Eldorado expands Brazilian gold producer

The cost of expanding the Sao Bento gold mine in Brazil led to a loss of US$1.6 million for Eldorado Gold (ELD-T) in fiscal 1996, compared with a loss of US$2.2 million in the previous year.

The mine, acquired in July 1996, produced 52,370 oz. gold at a cash operating cost of US$320 per oz. during the year.

The expansion program, still under way, calls for an increase in hoisting capacity, a conversion to long-hole open stoping from cut-And-fill mining, and equipment purchases.

Contributing to the loss were production shortfalls caused by startup problems at the recovery plant and leach pad facilities at the Colorada mine in northwestern Mexico, as well as higher general and administrative costs related to international expansion.

Notwithstanding the loss, Eldorodo produced a total of 103,122 oz. gold last year at a cash operating cost of US$272 per oz. — a 231% increase over the 31,128 oz. produced in 1995.

The average realized gold price for 1996 was US$387 per oz., compared with US$385 per oz. in the previous year. Gold revenues increased to US$39.9 million from US$11.22 million.

Updated reserves for the Vancouver-based company’s operations are as follows: * 3.1 million tonnes grading 9.12 grams gold per tonne at Sao Bento; * 9.7 million tonnes grading 1.06 grams gold at the Colorada mine; * 1.5 million tonnes grading 1.99 grams gold at the 51%-owned Trinidad project, in Mexico’s Sinaloa state; and

* 974,000 tonnes of 6.04 grams gold at the wholly owned Kaymaz project in Turkey.

At Colorada, reverse-Circulation and diamond core drilling has identified an area of high-grade gold mineralization within the undeveloped Gran Central deposit, which hosts an in situ resource of 11.8 million tonnes grading 0.96 gram gold.

Significant intercepts include: hole 15, which returned 2 metres grading 7.36 grams gold and 2 metres of 5.9 grams; hole 128, which intersected 6 metres grading 3.28 grams and 22 metres grading 5.17 grams; and hole 132, which intersected 4 metres of 5.15 grams, plus 14 metres of 8.52 grams (including 6 metres of 14.96 grams).

Also, hole 5 returned 8 metres grading 9.24 grams gold (including 4 metres of 15.7 grams), and hole 25 intersected 9.4 metres grading 32.27 grams (including 3 metres of 80.14 grams).

The high-grade mineralization, which occurs within quartz manganese veins, has been traced along a strike length of 130 metres and remains open along strike.