Base metals mine in Northwestern Quebec gets cash injection

MONTREAL - Anglo-Swiss mining giant Xstrata PLC, and partner Donner Metals Ltd., of Vancouver, said Friday they will invest $158 million to develop the Bracemac-Mcleod base metals mine at Matagami in Northwestern Quebec.

The mine will have annual capacity of 80,000 tonnes of zinc and 10,000 tonnes of copper and start-up is due in 2013. It will replace production from another Xstrata mine that is running out of reserves.

Bracemac-Mcleod is a high-return project that will provide feed for the Matagami concentrator, said Xstrata.

It will provide 250 permanent jobs and new opportunities for the workforce at the Perseverance mine when it closes.

Xstrata will hold a 60 per cent stake in the joint-venture project after spending up to $20 million mainly for a feasibility study being done by Montreal engineers Genivar Inc. Donner will hold the balance. Bracemac-McLeod's indicated reserves are 3.6 million tonnes of ore containing zinc, copper, silver and gold values.

Xstrata, a global mining and metals group, is best known for its nickel assets in Eastern Canada. It owns the Raglan nickel mine in Northern Quebec, the former Falconbridge nickel mines in Ontario and a minority stake in the Valleyfield zinc refinery near Montreal.