Cambior production, shares fly higher

Higher mill throughput at the Rosebel mine in Suriname enabled Cambior (CBJ-T) to produce 10% more gold in the first quarter than a year earlier.

During the first three months of 2005, Rosebel’s mill received 1.8 million tonnes of ore averaging 1.55 grams gold per tonne. That’s equivalent to a record 20,400 tonnes per day, or 20% higher than the previous record.

In the end, Rosebel produced 87,950 oz. gold, more than tripling production in the first quarter of 2004 (the mine began producing in February 2004); however, that figure is 6% lower than the record output of 93,300 oz. in the fourth quarter of 2004. Milled gold grades in the fourth quarter averaged 1.9 grams, owing to high-grading, a practice Cambior says it will abandon now that the processing rate is up to speed.

Gravity recovery improved to 40% in the recent quarter; that, combined with improvement in the stripping circuit, allowed Rosebel to reduce its gold-in-circuit inventory by 2,000 oz.

Meanwhile, Cambior has commissioned Rosebel’s effluent treatment plant. The primary crusher, stacker, and conveyor system are slated for completion in June, a month ahead of schedule. The ongoing second phase of construction is now expected to cost $2 million less than originally estimated.

In neighbouring Guyana, the Omai mine produced 34,260 oz. gold from 1.3 million tonnes of stockpiled material in the first quarter. The average grade was 0.9 gram gold per tonne. A year earlier, Omai produced 72,000 oz. The mine is slated to close in August.

The Doyon division, in Quebec, produced 37,100 oz. gold from underground — considerably less than in the first quarter of 2004. The shortfall reflects ground stability problems in 2004, which forced a 30% reduction in the underground mining rate. Cambior also wrote down the carrying value of Doyon by US$71.2 million.

Cambior’s half-interest in the Sleeping Giant mine, also in Quebec, netted it 7,150 oz. gold, slightly lower than a year earlier. Crews are preparing new production areas on three new levels.

Cambior has inked a deal to acquire Aurizon Mines‘ (ARZ-T) half-interest in Sleeping Giant for $5 million in cash. The deal also releases Aurizon from all environmental liabilities and reclamation costs.

Cambior President Louis Gignac says the acquisition cost of C$55 per oz. (US$45 per oz.) is “reasonable and provides us with greater flexibility in the development and exploration of the mine.”

In 2004 Sleeping Giant produced 67,000 oz. gold at a cost of US$291 per oz., and this year it is set to crank out 56,000 oz. at US$320 per oz.

Reserves at the end of 2004 totalled 490,000 tonnes grading 11.6 grams gold per tonne, or 183,200 oz.

All told, Cambior poured 166,460 oz. gold in the first quarter. The company expects to produce 621,000 oz. at a mine operating cost of US$250 per oz. during the entire year.

“We are not aware of any negative factors that would preclude us from meeting or exceeding our remaining objectives,” says Gignac.

Shares climbed as much as 26, or 11.5%, to $2.53 in early trading in Toronto on April 13.