A breakdown of the production hoist at
At presstime, the company was dismantling the hoist to evaluate potential damage to the bearings and the central shaft. The impact on production has yet to be determined.
The Doyon mill has been running at capacity by processing 1,600 tonnes of ore per day from the Mouska and Doyon underground mines plus 2,000 tonnes per day from a low-grade stockpile.
Underground ore will continue to be raised using Doyon’s service hoist. The company also plans to truck ore to the surface via ramps.
During 2002, the Doyon and Mouska mines poured a total of 216,200 oz. gold, down from 228,700 oz. in 2001. Some 50,900 of those ounces were produced in the fourth quarter, down from 62,000 oz. a year earlier. Mill throughput slipped 10%, owning to a harder mix of lower-grade material from underground.
Doyon is expected to produce 218,000 oz. at a higher mine operating cost of US$241 per oz. in 2003. The higher costs reflect development for stope preparation.
Exploration east of the Doyon shaft has uncovered higher-grade mineralized zones between levels 12 and 14 in the extensions of lenses identified on higher levels, including the new zone J. Drilling continues at depth, with nearly 10,000 metres of exploration and development drilling planned for 2003.
Also, the company has extended at depth existing mineralized lenses at all its Canadian gold operations, following the expenditure of US$9.2 million. The company spent another US$4.2 million on off-site exploration. Mine-deepening programs are being considered at the Sleeping Giant mine (also in Quebec) and at Mouska.
For the last three months of 2002, Cambior posted earnings of US$1.5 million (or a penny per share) as production slipped and the company continued to trim its hedge book (T.N.M., Jan. 20-26/03). A year earlier, Cambior made a profit of US$12.1 million (12 per share). Revenue between the two periods climbed by US$1 million, to US$53.4 million, while cash flow from operations more than doubled to US$12.5 million.
For all of 2002, Cambior piled up a net loss of US$8.1 million (6 per share), a shade better than the US$8.2 million (9 per share) lost in 2001. The 2002 loss includes a negative non-hedge derivative adjustment and other charges totalling US$17.3 million. Revenue climbed to US$204.2 million from $198.2 million between the two years, while cash flow plummeted by more than US$50 million, to US$30.8 million.
During 2002, Cambior trimmed its hedging commitments by 600,000 oz. gold, or 32%. At year-end, these commitments totalled 1.3 million oz. at an average price of US$301 per oz., including 114,000 oz. of call options sold at an average of US$301 per oz. The hedge book represents 31% of Cambior’s reserves. By the end of 2003, the company plans to reduce its hedge position a further 37%, to 800,000 oz., or 20% of reserves; that’s the minimum allowed under the new credit facility arranged for the Rosebel project in Suriname.
Cambior plans to use $5 million from the $17.1 million received from a recent exercise of more than 10 million warrants to reduce debts. Each warrant was good for one Cambior share at a price of $1.70. Cambior currently has 170.3 million outstanding shares.
Cambior reiterated its 2003 production estimate of 522,000 oz. gold at a mine operating cost of US$227 per oz.
At the end of 2002, Cambior had US$42.8 million in cash and equivalents. Long-term debt was just short of US$28 million.
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