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Canada: Firm With Ties to Donkin Mine Isn't Expecting Lengthy Shutdown



By Tom Ayers

January 9, 2019 - In Canada, there's no clear end in sight for the shutdown at the underground coal mine in Donkin, N.S., which suspended operations on December 28 due to a roof fall.

However, Morien Resources, a publicly traded development company with ties to the mine, is optimistic the shutdown won't last very long.


Coal trucks have stopped coming out of the Donkin mine in Cape Breton after a roof collapse on Dec. 28, but Morien Resources doesn't expect the shutdown will last very long.

Photo by Gary Mansfield, CBC

The mine shut down while the staff were on a holiday break. There were no injuries, but the Nova Scotia Labor Department ordered the mine closed.

The mine's private operator says it is working on a safety plan to be approved by the provincial government before mining can resume. A spokesperson for Kameron Coal said in an email the company likely won't have an update on the shutdown until later this week.

Healthy Royalties


Morien Resources of Dartmouth, which relies on royalties from the sale of Donkin coal as its main source of income, said in a public statement Tuesday that it welcomes the provincial government's and Kameron Coal's commitment to the safety of the mine's 128 employees and contractors.

Morien also reported healthy royalties from the coal mine last year.

"We saw the royalty revenue from Donkin increase by a little over 50 percent from the first quarter to Q3, which we were obviously pleased with, especially given the overall poor performance of the resource sector as a whole last year," Dawson Brisco, president and CEO of Morien Resources, told CBC News.

Morien is an offshoot of Erdene Resource Development, which helped start the mine more than a decade ago.

Shutdown Not Likely to Affect Payments, Company Says


The company later sold its interest in the mine to Kameron Coal in exchange for royalties.

This week, Morien reported income of $241,000 from Donkin coal sales in last year's third quarter alone.

Despite the shutdown at the end of December, Brisco said the company is still planning to issue dividends to shareholders of a quarter of a penny per share.

"We don't envision the shutdown lasting long enough to affect our dividend payments," he said.

'We're Confident in Kameron's Ability'


"We'll issue the Q1 payment as we stated in [Tuesday's] press release, and beyond that I suspect Donkin will have re-entered production quickly enough to support the second-quarter payment."

Morien Resources expects to receive another royalty payment in February from Donkin's production in the last quarter of 2018.

The company continues to anticipate quarterly royalties of up to $2 million by the end of next year, depending on production and the price of coal.


"All I can say is that we've received their production guidance and that we're confident in Kameron's ability to scale up production volumes, if the conditions are right," Brisco said.