Eldorado’s McIlvenna Bay starts copper concentrate output

Eldorado Gold (TSX: ELD; NYSE: EGO) says its McIlvenna Bay underground mine in Saskatchewan produced its first copper concentrate, a key milestone as the company pushes toward commercial production.

With wet commissioning of McIlvenna Bay’s processing plant completed, first concentrate was produced Sunday, Eldorado said Monday in a statement. The operation is now ramping up toward its nameplate capacity of 4,900 tonnes per day, with commercial production expected in the third quarter, the company added.

Delivering first concentrate on time and reiterating the goal of starting commercial production in the third quarter “shows Eldorado doing what it said, when it said,” National Bank Financial mining analyst Don DeMarco wrote in a note.

The milestone “further de-risks Eldorado’s growth profile as one of its two development projects moves closer to steady-state operations,” added TD Securities mining analyst Steven Green. He values McIlvenna Bay at about C$1.24 billion ($900 million).

Prolific district

Located about 65 km west of Flin Flon, Manitoba, and about 480 km north of Regina, McIlvenna Bay is one of the largest undeveloped volcanogenic massive sulphide deposits in Saskatchewan. It sits within the Flin Flon greenstone belt, a prolific mining district that has supported base metals production for more than a century and remains underexplored in several areas.

McIlvenna Bay, designed to produce copper and zinc concentrates containing gold and silver by-products, is one of the assets that Eldorado inherited when it completed the acquisition of Canada’s Foran Mining in April. Eldorado plans to spend about $17 million on exploration across McIlvenna Bay and its broader land package this year.

Key exploration targets at McIlvenna Bay include the nearby Tesla Zone and the Bigstone deposit, Eldorado said. This supports the potential for future mine-life extensions and growth beyond the current mine plan, TD Securities’ Greene said.

Ramp-up activities at McIlvenna Bay will focus on optimizing the flotation circuit and reagent addition performance while crews complete the paste plant and associated underground infrastructure needed to support full-scale operations, Eldorado said.

First asset

McIlvenna Bay is expected to produce on average 41 million lb. of copper, 20,000 oz. of gold, 444,000 oz. of silver and 54 million lb. of zinc annually over its projected 18-year mine life, according to Foran’s 2025 feasibility study.

As Eldorado’s first operating asset in Saskatchewan, McIlvenna Bay expands the company’s Canadian footprint beyond its Lamaque gold complex in Quebec. It also increases the miner’s exposure to copper, a metal regarded as critical in electrification and energy transition technologies.

Together with the Skouries copper-gold project in Greece, McIlvenna Bay will help transform Eldorado into “a high-margin, free cash flow generating business,” CEO George Burns said in the release.

Eldorado shares rose 1.3% to C$41.78 Monday morning in Toronto, valuing the company at about C$10.9 billion ($7.8 billion).