Vale commits $23 million for diamond drilling, other work related to Thompson mine extension project

Vale Manitoba’s proposed Thompson mine extension project doesn’t have the green light from the company’s board of directors just yet but $23 million has been allocated towards it over the next six months in an en effort to collect more information on which to base a final decision.

Some of the money will be spent on diamond drilling to try to determine the precise extent of the footwall deep and hanging wall ore body, Manitoba Operations general manager Franco Cazzola told the Thompson Chamber of Commerce at their Feb. 10 meeting. 

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“Our project right now sits at 50 per cent inferred and 50 per cent indicated [resources],” Cazzola said. “When you have an inferred resource … the ore body is not quite as well-defined as you’d like it to be and so in order to to that you actually have to do more diamond drilling, pull more cores.”

With the next few weeks, he said, five surface drilling rigs will be put to work on Vale’s property.

“Never before … in my 33 years of mining have I ever see five surface rigs drilling at such a pace that’s going to happen to prove out the resource from inferred to indicated,” said Cazzola. 

The money will also be used to build a road out to where a new ventilation raise will go if the project receives board approval and goes ahead.

“We want to create the road now in wintertime so that when … the animals return and the birds come back they won’t be in any kind of pathway that we’re using for construction,” Cazzola said. 

Another reason to start building the road now is so that some of the required infrastructure is in place if the project qualifies for full capital funding.

Though the project has been at the maybe/maybe-not stage for years, Cazzola said there are reasons why it’s likely that a final decision will come before too long. “I think there’s been an increased focus as a function of Vale’s depleting resources and en increased focus as a function of the EV [electric vehicle] market that’s coming on,” Cazzola said. 

Also playing a role is the smaller workforce that resulted from layoffs in the fall. Manitoba Operations has to be hitting production targets and showing lower costs of extraction in order to justify the mine extension, which could boost production from about 900,000 tonenes of ore per year this year to as much as 1.4 million tonnes per year, an increase of more than 50 per cent.

“A big part of our success going to the board is a function of everything that we’ve done over the course of 2020,” Cazzola said. “Layoffs are never good for people, for the community, but we needed to be a more productive organization with a better balance sheet and when I say that I’m not trying to be insensitive because those are real people that we’re talking about, cousins, friends, family.”

Six employees laid off last year have had their layoffs rescinded but Cazzola says he won’t know until maybe another year has elapsed if the workforce is now at the correct size.

“We think that the six employees that we’ve recalled will satisfy the production needs that are currently in a bit of a shortfall.”

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