Mining News: Red Dog production up; Qanaiyaq pit development now underway

Teck Resources Ltd. April 26 reported its Red Dog Mine in Northwest Alaska produced record amounts of combined zinc and lead concentrates during the first quarter of 2016. During the first three months of the year, 1.08 million metric tons of ore averaging 17.4 percent zinc and 5.2 percent lead was milled at Red Dog, compared with 1.06 million metric tons averaging 16.5 percent zinc and 4.6 percent lead during the same period a year earlier. As a result, the mine produced 157.1 metric tons of zinc and 32.3 metric tons of lead during the first quarter, up 8 percent and 5 percent, respectively, from 145.9 million metric tons of zinc and 30.7 metric tons of lead produced during the first quarter of 2015. Capitalized stripping costs at Red Dog totaled US$11 million in the first quarter, compared with US$13 million a year ago. Teck said development of Qanaiyaq, a near-surface deposit that lies to the south of the mined out Red Dog main pit, began during the first quarter. First ore from this deposit is expected in late 2016 or early 2017, which will help offset future grade declines in the current Aqqaluk pit. At the end of 2014, Teck reported 7.4 million metric tons of reserves averaging 24.7 percent zinc and 6.9 percent lead for Qanaiyaq. Overall, Teck said its operations continue to turn a profit for shareholders, despite continued challenging metals markets. The company reported profit attributable to shareholders of C$94 million (C16 cents per share) for the first quarter of 2016, compared with C$68 million (C12 cents per share) a year ago. Adjusted profit attributable to shareholders was C$18 million (C3 cents per share), compared with C$64 million C11 cents during the first quarter of 2015. “Again our operations performed well by reducing our costs while maintaining production volumes,” said Teck President and CEO Don Lindsay. “Notwithstanding that the commodity cycle continues to be challenging, we are encouraged by the change in direction in steelmaking coal and zinc prices.” As of April 25, Teck had C$1.3 billion in cash and US$3 billion of undrawn, committed credit facilities. Teck said its cash balance is in line with expectations and consistent with the company’s goal of finishing the year with more than C$500 million.

- Shane Lasley