NEWS ROUNDUP — Construction begins at Andacollo

Construction of the Andacollo gold project is under way in central Chile, reports owner Dayton Mining (TSE).

The open-pit operation, being built by Bechtel Corp. on a fixed-cost basis, is expected to produce 140,000 oz. gold at US$150 per oz. in its first year. Proven and probable reserves stand at 30.7 million tons grading 0.035 oz. gold per ton.

Dayton has instituted a gold hedging program, which involved the purchase of put options for 360,000 oz. gold at a price of US$380 per oz. The company said the cost of these puts was offset by selling calls for 109,000 oz. at US$385 per oz.