Engineering & Mining Journal

JUL 2019

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REGIONAL NEWS - U.S. & CANADA 6 E&MJ • JULY 2019 www.e-mj.com Hecla Shuts Hollister Down Hecla Mining Co. announced it is cur- tailing much of the development work in Nevada, closing the Hollister mine and laying off 25% of its workforce in Neva- da. The company said it has taken these actions to reduce spending, consistent with its goal of operating on a cash neu- tral basis, following the heavy investment the company made in Nevada in the first and second quarters. "Hecla has a strong commitment to operate within cash flow as demonstrated by the positive free cash flow over the past three years and longer," said Phillips S. Baker Jr., president and CEO. "However, the Nevada operations have not generated the cash flow we had hoped for, so we are curtailing most development and reducing the workforce with the goal of the opera- tion generating positive cash flow in the second half of the year. We still see lots of opportunities to improve costs, manage water, improve recoveries and explore but only plan to do it within cash flow." With the company-wide reduction in spending, Baker said it believes Hecla will generate sufficient cash flow to nearly eliminate the need to borrow by year-end. After conducting a review of its Nevada operations, Hecla said it has implemented changes with the goal of turning it into a positive cash-flowing unit. The new ap- proach is to mine the currently developed ore at Fire Creek. Mining at Midas is ex- pected to continue through the end of the year, but Hollister will be shut down. As a result, 25% of the Nevada workforce is be- ing laid off. Some surface exploration drill- ing and hydrology studies are still planned to gather information on the deposits to help make future development programs more successful, the company said. Third-party ore processing arrange- ments are also being pursued to try and reduce the transportation and milling costs. This could include mills that can process ore that is considered refracto- ry. With water discharge from Fire Creek more than double from a year ago, work is under way to increase discharge permits and change how the water is treated. Hecla said it is still committed to the exploration and definition of Hatter Gra- ben, which is one of the key reasons the Nevada operations were acquired. The level of development activity, however, is being curtailed to reduce the cash con- sumption, and the focus instead is ex- pected to be on surface drilling. The company revised its annual 2019 Nevada gold production downward from 76,000 ounces (oz) to 60,000 oz at a cost of sales of $105 million, a cash cost after byproduct credits of $1,200/oz gold ounce and an all-in sustaining cost after byproduct credits of $1,700/oz per gold. Hecla said it has purchased put con- tracts on 2.9 million oz of silver and 93,000 oz of gold, which set a floor to the prices for each, locking in $14.73/oz for silver and $1,318/oz for gold for the next four months. More protection may be put in place for the rest of the year and part of next year. RNC Targets Long Mine Life for Dumont Ni-Co Project RNC Minerals has announced results from an updated feasibility study of the Dumont nickel-cobalt project in the Abiti- bi region of Quebec. The study assumes initial production of 33,000 metric tons per year (mt/y) of nickel in concentrate, ramping up to 50,000 mt/y in a Phase II expansion. Life-of-mine production over a 30-year mine life is estimated at about 1.2 million mt of nickel in concentrate. Initial capital expenditures to develop the project are estimated at $1 billion. RNC President and CEO Mark Sel- by said, "The achievement of this major milestone once again confirms the robust economics of the Dumont nickel-cobalt project. Once in production, Dumont will be one of the largest base-metal mines in Canada, one of the top five sulphide nickel producers globally, and one of the only large-scale, fully permitted nickel-co- balt projects that can begin to satisfy the significant growth in nickel and cobalt de- mand driven by the electric vehicle sector. "With the completion of this positive feasibility study, RNC, with our partner Wa- terton, is well-positioned to accelerate dis- cussions with potential partners to advance the Dumont project toward construction." Dumont will be an open-pit mining operation, using conventional drilling and blasting, with loading by a combination of hydraulic excavators and electric rope shovels into trucks ranging in capacity from 45 mt to 290 mt. The process plant will be constructed in two phases. Phase I will have an initial average throughput of 52,500 mt/d using a single SAG mill and two ball mills for grinding, desliming using cyclones, con- ventional flotation, and magnetic separa- tion to produce a nickel concentrate that will also contain cobalt, palladium, and platinum. Phase II throughput will be dou- bled to 105,000 mt/d in the seventh year of operation by mirroring the first line. The Dumont project's proven and probable reserves total a little more than Unable to overcome issues with water, Hecla lays off 25% of its Nevada workforce.

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