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Delay, delay for KGHM’s Victoria mine project

Sudbury’s next great base metals mine is “advancing,” but at a “reduced pace.

Sudbury’s next great base metals mine is “advancing,” but at a “reduced pace.”

That’s the word coming from Polish mining giant KGHM International on its Victoria Mine project, lauded by many in the Sudbury camp as the next great nickel and base metals mine.

After some layoffs in March, the company issued an April 29 news release with a reassuring tone amid ongoing rumours in the community that the company might be mothballing the project.

“Although the anticipated date of commencement of construction of Victoria has been delayed, this does not impact other necessary and essential activities at Victoria,” said the release. “Development activities will continue to progress to ensure that the project is ready to commence construction when the market conditions for base metals improve.”

No new timelines were given nor any details on what activities will or won’t take place this year.

A spokesperson for KGHM in their Vancouver office was not available to comment further.

As it was shedding 20 workers at the site last March, KGHM said it was revising the project schedule of the Victoria, a rich nickel-copper-PGE-gold development project at Worthington, west of Sudbury.

Two years ago, KGHM said Victoria would be reopened in 2019, but the company is blaming metal prices for the slow-down in development.

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.

Last October, KGHM put McCreedy West mine on care and maintenance, and laid off 25, plus more than 15 at the Morrison project.

In a release, the company tried to put a positive spin on the project, heralding the milestones passed in permitting, engineering, procurement and construction, such as a new electrical substation, temporary waste treatment plant and shaft-related infrastructure.

The company said it has completed its basic engineering phase, additional drilling to define the ore body continuity below the 2,000-metre level and documented the “significant positive economic features of the inferred mineral resources.”

Last March, KGHM announced that 20 positions are being eliminated and the development of its two-shaft copper, nickel and base metal mine is on a “revised” schedule based on what the Polish-headquartered mining company called “the unfavourable macroeconomic situation on the metals market.”

Nine to 10 engineering contractors were also being let go, according to Victoria’s project manager.

He couldn’t say whether the layoffs are permanent or cyclical.

Northern Ontario Business’ sister publication, Northern Life, received recent emails from sources close to the situation suggesting that the company is shutting down “a good chunk” of the development operation.

Last year, KGHM’s chief project officer Warner Uhl told a Sudbury audience of mining suppliers that shaft sinking would get underway in June.