Unforeseen ground conditions will put early copper output at the Reed mine below initial estimates, says the head of a company that co-owns the project.
John Roozendaal of VMS Ventures says a delay in ramp construction has left workers mining more ore than expected from a lens that is lower in copper and higher in zinc.
This “will affect our copper output in the early stages of the mine,” Roozendaal told Mining Weekly Online.
In order to reach full production at Reed on schedule, Roozendaal told the website, “the engineers rejigged the mine plan to allow us to take more material from further up” in the deposit.
High-grade
Roozendaal added that higher-grade copper is still within the Reed deposit, but reaching it will take longer than expected.
VMS, a Vancouver-based junior miner, owns 30 per cent of the Reed mine. Hudbay owns the other 70 per cent and is the operator of the project with about 85 employees – the peak workforce – now on site.
Scott Brubacher, director of corporate communications for Hudbay, stressed that the official mine plan at Reed has not changed. “It was ground conditions that were different than expected,” he said in a statement to both The Reminder and Mining Weekly. “Because of the nature of the rock, we started closer to surface than planned.”
Brubacher described the additional zinc being extracted from the mine as “a bonus.”
He said Hudbay has achieved production capacity at Reed slightly ahead of schedule, so the adjustment for ground conditions is no concern.
“Inevitably, grades vary as you work through a deposit,” Brubacher said.
Buy VMS?
Meanwhile, Roozendaal told Mining Weekly that while VMS is not for sale at this time, it would make sense for VMS shareholders as well as Hudbay for the latter company to acquire the former’s 30 per cent stake in Reed.
“I think having a minority-interest partner is not something Hudbay likes – they like to consolidate ownership of their projects,” Roozendaal said.
Asked whether Hudbay is considering buying either VMS’s share of Reed or VMS as a whole, Brubacher gave no indication of such interest.
“While we have equity investments in a number of junior exploration companies, our growth strategy is focused on the exploration and development of properties we already control,” Brubacher said, “as well as other mineral assets we may acquire that fit our strategic criteria.”
Situated about 50 km west of Snow Lake, Reed mine began commercial production on March 31 of this year after months in the pre-production phase.
The milestone came up to three months earlier than expected. And in an era of wild cost overruns in the resource sector, Reed came in about $6 million under budget with a total price tag of roughly $66 million.
But it hasn’t been an easy ride for the mine. The Wilderness Committee, a prominent green group, once demanded the provincial government reject the mine on environmental grounds.
Pukatawagan’s Mathias Colomb Cree Nation argued Reed was illegal because it was to operate on aboriginal territory without permission.
In 2012, VMS was sued by another junior miner, W. Bruce Dunlop Ltd., which wanted VMS to give up its ownership stake in Reed and instead take a far less lucrative net smelter royalty.
In the end, none of the controversies hindered Reed’s development.
