With rumours circulating in the community that the parent company has decided to shutter the nickel-copper project until global metal prices improve, word comes from KGHM that everything is progressing, just at a “reduced pace.”
“This is not a care and maintenance situation,” replied spokeswoman Galina Meleger in an email from Vancouver. “Due to the current macroeconomic situation, the management board of KGHM Polska Mied? S.A. has modified the adopted schedule for the project. The project will continue to advance, however at a slower pace.”
KGHM did not clarify what a “reduced pace” of activity means, nor gave specifics on any revised development timelines or when the mine will enter commercial production. The company is not disclosing its project operating budget for 2016.
The company also did not say how many workers remain on the Worthington site, west of Sudbury, and what work might be furloughed for this year.
“Development activities will continue to progress to ensure that the project is ready to commence construction when the market conditions for base metals improve,” said Meleger.
Meleger said the project team continues working with the City of Greater Sudbury and (Quadra) FNX on upgrading the roads leading into the site, consulting with area First Nations, and filling out all the necessary regulatory and permitting documents, including submitting a mine closure plan to the Ministry of Northern Development and Mines.
As it was eliminating 20 workers and a handful of contractors at last March, KGHM said it was revising the project schedule of Victoria. Shaft sinking was supposed to start this year, pending approval by the parent company.
Two years ago, KGHM said Victoria was on pace to start commercial production in 2019, until depressed metal prices resulted in the slow-down in development.
Last year, Meleger wrote, some preparatory work was done for the mine’s surface infrastructure and construction of a transformer station was completed.
In addition, some exploration work was carried out to expand the mineral potential for the current orebody. Two drill holes, sunk to a depth of 2,200 metres, yielded some “positive results” in the core samples.
Heralded as Sudbury’s next great mine, the Victoria deposit contains 14.5 million inferred tonnes with a grade of 2.5 per cent copper, 2.5 per cent nickel and 7.6 grams per tonne of precious metals.
KGHM Polska Miedz acquired the Victoria Project when it purchased Quadra FNX in December 2011 for $3.3 billion.
The past producer’s history dates back to 1886 when copper and nickel sulphide mineralization was first discovered on the property. The former Inco sold Victoria and four other non-core assets to FNX Mining, who subsequently discovered of a new ore zone south of the historic Victoria Mine in 2011.
Last October, KGHM put McCreedy West mine on care and maintenance, and laid off 25, plus more than 15 at the Morrison project.