The Reminder is making its archives back to 2003 available on our website. Please note that, due to technical limitations, archive articles are presented without the usual formatting.
The editor of a leading mining publication sees the pending sale of Hudson Bay Mining and Smelting as a positive step for Flin Flon. James Whyte of The Northern Miner newspaper believes Toronto-based junior company Ontzinc Corp. might bring new vigour to the operation after taking over from Anglo American. "The way I would see it is, if a large owner like Anglo wants to go, it's always good to have a buyer," he said from his Toronto office. "And certainly the kind of mines that you have in the Flin Flon camp are not going to make a big impact on the bottom line of a company the size of Anglo. They can make a much bigger impact on the earnings of a small to mid-tier company. "I wouldn't be surprised to find enthusiasm for running this kind of operation to be greater among smaller to mid-tier companies. If I was working for HBMS, that's the kind of company I would want in there." Whyte, who has closely followed the pending sale, was admittedly taken aback by the news that Ontzinc had entered into an agreement to purchase Flin Flon's largest employer for $325 million. See 'A' P.# Con't from P.# "It was a big surprise to see a little junior (company) try this, but these guys seem to be a little junior with big dreams, so in a way it's very much in their character," he said. Whyte called it "pretty unusual" for a small company like Ontzinc to pursue an operation the size of HBMS. "I guess it's a sign of what you can finance these days, that there is money sloshing around for a lot of different things that might have been a little too audacious before," he said. While some residents have expressed concern that Ontzinc may lack the wherewithal to operate HBMS without cutting costs, Whyte does not share that sentiment. "I doubt that, because of the way they're planning to take it over is to have existing management take care of the whole operation end of things," he said. "The difficulties aren't going to lie in the operation end. I think the (possible) difficulties are going to lie in the corporate end ? whether they can come up with the money (for the purchase) at a reasonable cost of capital." There is one reservation Whyte has about the pending ownership change. In a recent editorial, copies of which have been circulating around town, he worries that Ontzinc might not have the money to properly close and clean up the mine when the time comes. In such a scenario, he expects the cost would fall to taxpayers. "It's probably a good time for governments on both sides of the border to look at what their (mine) reclamation requirements are," he said, "to make sure when the transfer does take place, if it does take place, that the company taking over will be sufficiently well-financed to take care of all the liabilities." In his editorial, Whyte wrote that it's "not an exaggerated fear to imagine that a junior company that has raised enough money to buy an operation may not have deep enough pockets after that exercise to fund closure and rehabilitation. "...if the taxpayers are saddled with the expense of a Flin Flon cleanup, it will be the whole Canadian mining industry whose reputation suffers, not just the new owner. The public, and governments, will see the mining industry walking away from a mess."11/23/2004
