1994: A LOOK BACK — North American companies producing gold,

The increasing trend toward “globalization” of the mining industry continued in 1994, with an increasing number of North American-based companies succeeding in bringing foreign properties into production. What follows is a survey of several Canadian and American companies that have new operations up and running either in the U.S. or further south.

Having just poured its first gold bar at the Mt. Hamilton mine in Nevada, Rea Gold (TSE) expects to produce 54,000 oz. gold and 141,000 oz. silver annually over a lifespan of 7.5 years. The open-pit, heap-leach operation is in the southern end of the Battle Mountain Trend.

Two contiguous deposits contain slightly more than 9 million tons averaging 0.052 oz. gold per ton and 0.37 oz. silver, with a stripping ratio of 5.8-to-1. Based on a recovery rate of 75% for gold and 45% for silver, Mt. Hamilton is expected to produce a total of 352,700 oz. gold and 1.5 million oz. silver at a projected cash cost of US$240 per oz. gold. Capital costs are projected at US$21.4 million.

Farther north within the same trend is the Reona gold mine, which owner Battle Mountain Gold (NYSE) expects will produce 16,000 oz. in the final quarter of 1994. An open-pit deposit, Reona hosts 13.5 million tons grading 0.028 oz. gold per ton; based on this reserve and on a 70% recovery rate through heap leaching, a total yield of 260,000 oz. is anticipated. Annual production of 50,000 oz. would result in a mine life of six to seven years. Cash costs are estimated at US$280 per oz.

Elsewhere in the U.S., Hecla Mining (NYSE) expects that, before year-end, it will pour gold at its 80%-owned Grouse Creek deposit in central Idaho. Mining of the underground high-grade zone and the open-pit Sunbeam deposit began in mid-year, and the 6,000-ton-per-day mill started up at the end of October. Annual production is targeted at 110,000 oz. gold and 400,000 oz. silver over eight years at a cash cost of US$185-190. Minable reserves stand at 15.1 million tons averaging 0.055 oz. gold and 1.1 oz. silver. Great Lakes Minerals (TSE) holds the remaining 20% interest.

La Choya, Hecla’s first mine outside of Canada and the U.S., started up in early 1994 and produced 32,000 oz. gold by the end of the third quarter. The average cash cost at the Mexican operation was US$353 per oz., although this decreased to US$254 during the third quarter. Situated in the nortwestern state of Sonora, the open-pit, heap-leach mine contains proven and probable reserves of 6.1 million tons averaging 0.037 oz. Hecla expects to recover 200,000 oz. during the 3-year mine life.

Nearby is Eldorado’s (TSE) La Colorado open pit, which has been producing gold since January, 1994. At the end of the third quarter, La Colorado had produced 13,219 oz. gold and 44,604 oz. silver at an average cash cost of US$196 per oz. Two deposits host a proven and probable resource of 12 million tons grading 0.041 oz. per ton. A production target is set at 25,000 oz. per year, with a cash cost projected at US$153 per oz.

By early 1995, Greenstone Resources (TSE) expects to pour its first gold at the Santa Rosa open pit near Canazas, Panama. Two orebodies contain proven and probable reserves of 13.7 million tons grading 0.044 oz. gold, which should sustain mining for 10 years. Mining is under way on the Alto de la Mina deposit, and full production, to be reached by 1996, is projected at 60,000 oz. annually at a cash cost of US$185 per oz.

Last June, Monarch Resources (TSE) entered production at La Camorra, a gold mine in the Venezuelan district of El Dorado. Mining by both underground and open-pit methods, Monarch expects to produce 81,000 oz. annually over four years at a cash cost of US$125 per oz. Underground reserves are estimated at 594,000 tons averaging 0.65 oz., with surface reserves of 83,000 tons grading 0.16 oz. Capital costs will total about US$24 million.

Meanwhile, in northern Chile, the Quebrada Blanca open-pit copper mine started up in mid-year and produced (by means of solvent

extraction-electrowinning) 1,121 tonnes of cathode copper in the third quarter. Cominco (TSE) holds a 38.25% interest, followed by Teck (TSE) with 29.25% and Cominco Resources International (TSE) with 9%. The remaining 23.5% is held by two Chilean companies. At full production, Quebrada Blanca is expected to produce 75,000 tonnes annually. A 97-million-ton, secondary, sulphide orebody averaging 1.3% copper will sustain production for 14 years at an operating cost of US40 cents per lb. Once depleted, an underlying, primary, mineralized zone with an estimated resource of 220 million tons grading 0.5% copper will be exposed. Capital costs will total about US$335 million.

Elsewhere in the region, Minera Rayrock (TSE) entered production at its Ivan copper mine in August. Combining underground and open-pit mining methods, Minera expects to crank out 10,000 tonnes of cathode copper by year-end. Oxide reserves total 3.7 million tonnes grading 1.9% copper while sulphide reserves stand at 934,000 tonnes grading 4.6% copper, all of which points to a mine life of 10 years. Cash operating costs are anticipated to be US59 cents per lb. and capital costs will likely amount to US$31.6 million. And Rio Algom (TSE) began production at its Cerro Colorado copper project 120 km from Iquique in February. Output of 85-90 million lb. copper is projected for 1995.