Echo Bay developing pair of Alaskan projects

Gold producer Echo Bay Mines (TSE) has two major development projects in southeast Alaska, Alaska-Juneau and Kensington. Together, they have the potential to increase annual gold production by about 450,000 oz., an increase of more than 60%, the company says.

The company produced more gold at a lower production cost per oz. in the third quarter than a year ago. Production at its four mines in the third quarter totalled 183,320 oz. of gold compared with 178,385 oz. in 1991. The company’s cash production cost per oz. of gold produced in the quarter was US$241 this year and US$243 last year.

At Echo Bay’s largest gold mine, McCoy/Cove in Nevada, gold production rose by 11% to 74,970 oz. in the third quarter of 1992 from 67,250 oz. a year ago. Quarterly silver output was 1.4 million oz. this year, down 29% from 2 million oz. last year. Quarterly cash production costs were reduced by $11 per oz., to US$238 this year from US$249 last year.

Echo Bay’s Lupin mine in the Northwest Territories produced 49,128 oz. of gold in the third quarter, compared with 55,792 oz. a year ago. The decrease was attributed to planned downtime for maintenance, and lower grade. Quarterly cash production costs were US$255 per oz., compared with US$223 last year. For the first nine months, Lupin’s cash production costs are US$239 per oz. compared with US$227 last year.

Lupin plans to increase mill throughput by about 15% in early 1993. The rated capacity of the mill is being expanded to 2,300 tons per day from the current 2,000 tons per day at a cost of about US$6 million.

At the 50% owned Round Mountain mine in Nevada, Echo Bay’s share of third-quarter production was 43,414 oz. gold, up 8% from one year ago. Round Mountain is Echo Bay’s lowest-cost gold producer. During the third quarter, the cash production cost at Round Mountain was further reduced to US$217 per oz., down $15 from one year ago.

Round Mountain is examining the feasibility of constructing a mill to recover the gold found in non-oxidized and high clay areas of the orebody. Results of this feasibility study are expected to be known early next year. At the 70% owned Kettle River mine in northeastern Washington state, production totalled 22,583 oz. (Echo Bay’s share is 15,808 oz.), about the same as a year ago when Echo Bay’s share was 15,330 oz.

Kettle River is Echo Bay’s smallest gold mine, accounting for less than 10% of the company’s production. Cash production costs were US$281 per oz., down from US$313 a year ago, reflecting reduced mining costs and increased production.

At the 100% owned Alaska-Juneau (A-J) development property in southeast Alaska, the permitting process is in an advanced stage. Three major permits are needed before development can proceed, and all three are currently anticipated by year-end or early in 1993.

A revised feasibility study is being completed, based on a modification of the proposed A-J mill flowsheet to maximize recovery of gold in the gravity circuit of the mill. This modification will reduce the estimated capital cost of the project and the cash production cost.