Less than stellar output leads to layoffs at Bissett gold mine

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This article was published 11/01/2018 (2836 days ago), so information in it may no longer be current.

About 90 people have been laid off and another 150 jobs are in jeopardy in Bissett after the mine owner announced disappointing results for 2017.

True North, formerly known as the Rice Lake mine, has not produced as much gold or money as expected, said Klondex Mines Ltd. in a press release.

Klondex reopened the mine in 2016 and projected a return of 45,000 to 65,000 ounces per year.

But gold production from the mine formerly owned by San Gold Corporation was just 24,000-27,000 ounces in 2017. The company said in a press release it required a bare minimum of 35,000-40,000 ounces.

The mine will be run until contracts expire at the end of March and then be placed on “care and maintenance status,” when more layoffs are expected.

However, Bissett Mayor Doug McPherson is hopeful about 130 jobs can be saved. He is optimistic the layoffs are more of a blip until changes are made to allow long-term profitability for the mine.

“(Klondex) found out the way they’re operating the mine is not going to work,” said McPherson, who, along with other councillors, met with Klondex officials on Thursday morning.

The problem is the method used for mining the gold deposit is taking in too much waste rock, making processing unprofitable. The company is looking to convert to a method called stope mining, essentially blasting a smaller swath of rock using smaller equipment but more manpower.

“They’re going to analyze what they’re doing and restructure it to operate at a smaller scale,” McPherson said.

Klondex did not return messages from the Free Press.

“The company is encouraged by certain positive operational improvements made and additional understanding of the vein structures and mining methods gained during the past year,” it said in a press release.

“This information will help Klondex better define future alternatives.”

In the meantime, the company said it will continue to use the mill to process tailings from the previous owner. An estimated $20-million worth of gold was left behind in the tailings.

Klondex president Paul Huet is quoted in the release saying that True North Mine and the recently acquired Bison Gold Resource properties nearby “continue to be valuable assets and we are taking the necessary steps to build the foundation for their long-term success within the Klondex portfolio.”

Klondex is an international company with headquarters in Nevada and a Canadian office in Vancouver. Klondex has three other operating mines in Nevada.

It purchased the shuttered Rice Lake gold mine in Bissett in late 2015 for US$32 million. It opened in September of 2016.

The Rice Lake mine first opened in 1931 and has open and closed many times throughout its history. Bissett is about 260 kilometres northeast of Winnipeg.

The area is accustomed to ups and downs in the mining business, said McPherson.

“It’s not discouraging for the community,” he maintained.

bill.redekop@freepress.mb.ca