Is it feasible or isn’t it?
A 2014 study of the McIlvenna Bay deposit was hailed as a milestone in the effort to open another mine in the Flin Flon region.
Foran Mining Corp cited “positive results” from an independent preliminary economic assessment (PEA) of its highly touted ore body, located 90 km from Flin Flon.
While Foran noted those results would not necessarily materialize into anything, the PEA envisioned a 14-year mine life (with the possibility of more) and daily production of 5,000 tonnes of ore.
According to the PEA, most of the mine construction would be expected to take 18 months, with underground mine development adding another six months to the construction schedule.
The PEA pegged capital costs over the life of the proposed mine at $399.1 million. People in the industry tell me this is not an outrageous amount for a 14-year (or more) mine.
Patrick Soares, head of Foran, has said a McIlvenna mine would generate about 240 jobs, excluding construction, with hiring preference given to area First Nations and the Flin Flon area.
Addressing the Flin Flon and District Chamber of Commerce not quite a year ago, Soares said the best-case scenario would see a mine enter production in late 2019.
We haven’t heard much about McIlvenna lately, but that’s understandable as miners and exploration companies wait out the lull in metal prices.
But we do know one thing: Hudbay, in its public statements at least, is not interested in McIlvenna. Company officials have said several times that they do not consider the deposit to be viable for its purposes.
So is McIlvenna feasible or isn’t it? I suppose it’s all in the eye of the beholder – or in this case the investor.
In an industry as frustratingly cyclical as mining, perhaps Hudbay believes the dollars needed to bring McIlvenna online could be better spent on other, higher-margin projects.
Or perhaps there simply isn’t enough conclusive data available on McIlvenna to objectively declare it as a mine-in-waiting. Although a PEA has been completed, an independent feasibility study has not.
Whatever the case, the Vancouver-based Foran certainly believes in McIlvenna and its eventual graduation to development.
In his address to the chamber last year, Soares said the Teck Cominco smelter in Trail, BC, has already indicated it would accept zinc from McIlvenna.
And the copper? He said even if a North American smelter were unavailable, shipping to Japan would be economical.
With the search for the next Flin Flon area mine underway, McIlvenna has unsurprisingly found its way into the provincial election campaign.
Citing past government ownership in mines, independent MLA candidate Clarence Pettersen has openly wondered why the Manitoba and Saskatchewan governments can’t have a stake in McIlvenna.
If that would help McIlvenna reach timely production, most area residents would be supportive. But it might also be asking a lot of taxpayers considering, again, that no feasibility study has been conducted.
Copper and zinc prices are weak, though they have risen since taking a particularly sharp dip in January. Improved prices will eventually come, and when they do, the future of McIlvenna should become clearer.
Local Angle is published on Fridays.
