Toronto, ON / ACCESSWIRE / October 1, 2014 / Minnova Corp. (MCI.V) ("Minnova" or "the Company"), in response to our request for clarification
on the status of the designated Ragged Tailings Deposition Area (Ragged TDA),
has been advised by Environment Canada (EC) in collaboration with Fisheries and
Oceans Canada (DFO) on September 30, 2014 that because fish now occur within the
Ragged TDA, they consider the Ragged TDA to be a body of water frequented by
fish. As such, Environment Canada stated the "Ragged TDA will require a listing
on Schedule 2 of the Metal Mining Effluent Regulations (MMER)". In order
to achieve a Schedule 2 listing, the company will be required to submit an
Assessment of Alternatives report to determine if the Ragged TDA is in fact the
best option for deposition of new tailings. The assessment will consider all
possible alternatives for safe, long term tailings storage from environmental,
socio-economic and technical perspectives. This report and subsequent listing
process should not delay the planned use of Ragged TDA for tailings storage
which in any event was not planned to occur until late in H2 2015.
Ragged TDA Status and Path Forward
Gorden Glenn, Minnova President & CEO, said "Environment
Canada's feedback and decision on this matter provides greater clarity on the
status of the Ragged TDA and the requirements to re-establish the Ragged TDA as
a fully permitted tailings deposition area. It also establishes clear reporting
and approval timelines that allow the Company to continue to advance on various
financing discussions and development plans, currently underway, while we
proceed to comply with these federal requirements. I am confident that we will
be able re-confirm the Ragged TDA is in fact the best site for tailings and stay
on track to achieve our goal of re-starting mining operations and achieving gold
production at the Maverick Gold Project as soon as H2 2015."
Environment Canada in association with the DFO has advised the
Company that it is committed to initiating the review/screening process as soon
as it receives the Company's completed Alternatives Assessment Report, and that
the review/screening process would be completed within approximately three
months of its receipt.
Minnova intends to initiate the report immediately and will
engage consultants, as required, with the goal of submitting its Alternatives
Assessment Report to Environment Canada and the DFO before the end of October
2014. Environment Canada and the DFO further advise that, under normal
circumstances, the MMER Schedule 2 process takes six to eight months to complete
after the conclusion of the federal review/screening process. Upon successful
completion of the federal regulatory processes the company would again be
allowed to use the Ragged TDA as a fully licensed tailings management facility.
Minnova is already in possession of a valid Manitoba
Environment Act License No. 1207E which allows, from Manitoba's perspective, the
operation of an underground mine and mill and the deposition of tailings in the
Ragged TDA. Manitoba's Director of Environmental Approvals confirmed our License
in a letter dated May 17, 2012.
Modified Development Plans
As previously disclosed (May 22, 2014) the Company submitted a
Notice of Alteration (NOA) to Manitoba Conservation and Water Stewardship to
approve the addition of open pits as part of our restart plans. As part of the
regulatory review process the NOA was subject to inter-agency review (Canada Environmental Assessment Agency or "CEAA") and public
consultation process. While no feedback was received from the public
consultation process, CEAA has requested that the Company submit a Project
Description, based on our 900 tpd open pit and underground development scenario,
as outlined in our July 9, 2014 Updated Preliminary Economic Assessment (Updated
PEA).
After reviewing the Updated PEA and additional detailed mine
development information provided by Minnova Corp., CEAA has determined that the
proposed re-start of the PL Mine "is a designated activity pursuant to paragraph
16(c) of the Regulations Designating Physical Activities (the
Regulations) under the Canadian Environmental Assessment Act, 2012 (CEAA
2012)".
16(c). The construction, operation,
decommissioning and abandonment of a new rare earth element mine or gold mine,
other than a placer mine, with an ore production capacity of 600 tonnes per day
or more;
The Agency made this determination considering the following
factors:
1. The mine has not been in operation since 1989. The
re-opening of the mine in addition to the development of five open surface
mining pits, a potential acid generating waste rock stockpile, four overburden
and non-acid generating rock stockpiles, on site haulage roads and upgrades to
existing access roads constitutes a new mine for the purposes of paragraph
16(c) of the Regulations.
2. The cumulative design production capacity (resuming
underground mine ore production with new surface mine production) of 900 t/day
exceeds the 600 t/day threshold in paragraph 16(c) of the Regulations.
This was an unexpected request as the Company does not believe
that this section of the CEAA 2012 regulations applies to the re-start of mining
at past producing operations such as the PL Mine. As a result of this request
from CEAA and factoring in other technical and project economics criteria, the
Company is reviewing our re-start plans with Manitoba and Federal regulators and
considering our alternatives which are:
- Submit a Project Description, as requested by CEAA, which could result in
a full environmental assessment and commensurate consultation process that
could delay project development by over 2 years
- Revise our mine development plans to an underground only mining operation
with a production rate of less than 600 t/day and therefore not trigger
paragraph 16(c) of the Regulations
- Seek a review by the Federal Court as to CEAA's application of paragraph
16(c) of the Regulations
Gorden Glenn commented "while we dispute CEAA's assessment that
our planned re-start of the PL Mine is a "new" mine, we believe the best course
of action for our shareholders and all stakeholders is to achieve the shortest
possible development timetable within the existing regulatory environment. We
will take the necessary steps that provide a clear development timeline that
will enable us to advance our financing and development efforts under a plan
that is, to some extent, entirely within our control."
Should the Company opt to re-start the mine as an underground
only operation (see Cautionary Statement 1, below) we believe we can
still achieve a short development schedule as the PL deposit is already
partially developed with 7,000 meters of existing underground development
accessed via an existing portal. Much of the 537,000 ounces of contained gold in
the mine plan, as defined in the July 2014 Updated PEA (see Cautionary Statement 2, below),
are located between surface and -100 meters vertical. As such we do not believe
our efforts to optimize the MGP's after-tax NPV5% of $83.3 million by
incorporating 5 shallow open pits on the PL deposit will be materially impacted
by a revised underground only PL deposit mine plan. For example, under the
current underground mine plan, approximately 250,000 ounces or 54% of the
forecast 462,000 contained ounces in the current PL Deposit underground mine
plan occur between surface and -100 meters (approximately 43% occur between
-100m and -200m). We estimate that we can mine approximately 50% of the current
43,000 contained ounces of gold forecast to be produced from the open pit mine
plan on the PL deposit in years +1 through 4 via shallow underground mining
methods with minimal disruption the overall mine plan.
On this point ACA Howe has been engaged to complete a new
underground only mining scenario that will maximize the extraction rate of the
near surface PL deposit gold resources.
A revised, underground only, re-start plan is a viable option
that would avoid unnecessary regulatory delays and conforms with our existing
provincial license to advance the project in this manner.
Gorden Glenn stated, "With clear guidance from Environment
Canada and a reasonable (~12 month) timeline to have the Ragged TDA added to
Schedule 2 of the MMER, and the ability to revise our re-start plans as an
underground only operation, we are in a strong position to advance our various
financing and M+A discussions and initiate site work toward our stated goal of
initial production as early as H2 2015. Minnova remains committed to best
practices in environmental management and we look forward to cooperating with
all federal and provincial regulatory agencies to ensure we are in full
compliance with CEAA 2012, the Metal Mining Effluent Regulations and all
applicable provincial laws, as we are obliged to under our existing Environment
Act Licence No. 1207E."
Ragged Tailings Deposition Area History
The following is a brief summary of the history of the Ragged
TDA and the process that led to the EC/DFO's decision. The trigger for the
decision by EC is that the Ragged TDA now represents a "water frequented by
fish" as fish were found by Minnova in the Ragged TDA during an August 2014 fish
population study requested by the EC in June 2014.
The Company believes that fish were able to enter the Ragged
TDA over the existing discharge control weir structure during a seasonal high
water period at some point after the mine was placed on care and maintenance
following the cessation of mining activities in April 1989.
Despite the occurrence of fish in the Ragged TDA, AECOM
concluded that the "Ragged TDA does not support a commercial, recreational, or
Aboriginal fishery."
AECOM's work and their conclusion build on the historical
studies that originally supported the creation of the Ragged TDA in January 1989
(the start of original mining operations by Pioneer Metals). Following an
extensive Environmental Impact Statement (Ilam 1987) that concluded "no
significant fisheries resource would be lost" then Manitoba Minister of Natural
Resources, Jack Penner, in a letter to then Minister of Fisheries and Oceans,
The Honorable Mr. Tom Siddon, stated that "his department has concluded that
Ragged Lake is the most suitable tailings disposal area available" and he
requested that Tom Siddon designate it for use a tailings facility under section
33.1 of the Fisheries Act.
In Honorable Minister Siddon's response letter, duly
authorizing the use of Ragged Lake as a tailings management facility, he
confirmed that "My regional officials are satisfied with your assessment that no
significant fishery will be lost as a result of the designation [as a tailings
facility]" he further commented that the use of Ragged Lake as the tailings impoundment area
for the Puffy Mine will "result in the permanent loss of Ragged Lake as a
natural resource and the associated fisheries resource."
The Ragged TDA has remained licensed continuously by the
Province since 1988 and most recently, in May 17, 2012, Manitoba's Director of
Environmental Approvals issued a letter requiring that, in operating the Ragged
TDA, we comply with Clauses 6 and 7 of the Manitoba license by meeting all the
criteria set out in the MMER.
Cautionary Statement 1
The Company has not made a production decision at this time.
However, readers should note that the Company has not commissioned a
"feasibility study" and, in the event that the Company makes a production
decision based on the information currently available to it, the Company will be
making its production decision without a feasibility study of mineral reserves
demonstrating economic and technical viability. As such there is an increased
uncertainty of the MGP economic forecasts, as previously disclosed in the July
9, 2014 Updated Preliminary Economic Assessment and increased technical risks of
failure.
Cautionary Statement 2
It should be noted that the preliminary economic assessment
prepared by the Company is preliminary in nature and it includes inferred
mineral resources that are considered too speculative geologically to have the
economic considerations applied to them that would enable them to be categorized
as mineral reserves, and there is no certainty that the preliminary assessment
will be realized. Mineral resources that are not mineral reserves do not have
demonstrated economic viability.
Qualified Person
The Company's Qualified Person ("QP") for the drill program at
the Maverick Gold Project is Brian Robertson, B. Sc., P. Eng.. As QP, Mr.
Robertson has prepared or supervised the preparation of the scientific or
technical information for the property and has verified the data disclosed in
this press release.
About Minnova Corp.
Minnova Corp. is an emerging Canadian gold producer focused on
re-starting the PL Mine and expanding gold resources on its PL and Nokomis gold
deposits (collectively the "Maverick Gold Project"). The Company has completed
an Updated PEA which supports average annual production of 48,100 ounces over a
+10 year mine life. Work to date strongly supports advancing the project toward
production with an initial program of underground test mining and completion of
a Feasibility Study to bring the PL Mine back into production. The PL Mine
includes a 1,000 tpd flotation mill with a replacement value in excess of $50
million, over 7,000 meters of developed underground ramp to 135 metres depth, is
fully road accessible and close to existing mining infrastructure. The Maverick
Gold Project is located in the Flin Flon Greenstone Belt of Central Manitoba.
For more information please contact:
Minnova Corp.
Gorden Glenn
Chairman, President and CEO
gglenn@minnovacorp.ca
Phone: +1 (647) 985 2785
info@minnovacorp.ca
http://www.minnovacorp.ca
CHF Investor Relations
Cathy Hume
CEO
Tel: +1 (416) 868 1079 ext.231
Email: cathy@chfir.com
www.chfir.com
Renmark Financial Communications Inc.
Barry Mire: bmire@renmarkfinancial.com
Laurence A. Lachance:llachance@renmarkfinancial.com
Tel.: +1 (416) 644 2020 or +1 (514) 939 3989
www.renmarkfinancial.com
This news release contains "forward-looking information"
within the meaning of applicable Canadian securities legislation.
Forward-looking information includes, but is not limited to, information
regarding the Company including management's assessment of future plans and
operations, that may involve risks associated with mining exploration and
development, volatility of prices, currency fluctuations, imprecision of
resource estimates, environmental and permitting risks, access to labour and
services, competition from other companies and ability to access sufficient
capital. As a consequence, actual results may differ materially from those
anticipated in the forward looking statements. A feasibility study has not been
completed and there is no certainty the disclosed targets will be achieved nor
that the proposed operations will be economically viable. Although Minnova has
attempted to identify important factors that could cause actual results to
differ materially from those contained in forward-looking information, there may
be other factors that cause results not to be as anticipated, estimated or
intended. There can be no assurance that such information will prove to be
accurate, as actual results and future events could differ materially from those
anticipated in such information. Accordingly, readers should not place undue
reliance on forward-looking information. Minnova does not undertake to update
any forward-looking information, except in accordance with applicable securities
laws.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
SOURCE: Minnova Corp.