Normetal mine nears production again

Before the private placement was announced, Normetal held a 75% stake in the property which contains a former polymetallic producer known as the Normetal mine. La Sarre held a 25% interest.

However, under the terms of the financing, investors have agreed to subscribe for 48 units of the Nor- Sarre Partnership which was set up to hold a 35% interest in the project. The units are priced at $50,000 each.

According to Normetal President Gilles Fiset, the agreement has allowed work to begin on a ramp which is being collared to access proven and probable ore reserves of 160,000 tons grading 13.5% zinc. and 1.4 oz silver per ton.

While those reserves have been outlined to a depth of about 450 ft below surface, the property also contains additional 431,000 tons of geological reserves grading 12% zinc and 1.5 oz silver to a depth of 1,300 ft.

During the next 10 months, the joint venture is planning to produce 15,000 tons of zinc concentrates and 200 tons of silver concentrates from a small 230-ton- per-day operation.

“If the price of zinc remains firm (at around 80 cents (US) per lb), the project should generate a good profit,” Fiset told The Northern Miner. Normetal is currently involved in negotiations with Noranda Inc. (TSE) which Fiset says could lead to ore from the Normetal project being processed at the 3,500-ton- per-day Mattagami Lake milling complex.

Total mining transportation and custom milling costs are expected to be approximately $80(C) per ton while the net smelter return will be $120 per ton based on current prices.

“We were lucky that the lense (containing proven and probable ore) is located near surface about 3,000 ft northwest of the old mine workings,” said Fiset who expects most of the development work to be financed from production revenues.

Normetal and La Sarre plan to buy back within 12 months, the 35% project interest held by Nor- Sarre Partnership. The terms of the placement do not require the Normetal partners to issue any treasury shares.

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