St. Lawrence fluorspar mine in limbo

Canada Fluorspar Inc. may be having second thoughts about the future of its mine on Newfoundland's Burin Peninsula.

The re-opening of the St. Lawrence mine was announced in 2011. The construction phase was expected to start this summer, employing more than 370 workers.

But a cost overrun of almost $60 million has sentthe companyback to the drawing board to reassess the viability of the operation.

"We are working through a re-scoping of the project," said Linsday Gorrill, the CEO of Canada Fluorspar.

"The initial estimate was done in 2010. If you look at the escalation of construction costs across the province and around the world in mining, things have gone up quite a bit."

The company recently released the following statement to its shareholders: "As a result, no final decision on the project's cost and scope has been made as yet, nor will it be made until this review process has concluded. Accordingly, the company can provide no assurance at this time that the project will proceed."

Despite that statement, Gorrill said the company's commitment to the project remains strong.

"We are 100 per cent committed to building that project, and when we put that shovel in the ground, when we start, that project will be there for 30 years ... at least," he said.

"We're spending $2 million drilling for other veins, too, so we're actually expanding our fluorspar assets to benefit the project."

Not if, but when

St. Lawrence Mayor Wayde Rowsell said he feels confident that the company's investment is proof of their commitment to the mine.

"They've done extensive exploration, they've spent millions of dollars, they've negotiated a long-term tax agreement with St. Lawrence. In fact, the first 30 days of each year, they pay in full," he said.

Rowsell said the bigger question is not if the mine is going to reopen, but when.

Gorrill said that still needs to be worked out.

"When we come to a conclusion of what the scope is going to be and what the framework of time is going to be ... we'llmeet the province together, and go public on that," he said.

"We believe we're going to do that in a shorter period of time than a longer period of time, but I can't give you an exact date."

If the project does go ahead, Gorrill said the construction phase will take two years to complete.