Expansion of Winnemucca plant to bring more jobs
Expansion of a Winnemucca plant that produces chemicals for the mining industry is likely to increase the number of jobs at the Humboldt County facility.
Production at the plant, which operates as Winnemucca Chemicals, will be expanded by 50 percent when the project is completed. That will boost its annual capacity to more than 125 million pounds of sodium
cyanide a year, compared with 85 million pounds currently.
Sodium cyanide is used by Nevada’s mining industry to extract gold and silver from heaps of crushed rock.
The Winnemucca Chemicals plant is owned by a 50-50 joint venture of Nevada Chemicals Inc. of Sandy, Utah, and a subsidiary of a German chemicals manufacturer, Evonik Industries.
Nevada Chemicals Inc., which is publicly held, said last week that its board of directors gave the go-ahead to invest fresh capital in the Winnemucca facility. In a filing with the Securities and Exchange Commission, the company estimated the cost of the expansion at $12 million to $18 million.
The immediate impetus for the expansion is a new deal in which Winnemucca Chemicals will supply sodium
cyanide to a major mining customer for five years.
That contract alone will boost sales from the plant by 30 to 40 percent, Nevada Chemicals said. It didn’t identify the buyer.
Even without the new contract, product sales from the facility were up by about 5 percent in the 12 months ended March 31, the company said in a SEC filing. That’s the result of the increased mining activity that’s followed high prices for gold and silver.
John T. Day, president and chief executive officer of Nevada Chemicals, said the expansion probably will lead to more employment, although details haven’t been nailed down. The plant currently employs about 25 people.
He said the company will finance its share of the project from existing cash reserves.
The Winnemucca plant came on line 18 years ago. It’s located on 1,300 acres just west of Winnemucca.
“If you’re going to produce roughly 80,000 ounces (of gold) a year at $800 an ounce … and gold is at $1,900 or $2,000 per ounce, that’s going to create a tremendous amount of cash flow.”