Ivan glitches lead to loss for Minera

Production disruptions at the Ivan copper mine in Chile account for the first-quarter loss of $191,000 experienced by Minera Rayrock (TSE).

At the annual meeting in Toronto, President David Crombie told shareholders that the disruptions were mainly caused by power outages. Copper cathode output fell to as low as 17.9 tons per day in February, down from 24.8 tons when the mine entered

commercial production in January.

By April, however, daily output had resurged to 25.2 tons and Crombie expects the mine to reach full capacity of 30.1 tons (22 million lb. copper cathode per year) by the third quarter. The cash operating cost averaged US65 cents per lb. in the first quarter and is expected to average US55-60 cents during the life of the mine.

“This is the first time our group has produced a metal product that goes directly to the end-user,” said Crombie, who also

serves as chairman of Minera’s parent, Rayrock Yellowknife

Resources (TSE). “It has turned out to be a little more difficult than our other businesses.” Rayrock Yellowknife, which holds a 37.4% equity interest in Minera and has interests in North

American-based producers of oil and gas, magnesium and potash, derives most of its revenue from gold mines in Nevada. The

company lost $492,000 (3 cents per share) in the first quarter after sustaining a profit for 19 years in a row.

Rayrock is expanding reserves and planning deep exploration at its Dee gold mine in Nevada; it is also applying for approvals to exploit the Daisy gold property, in the same state, at a rate of 35,000-40,000 oz. per year. Operator Rayrock has a 25% interest in Daisy, with Inter-Rock Gold (ME) owning the remaining 75%.

Before year-end, Minera is expected to reach a production

decision on the Sierra Valenzuela copper property, situated 25 miles northeast of the Ivan mine in Chile. An initial reserve of 6-8 million tons grading 1.5-1.7% copper will provide feed for expanded facilities at Ivan.

“We plan to fast-track production (at Sierra Valenzuela) in order to take advantage of the copper market,” Crombie said.

Copper was trading around US$1.60 per lb. in New York earlier this year.