, VVC has committed itself to producing a concentrate that will be shipped off site.)
For three and half years after the mine shut down, Roycefield met its financial obligations with funds advanced by two major shareholders. However, they finally called in their loans and pushed Roycefield into receivership in early 2002.
Ownership of the Beaver Brook mine then passed to privately held Beaver Brook Resources, which paid the receiver about $4 million for the mine in March 2002. The new owners continued Roycefield’s care-and-maintenance program.
VVC became involved in September 2003, when it struck a deal to acquire the Beaver Brook project for $17 million.
The sale closed in March, with an initial payment of 1.3 million VVC shares, which are subject to re-sale restrictions until May 7 and June 24, 2004. VVC will pay another $167,000 and issue $167,000 worth of shares in six and 12 months.
The $15-million balance is being paid with an unusual loan, whereby VVC will pay interest every six months at the rate of 9% annually but can opt to pay half of the interest in shares. Principal payments will start in September 2005.
A scoping study prepared last year by WGM for VVC envisages the mining of 150,000 tonnes annually to produce roughly 6,200 tonnes per year of antimony in concentrate.
Mining will likely employ variations of longhole open-stoping, and possibly some small-scale open-pit excavation of the central portion of the deposit, where extensive stripping was carried out by Roycefield.
The resumption of mining would create about 60 jobs at the mine site, with personnel likely commuting from the Gander area.
In the scoping study, total operating costs are estimated at C$65 per tonne milled, including C$35 per tonne for mining costs. The study pegged the internal rate of return at 46%, based on an antimony price of US$2,850 per tonne of metal.
Although WGM looked only at mining a 1-million-tonne portion of the resource base to provide for a 7-year mine life, VVC is “reasonably confident” its newly launched, 16,000-metre drilling campaign will upgrade and expand the resource so that a mine life of at least 10 years is feasible.
The company also notes that, because of stibnite’s softness and the resulting drill-core losses in the stibnite veins, mining grades will likely be significantly higher than those indicated from drill-core data (as was the case with Roycefield’s development muck).
At full production, Beaver Brook would produce about 5% of the world’s antimony and rank as North America’s only primary antimony mine.
VVC hopes the operation will benefit both from its proximity to the world’s number-one antimony consumer, the U.S., and from the vastly better political stability of Newfoundland, compared with the countries hosting existing primary antimony mines.
VVC will be able to take advantage of a 7-year provincial tax holiday in Newfoundland, and it may seek financial assistance from both the federal and provincial governments, which are keen on creating jobs in the area. The company will also look at ways to carry forward the project’s past losses.
In the meantime, VVC has budgeted $2.1 million for completing a feasibility study this year, and another $1.4 million will be needed to rehabilitate the surface facilites.
To fund the work, VVC raised $3.2 million in December 2003 through several private placements, the largest of which consisted of 2 million units priced at $1 apiece. A single unit comprised a share plus a warrant to buy another share for $1.30 within a year. There are now 22.6 million VVC shares outstanding, which last traded at $1.15 in a 52-week range of 26-$1.55.
Some of the money raised will be directed toward VVC’s grassroots exploration projects, which include gold in the Botwood Basin and copper-silver in the Jinggu area of China’s Yunnan province, near Southwestern Resource’s high-profile Boka project. WGM is assisting VVC in China.
Antimony market
In metal form, antimony is used chiefly as a hardener of lead in batteries. “Hard lead,” with its 3-9% antimony content, is stronger and more resistant to corrosion than unalloyed lead.
In antimony-trioxide form, antimony is used as a flame retardant in clothing, toys and vehicle seats.
Antimony metal recently sold at about US$2,950 per tonne. In the past two and a half years, prices have rebounded from a decline that began in 1994, when China dramatically ramped-up production.
China continues to dominate world antimony production, accounting for more than 80% of the annual global output of 110,000 tonnes. In second spot is South Africa, followed by Russia, Tajikistan and Kyrgyzstan. However, Chinese output has been significantly reduced in recent years, owing to the catastrophic, accidental flooding of two major antimony mines in Guangxi province, as well as the government’s clampdown on antimony export permits.
In Canada, minor amounts of antimony are recovered from primary concentrates and recycled automotive batteries at two primary lead smelters that produce antimony-lead alloys:
As well, near Montreal, privately held Nova Pb operates a lead-recycling smelter that can recover lead-antimony alloy from old batteries.
Teck Cominco’s Trail facility has already expressed interest in accepting antimony feed from Beaver Brook, but any deal would require that VVC spend $3 million on smelter upgrades at Trail, among other costs.
Apart from Beaver Brook, Canada briefly had another antimony mine in operation in the mid-1990s: the Lake George underground mine in New Brunswick. The owner of Lake George was, and still is, Apocan, a subsidiary of privately held Amspec, a specialty-chemicals firm based in New Jersey, which sells fire retardants containing antimony trioxide.
Lake George operated between 1974 and 1990, during which time concentrate was shipped to the U.K., Belgium, Italy, Japan, Germany and China. Apocan reopened Lake George in November 1996 and began shipping concentrate to China. However, problems with the hoist soon forced a shutdown, and before hoisting could resume, the bottom fell out of the antimony market and Apocan mothballed the mine.
Antimony prices had peaked at US$5,955 per tonne in November 1994 and then declined, with some dramatic fluctuations, to a nadir of US$1,025 per tonne in August 2001.
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