Snow Lake is fast becoming the front and center of Manitoba's Mineral Industry and far beyond. This can only bode well for VMS Ventures and shareholders.
Good things come in pairs... and truly great things come in threes! The people of Snow Lake know this to be true and have witnessed the fruit of this old adage over the last several months. The community has rebounded, seemingly overnight, from an isolated and forlorn settlement adrift in uncertainty, to the revitalized hub of Manitoba's mineral industry. Although a golden and base metal promise has been dangling over the collective head of Snow Lake for a number of years, it appears once the wheels of industry finally began to move, fulfillment arrived swiftly.
The first pillar in Snow Lake's triad of renewal came with HudBay Minerals' October 8th announcement confirming an $85 million expenditure to fund Phase 1 of their Lalor Project, 16.2 km from Snow Lake. With this investment, the deposit will be accessed by a production ramp from HudBay's Chisel North mine. The ramp is expected to provide early production of Lalor's zinc orebody and an access point for further underground exploration of the property's gold zones. The release stated that the work was expected to begin immediately.
The second post in the trilogy materialized on October 20th when Alexis Minerals Corporation reached an amicable deal to acquire Garson Gold Corporation in a share swap deal valued at $33.2 million. The acquisition solidified Alexis Mineral's holdings nationally, by adding the New Britannia Mine in Snow Lake to their holdings in the Rouyn-Noranda and Val d'Or areas of Quebec. Alexis officials noted that a production decision on Snow Lake's #3 Zone will be made at the end of the 2nd quarter of 2010 and a further decision will be made on the New Brit' mine at the outset of the 4th quarter of 2010. Subsequently, production could be achieved on #3 Zone at the beginning of 2011 and in the main mine by mid 2011. The New Brit' Mine employed close to 250 people during its last existence. Estimates by some in the know say that could very well happen again.
Finally, the third and last support in the trinity arrived in the early hours of Wednesday, October 30th. HudBay made an announcement that many in Snow Lake had hoped and prayed for over the previous 10 months. It was for some, closing notice that lives placed in turmoil for not quite a year could begin to take back some semblance of the normality they previously held. Yes, HudBay advised that they will immediately begin the process of re-starting operations at their Chisel North mine and Stall Lake concentrator, both situated near Snow Lake. They expect that in doing so, full production will be achieved in the second quarter of 2010. They say that this resumption of operations is expected to provide approximately 30,000 tonnes of zinc concentrate feed to the company's Flin Flon zinc plant annually and that the capital costs for the re-start will approach $7 million. Operating costs are expected to be comparable to what they were prior to the suspension of operations in January 2009.
The company also announced that it has sold forward approximately 50% of the anticipated zinc production from the Chisel North mine at an average price of approximately US$1.01 per pound. This hedge is intended to ensure that Chisel North remains economic at lower zinc prices, while providing an unencumbered upside for the remaining 50% of the mine's zinc production.
For those in Snow Lake, 2009 has been a whirlwind year that has seen residents experience both ends of the mining spectrum. The expectation is that 2010 will bring stability for all, prosperity for many, and a positive culmination to a decade of unbridled hope. MJ Written by Marc Jackson.
Page 4 THE Underground PRESS November 12, 2009
See Chisel on page 4...
