The underground operation, 120 km southeast of Antofagasta, produced 75,400 oz. gold during the 3-month period. Also, cash operating costs dropped to US$45 per oz., making it one of the lowest-cost mines in the world.
Meridian produced 122,474 oz. gold during the period, at an average cash cost of US$94 per oz. Total production costs were US$155 per oz.
Second-quarter sales totalled US$32.9 million, up from US$16.6 million in the corresponding period last year. For the first six months of 2000, sales reached US$65.7 million, up from US$28.6 million in the first six months of 1999.
The recent quarter saw Meridian earn US$10 million (or 14 per share), compared with a loss of US$5.5 million (7 per share) in the year-ago period. In the first six months of 2000, income was US$18.3 million (25 per share), compared with a loss of US$8.5 million (12 per share) a year ago.
El Peon entered commercial production in January and, for the year to date, has turned out 136,041 oz. gold at cash operating cost of US$57 per oz. Total costs were US$95 per oz., and silver production amounted to nearly 1.8 million oz.
The mill processed ore at design capacity of 2,000 tonnes per day. The average head grade was 13.8 grams gold and 195 grams silver per tonne. The mill maintained a gold recovery of 94% and silver recovery of 89%.
On a daily basis, Meridian mined 1,775 tonnes from the Quebrada Orito and Quebrada Colorada veins, up 25% from the first quarter of 2000.
“The ore zones at Quebrada Colorada have been narrower than expected,” says Richard Lorson, Meridian’s vice-president of exploration, “but this has been offset by higher grades. Overall, if this trend continues, the entire reserve and resource base at El Peon will be more profitable than expected.”
During the quarter, Meridian drilled seven holes from underground, beneath the central oreshoot at Quebrada Colorada. Results confirmed ore grade intercepts in five of the holes, including a 1.6-metre interval grading 54.2 grams gold and 317 grams silver. The intercepts extended mineralization as much as 50 metres below the central oreshoot and over a strike length of 250 metres.
At the Cerro Martillo target, the company drilled 17 reverse-circulation holes, 14 of which returned ore grade values. Hole 213 hit 8 metres grading 70.2 grams gold and 799 grams silver per tonne, while hole 228 cut two intervals of gold mineralization: 4 metres of 7.6 grams gold and 31 grams silver, and 6 metres of 21.4 grams gold and 301 grams silver. Hole 233 hit 14 metres of 29.8 grams gold and 2,158 grams silver.
In northern Nevada, Meridian owns a 30% interest in the Jerritt Canyon mine. The company’s share of production was 24,431 oz. at cash costs of US$206 per oz. during the second quarter.
Current work is focused on the Mahala Basin area, where previous high-grade mineralization had been intercepted.
Meanwhile, in Idaho, Meridian produced 22,643 oz. gold at the Beartrack mine in the second quarter. Cash costs fell 9% to US$136 per oz., though the company completed mining and crushing during the first quarter. Leaching will continue over the next several years.
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