Producing Mines

Reed Mine

The Reed Mine, which produces copper and gold, is located near Flin Flon, Manitoba. RNC owns a 30% interest in the Reed Mine through its acquisition of VMS Ventures Inc. (“VMS”), completed in April 2016. VMS announced the Reed discovery in 2007 and after follow-up drilling signed a joint venture agreement with Hudbay Minerals Inc. in 2010 whereby Hudbay became the 70% owner and operator of the Reed project and VMS retained a 30% participating interest. In December 2011, Hudbay approved the construction of the Reed Mine. The capital construction budget for Reed was CDN$72 million. Production at Reed commenced in September 2013 and the mine commenced commercial production on April 1, 2014. In April 2016, RNC closed a transaction to acquire VMS, including its 30% stake in the Reed Mine.

Production

During 2016, VMS’s 30% share of metal contained in concentrate production from the Reed Mine was 5.0 kt of copper and 1.4 koz of gold.

2017 Guidance

The operator has not provided guidance for the Reed Mine.  The following information is RNC’s management estimate of production (metal contained in concentrate). In 2017, RNC’s 30% share of production from the Reed Mine is expected to be 4-5 kt of copper and 0.8-1.1 koz of gold.

 

Reed – Mineral Reserves – January 1, 2017 (1)(2)

Reed Mine

Tonnes

Cu (%)

Zn (%)

Au (g/t)

Ag (g/t)

Proven

362,000

3.35

0.68

0.39

5.35

Probable

337,000

3.95

0.31

0.52

5.26

Total Mineral Reserve 699,000 3.64 0.50 0.45 5.30

Reed – Inferred Mineral Resources – September 30, 2016 (1)(3)

Tonnes

Cu (%)

Zn (%)

Au (g/t)

Ag (g/t)

88,000

3.13

0.42

0.79

6.00

Notes:

  1. A zinc price of $1.22 per pound (includes premium), copper price of $2.50 per pound, gold price of $1,300 per ounce and silver price of $18.00 per ounce using an exchange rate of 1.28 C$/US$ was used to estimate mineral reserves. A zinc price of $1.24 per pound (includes premium), copper price of $2.67 per pound, gold price of $1,300 per ounce and silver price of $18.00 per ounce using an exchange rate of 1.25 C$/US$ was used to estimate mineral resources.
  2. For additional details relating to the estimates of mineral reserves and resources at the Reed mine, including data verification and quality assurance/quality control processes refer to the pre-feasibility study filed on SEDAR on May 14, 2012 by VMS Ventures Inc. titled “Pre-Feasibility Study Technical Report on the Reed Copper Deposit, Central Manitoba, Canada” prepared by Trevor Allen, P. Geo., Cassandra Spence, P. Eng., Mark Hatton, P. Eng. and Brent Christensen, P. Eng. and dated effective April 2, 2012.
  3. Mineral resources that are not mineral reserves do not have demonstrated economic viability. The above mineral resources are exclusive of reserves and were estimated using the same metals prices as were used for the estimate of mineral reserves at Reed.

Exploration Opportunities

The Reed Mine deposit remains poorly tested at depth. Drilling to test for new ore zones is expected to begin once underground development reaches an appropriate depth. 

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