TORONTO (miningweekly.com) – "TSX-listed Liberty Mines, which is 51% owned by China's Jilin Jien Nickel Industry, expects to see a sharp increase in output at its McWatters nickel mine, in Ontario, CEO Gary Nash said on Monday.
Liberty has a second mine, Redstone, and it plans to start construction on a third project in the middle of this year, he said in an interview on the sidelines of the Prospectors and Developers Association of Canada convention, under way this week in Toronto.
The firm shut down its operations in October 2008, because of sharply lower metals prices and tight financial markets, but resumed production and development work in the third quarter of last year at its Redstone and McWatters mines, after markets improved, and with financial assistance from Jilin Jien.
With development work having been completed at McWatters early this year, production should increase “exponentially” going forward, Nash said.
“We're basically going from a 200 t/d operation, very soon we will be up to 1 800 t/d.”
The company's two mines, as well as the Harte development project, are located in the Shaw Dome area, about 25 km south-east of Timmins, in Ontario, and Nash is optimistic about the prospects for ongoing discoveries.
The geology of the area is “very similar” to the Kambalda Dome, in Australia, where more than 50 mines have been found and operated since the mid-1960s, he said.
“Some of them are smaller, but they are very high-grade. Ours seem to be a little bigger, but they are lower grade.”
After the financial crisis hit, Liberty was one of the first Canadian miners to arrange funds from a Chinese company.
The firm completed a $30-million financing in May last year with Jilin Jien, which now owns a controlling stake in Liberty.
“They've also supplied us with some short-term capital in the meantime to finish the development of McWatters, to buy some more mining equipment, which we've done, and to get Redstone into full operation as well,” Nash said.
It's a “misconception” that Chinese companies are difficult to deal with, he commented.
“They are forward looking, they know they need the resources and where there are opportunities, which were created by the commodity crisis, they've actually gone after them,” he said.
“I think it's opened up a lot of doors.”
Liberty expects to have repaid its loans from Jilin Jien by early next year.
Nash said China's ability to dump nickel pig iron into the market will likely continue to cap the nickel price on the upside, while mining companies' operating costs will ensure that $7/lb remains a strong floor for the price.
Nickel was trading at around $10,05/lb on Monday."
|
|
