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Twin Metals slashes Ely workforce

Announcement follows feasibility study, partner pull-out for proposed copper-nickel mine

Marshall Helmberger
Posted 9/4/14

ELY— Officials with Twin Metals announced this week that the company is eliminating 16 positions—or just over a third of its workforce— with most of the job cuts coming at its Ely field office. …

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Twin Metals slashes Ely workforce

Announcement follows feasibility study, partner pull-out for proposed copper-nickel mine

Posted

ELY— Officials with Twin Metals announced this week that the company is eliminating 16 positions—or just over a third of its workforce— with most of the job cuts coming at its Ely field office. Company spokesperson Bob McFarlin said employees were informed of the layoffs on Monday and that the company would be assisting workers in their transition. The layoffs will cut the company’s Ely workforce by half, from eighteen employees to nine.

The announcement comes just days after the company released a pre-feasibility study for its proposed copper-nickel and precious metals mine near Ely and just a few weeks after the project’s major partner, Chilean mining giant Antofagasta, announced it would not be making additional investment in the Twin Metals joint venture.

Antofagasta’s decision requires the project’s junior partner, Duluth Metals, to repay a $12.3 million bridge loan, either in cash or Duluth Metals stock. The value of that stock has tumbled precipitously since the Antofagasta announcement and the release of the pre-feasibility study last week failed to stem the fall. Twin Metals stock was trading at just 22 cents a share as of midday Wednesday. The company’s stock had traded at nearly three dollars a share as recently as 2011.

In addition to the Ely job cuts, seven positions will be eliminated in the company’s St. Paul headquarters, mostly through attrition, according to McFarlin.

McFarlin attributed the reductions to the completion of the pre-feasibility study and a shift to development of the mine’s plan of operation, rather than financial concerns. “The timing might suggest that [financial issues], but it’s really that we’re moving from one phase to the another,” said McFarlin.

According to McFarlin, development of the pre-feasibility study required a great deal of fieldwork, particularly exploratory drilling, in order to document the extent of the mineral resource. “We had a very robust drilling program during the pre-feasibility stage,” said McFarlin. “We had a lot of staff working on the geology of core samples, others gathering core samples, or cataloging data from core samples.”

But with the shift to mine plan development, McFarlin said the drilling will be wrapping up, at least for now.

As the company moves forward, it will require a different set of skills and, at least for now, a reduced workforce over the next two years or so as the company works to complete its plan of operation. The mine plan of operation, according to McFarlin, is the document that Twin Metals would provide to governmental agencies as a starting point for the environmental review process. Company officials tentatively hope to have the plan completed by late 2016.

Twin Metals, Marshall Helmberger, Ely