Economic crunch hits Prairie Creek mine
Operations suspended since Sept. 29 due to low lead, zinc prices
April Hudson
Northern News Services
Monday, December 21, 2015
TTHENAAGO/NAHANNI BUTTE
Just weeks after announcing positive results from its underground exploration program in September, Prairie Creek Mine quietly closed its doors, News/North has learned.
Prairie Creek, the Canadian Zinc Corporation-owned mine in Nahanni National Park near Nahanni Butte, has closed for the winter due to economic hardships. - photo courtesy of Canadian Zinc Corporation |
The lead-zinc mine, which has yet to enter production, shut down for the season Sept. 29 and will likely not re-open until at least May or June 2016.
Wilbert Antoine, manager of northern development for mine owner Canadian Zinc, said the shutdown came as a result of an "economic crunch" that has been building up over the past four years.
"This year is very, very unique because on Sept. 29 we shut down ... Normally, seasonally, we get our exploration and all that kind of stuff anywhere from April to the end of November but this year we shut it down early," he said.
"As a team, the Canadian Zinc corporate office in Toronto, Vancouver and Fort Simpson, we're all down to roughly half days, including our technical team and everything."
The price of zinc is currently at about 67 cents per pound - nearly half of what it was a year and a half ago, Antoine said.
"We will be re-opening; it's just a matter of when
the economic crunch
reverses," he said.
The closure comes on the heels of Prairie Creek Mine's exploration drilling program wrapping up.
That program increased the mine's total measured and indicated mineral resources by 32 per cent and included the discovery of a new quartz vein.
On Nov. 13, Canadian Zinc issued a news release on its third-quarter financial report, noting that zinc prices fell 18 per cent during the third quarter of 2015, from 92 cents US per pound to 75 cents. Additionally, zinc warehouse stock levels rose 17 per cent during that period.
Lead prices followed a similar pattern, dropping eight cents in the third quarter.
Likewise, Canadian Zinc's share prices listed on the Toronto Stock Exchange have fallen from a peak of $1.34 CA in 2011 to eight cents, as of Dec. 18.
Regardless, the report states that as of Sept. 30, Canadian Zinc had working capital of $2.7 million and "(expected) it will be able to meet its current commitments and continue its planned 2015 programs."
"The company has sufficient cash and short-term investments to continue as a going concern for the ensuing 12 months," that report adds.
Despite that statement, the company reduced its site programs to a minimum and introduced cost reduction measures, which included reducing staff, corporate salaries and expenses and directors' fees.
For more than a year, Canadian Zinc has been working on opening an all-season road to Prairie Creek Mine.
"Right now, we're going through the environmental assessment for that road," Antoine said.
"Our developer's assessment (was just submitted)."
Antoine travelled to Nahanni Butte this month to engender support for the road project. He said that as a mine worker for the past 45 years, he is convinced Canadian Zinc can bring opportunities to the region.
"There is a sense of pride in what we are trying to achieve here, for the 220 people who are going to be working at the mine (and) the 125 to 130 people in spin-off jobs," he said.
Currently, the application for the all-season road is before the Mackenzie Valley Land and Water Board.
