Royal Oak Mines (RYO-T) will close the Hope Brook gold mine in southwestern Newfoundland next year and relocate the mill and mine equipment to its Matachewan gold project in Ontario.
Hope Brook’s reserves are expected to be depleted in less than a year, and so it was decided to discontinue operations in the third quarter of 1997.
Royal Oak made the annoucement in its report for the recent third quarter, during which period the company earned $10.2 million. The earnings are 64% higher than the $6.2 million posted for the same period last year. By contrast, earnings for the first nine months of 1996 dropped 21% to $15.3 million from $19.5 million in the same period in 1995.
Gold production for the recent third quarter topped 104,012 oz., representing a 13% increase over the 92,158 oz. produced a year earlier. The company expects to produce about 400,000 oz. gold this year at an estimated cash cost of $355 per oz.
The Matachewan mine near Timmins is expected to produce 100,000 oz. gold annually at an estimated cost of US$227 per oz. Production is set to begin in the second half of 1998, once the Hope Brook mill is installed there.
Meanwhile, at the Colomac mine in the Northwest Territories, output has failed to measure up to blasthole grades. A reserve audit is under way.
The company estimates the reserve grade in zones 2.0, 2.5, and 3.0, where mining is under way, to be 0.046 oz. per ton. That figure is lower than the 1995 year-end estimate of 0.053 oz. per ton and parlays into a 253,000-oz.
decrease in Colomac’s minable reserves.
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