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Northern Sun to offer custom milling

After an eight-month, $4-million cleanup at Redstone Mill in Timmins , the mill and its equipment are in pristine condition. And owner Northern Sun can’t wait to mess it all up.
The McWatters Mine in Timmins has been permanently shut down by owner Northern Sun Mining. The company will begin rehabilitation efforts on the site this summer and fall.

After an eight-month, $4-million cleanup at Redstone Mill in Timmins, the mill and its equipment are in pristine condition. And owner Northern Sun can’t wait to mess it all up.

“We probably have the cleanest mill in North America,” said Northern Sun president David Rigg. “We’re hoping we’re going to be able to make it quite dirty.”

A cease-working order issued by the Ministry of Labour halted operations at the mill and a cleanup was mandated after ore coming into the mill—mined at the company’s McWatters Mine— was found to contain asbestos early last year.

The level three cleanup involved 20 people, on site since May, erecting 50,000 square feet of scaffolding and dismantling every piece of equipment to scrub “every nook and cranny” at the mill, Rigg said.

The company resurfaced the road between McWatters and the mill, the receiving area was rebuilt and resurfaced, and any ore stockpiles on the property have been returned to the open pit.

“We’ve passed all the air tests,” Rigg said. “The Ministry of Labour are very happy with that and the cease-working order has now been changed.”

Northern Sun planned to restart the mill in January to ensure the circuits and equipment worked, and restart was expected to take three months.

The cleanup was the start of a major restructuring for Northern Sun in 2013, which included a name change. Northern Sun was formerly known as Liberty Mines.

“Part of that reason is to change focus in management in terms of where we want the company to go,” Rigg said. “Essentially, what we’re trying to do is build a mining company around the Redstone Mill.”

The mill is being set up to handle toll, or custom, milling, done on a fee-for-service contract basis.

Built in 2006, the mill has a capacity to process 1,500 tonnes of ore per day and is designed to operate separate circuits processing different kinds of ore.

Northern Sun has secured a year-long contract with Wallbridge Mining, which will start in May, to process ore from its copper-PGM Broken Hammer site in Sudbury. The ore will be trucked from Sudbury to Timmins for processing.

The mill will produce a gravity concentrate, which separates the small, denser parts of ore, leaving a copper-nickel concentrate, which will be shipped elsewhere for smelting. Rigg said Wallbridge can get better recoveries from the Redstone Mill than from an operation closer to home, while still covering the additional transportation costs.

“We’ve got basically half the circuit filled for 12 months with the Wallbridge contract and we’re currently in negotiations and discussions with other companies for toll milling in the Timmins area,” Rigg said.

Rigg said Northern hopes to have a second contract in place when the mill resumes operations in the spring, but companies will be fully vetted before signing on the dotted line.

“We have to be very careful, obviously, with outside material from any of the mines coming in; we don’t want a repeat of the asbestos problem,” he said. “So we have a protocol set up now that will involve a lot of test work, metallurgical work, mineralogical studies, and geochemistry to make sure that there’s nothing that would surprise us once it gets in the mill.”

With a new focus for the company, mining will take a backseat in 2014.

McWatters Mine, which operated between 2010 and 2012, has been permanently closed, and rehabilitation on the property will start this summer, Rigg said. Redstone Mine, meanwhile, remains on care and maintenance until nickel prices improve.

Rigg said there is also another 90 million pounds of nickel at the company’s Hart development property, but the company would need a long-term $9 nickel price before it would consider going back underground to extract the ore.

Northern also recently acquired Snow Lake gold mine in Manitoba, which has a resource of more than one million ounces, 450,000 of which are in proved and probable reserves, Rigg said.

Cash flow generated from that operation, combined with the activities at Redstone Mill, will eventually allow the company to refocus its energy on gold exploration and production.

Rigg believes all these changes will help get the company back on track.

“The big thing for me is having the flexibility to operate the mill and have long-term opportunity in the Timmins area for new jobs,” Rigg said. “To reopen the mill, we’ll probably be hiring 20 to 30 people, so that will be very positive, and more if we go with the full operation of the mill. We can generate that cash flow which will give us that long-term presence in the Timmins camp.”

The company faced a stumbling block in January when the TSX said it would delist it from trading by March 12 after it failed to meet listing requirements. However, the company has said it’s considering filing an appeal of the decision. Despite the setback, the company’s largest shareholder, Jien International Investment Inc., affirmed its commitment to support the company as needed in 2014 until it could again become cash-flow positive.