Sunshine Mining To Halt Refinery Operations Company Blames Plunging Silver Prices For Shutdown
Sunshine Mining & Refining Co. announced Wednesday that it will close its refinery complex indefinitely next month and lay off 14 people.
The move comes as the result of plunging silver prices and declining output at the flagship Sunshine Mine in the Silver Valley, said Harry Cougher, vice president for Boise-based Sunshine and manager of mine operations at Big Creek.
The refinery had operated at a fraction of its capacity of 30 tons of ore a day. Sunshine had looked for other sources of silver beyond ore from the mine to keep the refinery busy, Cougher said.
The nature of the chemical refining process requires the refinery to run all day and night and the market wouldn’t support that cost, he said.
Some of the workers will be transferred to parts of the mine, he said. However, 14 employees who maintained and operated the refinery line will lose their jobs.
The shutdown doesn’t affect the two shifts at the mine itself. Sunshine continues to move forward in exploring the West Chance silver deposit in hopes of finding new ore.
Sunshine will still remove antimony, an industrial metal, and arsenic from the ore by using mill equipment at the mine site, he said. But the final product will be shipped to East Helena, Mont., to be refined by Asarco Inc.
New York-based Asarco offered a deal that Sunshine couldn’t refuse, Cougher said. “But things could change very quickly.”
If the West Chance deposit is rich enough, and if the silver market rebounds, the company could dramatically increase the amount of ore the mine produces.
More ore at better silver prices would make operating the refinery much more economical, Cougher said.
Shutdown procedures will start immediately but the layoffs won’t happen until April, he said. The refinery will be idled in such a way that the company can fire it back up in very little time, he said.
Analysts had little reaction to the refinery closing. Lou Moscatello of American Investment Services in Massachusetts said that the move isn’t too surprising considering the market conditions.
“They have said they wanted to make refining a bigger part of their business but it doesn’t appear as if that has panned out for them,” he said. Moscatello’s firm has advised its investors to hold less of Sunshine’s stock recently.
Sunshine’s stock closed Wednesday unchanged at $1.63.