Con mine turnaround continues

Operations continue to improve at the Con underground gold mine in Yellowknife, N.W.T.

Miramar Mining (TSE) reports that cash costs for the first three months of 1994 averaged, US$294 per oz., compared with US$346 per oz. in the same period last year. The operation milled 99,607 tons of ore averaging 0.348 oz. per ton, from which 30,885 oz. were recovered.

Net earnings of $3.4 million are reported for the quarter, although cash flow (after changes in non-cash working capital) resulted in a $1-million deficit. Miramar bought the mine last year from Salt Lake City-based Nerco and is still modifying the operation in an effort to reduce costs.

Michael Surratt, vice-president, operations, highlighted some of the modifications at the annual meeting in Vancouver.

Changes on the mining side include a switch, wherever possible, to long-hole and shrinkage stoping from cut-and-fill methods. The mill, also, is being altered, to improve recoveries and boost tonnage to 1,400 from 1,000 tons per day.

Meanwhile, power-generating facilities are being expanded at Miramar’s Bluefish hydroelectric station. By generating all its own power, Surratt said, the company will decrease its per-ounce cost by an additional US$15. The mill modifications are expected to cost $1.3 million whereas the capital cost of generating the additional power is estimated at $11 million. Gold output is projected at 130,000 oz. this year and 140,000 oz. in 1995, with cash costs expected to drop to US$250 per oz. within two years. Miramar is also reviewing the development of two joint-venture projects in Cuba.

If all goes according to plan, the company could begin production at its Mantua joint venture with the Cuban government before the end of 1995. The solvent extraction-electrowinning copper project contains an estimated proven and probable reserve of 4.3 million tons grading 3.47% copper. The deposit measures about 4,000 ft. long, up to 200 ft. thick and extends to a depth of about 525 ft.

Miramar is completing bankable feasibility work on the project, including drilling, underground bulk sampling and metallurgical testing. Mantua is expected to produce in the order of 40 million lb. copper per year at US40 cents per lb.

Miramar’s other Cuban development is the Delita gold project, on the Island of Youth. The estimated proven and probable geological resource stands at 6.6 million tons grading 0.11 oz. gold and 1.2 oz. silver, plus a further 10.7 million tons in the possible category grading 0.09 oz. gold and 0.74 oz. silver.

The deposit is refractory and, as a result, will require more capital-intensive processing. Ballpark estimates put the cost in the US$50-million range.

Detailed evaluation of the project is under way and Miramar hopes to be at the bankable feasibility stage by the first half of 1995; it hopes to enter production as early as 1996. The company envisions a 100,000-oz.-per-year operation producing gold at a cost of about US$225 per oz.

Having recently completed a $50-million financing (consisting of 8 million special warrants at $6.25 each), Miramar is well-funded with more than $65 million in working capital and no long-term debt.