Placer Dome’s Abitibi mines add 4.2 million oz. to reserves

Working on the assumption that the best place to find gold is at an existing mine, Placer Dome (TSE) has defined additional resources which it believes could boost its ore reserves by nearly 10 million oz. gold over the next two years.

The company is also reporting significant operating and cost improvements at its mines.

“In the first half of 1992, the average cash production cost of gold was US$192 for the corporation’s 15 gold mines, 21% less than the year-earlier period,” says Vice-Chairman Peter Crossgrove. “We expect this trend to continue in the third quarter, when our costs should again be significantly lower than in the first half.”

Placer Dome produced a total of 965,000 oz. gold in the first half of this year, 28% higher than in the year-earlier period.

Crossgrove said the company’s exploration group is working closely with mine geologists to intensify mine-site exploration. “We think this collaboration is coming up with some very encouraging results.”

The largest boost comes from the Pipeline gold discovery near Placer Dome’s 60% owned Cortez mine in Nevada. The resource defined to date at this project is estimated to total 2.5 million oz. gold.

An additional preliminary resource of two million ounces gold was identified at the Dome mine in Ontario, while a resource of 800,000 oz. was outlined at the Detour Lake mine, also in Ontario. Its Sigma mine in Quebec added 1.4 million oz.

Surface drilling at Detour Lake resulted in the discovery of a new zone of gold mineralization with one drill intersection returning 1.2 oz. gold over 20 ft. The mineralization is reported to be closer to surface than ore currently being mined, and is near a mined-out area which is expected to simplify access to the zone.

Positive exploration results were also reported at the Dona Lake mine in Ontario, where drilling returned an intersection of over 50 ft. grading 0.44 oz. gold per ton. The discovery is being equated to 100,000 oz. gold, and drilling is continuing.

Placer Dome also found new resources at its Porgera mine in Papua New Guinea (600,000 oz.), its Bald Mountain (600,000 oz.) and Golden Sunlight (600,000 oz.) mines in the U.S.

Positive results are also expected from drilling programs under way at the Misima and Porgera mines in Papua New Guinea.

Earlier this year, Placer Dome’s 58.8% owned subsidiary Equity Silver (TSE) reported it had identified a new zone of mineralization at its mine near Houston, B.C.

Drilling from the bottom of the current pit defined a mineralized zone extending about 1,000 ft. north of the pit. The indicated mineralization is 530,000 tons grading 5.54 oz. silver and 0.13 oz. gold per ton plus 0.7% copper, with a 30% dilution allowance, plus an additional 220,000 tons of lower-grade material indicated below the pit.

An underground stope is being developed to reach the discovery which could extend the life of the operation by about 18 months beyond the closure originally planned for the fourth quarter of 1992.