BALMAT The zinc mine could reopen ushering in 200 jobs late in 2013 if a sale from Hudbay Minerals Inc. to Wildcat Zinc goes through.
The sale could be complete by the end of August, Wildcat Zinc Chief Executive Officer Michael L. Hoffman said. After the closing, Wildcat Zinc, a venture of two Canadian companies OMT Inc. and New York Zinc would complete a feasibility study on reopening the mine, which was closed by HudBay in 2008.
We wouldnt be purchasing it without the hope of reopening it, Mr. Hoffman said.
The reopening could coincide with an expected rise in the price of zinc presently at 83 cents per pound because of expected shutdowns of large zinc producers and a decline in the global supply, Mr. Hoffman said.
Ideally, it would go above one dollar, he said.
Local exploration will continue.
We still believe theres a lot of zinc to be mined, Mr. Hoffman said.
On April 22, OMT Inc. and New York Zinc signed a letter of intent for a business amalgamation under which New York Zinc would acquire St. Lawrence Zinc from Hudbay for $14 million. The money would be payable as $4 million at closing; $5 million when a positive decision is made to take the Balmat mine into commercial production and $5 million when production begins.
It looks like weve got the financing arranged, Mr. Hoffman said.
The transaction would include a 3,300-foot-deep shaft, underground development of three ore zones, mining equipment, a 5,000-ton-per-day concentrator and approximately 52,000 acres of exploration land in St. Lawrence County.
At closing, OMT will change its name to Wildcat Zinc Corp. The name was picked to connect with Gouverneur Central School, which is home of the wildcats, Mr. Hoffman said.
One of the advantages of the Balmat operation is that HudBay left in place its site managers, who will be a key part of any restart.
We think that was one of the real assets, Mr. Hoffman said.
The potential for reopening would help the region, St. Lawrence County Industrial Development Agency Executive Director Patrick J. Kelly said.
When the mines are able to operate, it provides a much needed boost for the southern part of the county, he said.
The reopening could help other aspects of the countys economy as well.
Representatives of the Ogdensburg Bridge and Port Authority have recommended the Port of Ogdensburg as a transit point for material mined from the site, said John A. Rishe, OBPA director of commercial and industrial development.
We have given them a quote to load zinc concentrate onto vessels in light of news reports that the operation is being purchased, Mr. Rishe said.
Wildcat Zincs goal is to use the Balmat mine as a springboard to acquire other zinc assets.
The Balmat mine represents a rare opportunity for investors to own a fully permitted near-term zinc producer in a mining-friendly district with a full geological and operating team in place, Mr. Hoffman said in a statement. The proposed board of directors and management team for Wildcat Zinc has significant experience developing and operating zinc and other base metal mines, and expects to actively grow Wildcat Zinc into an emerging zinc producer.
Mr. Hoffman has more than 30 years of mine management experience and has held executive positions with Yamana Gold Inc., Desert Sun Mining, Goldcorp Inc. and Crocodile Gold Corp.
Hudbay decided to sell its Balmat operation so it could focus on three other projects, two in Manitoba and one in Peru, that are larger scale and have the potential to return more to the companys investors, said John Vincic, vice president for investor relations and corporate communications.
Strategically, it makes sense for us, he said.
Times Staff Writer Christopher Robbins contributed to this report.