Franco-, Euro-Nevada pour gold at Midas

The royalty sisters have graduated to gold producer status. In early December, Franco-Nevada Mining (FN-T) and Euro-Nevada Mining (EN-T), equal partners in the Midas joint venture, poured their first gold at the high-grade Ken Snyder mine in Nevada. The pour amounted to 291 oz. gold and 2,915 oz. silver.

The wholly owned mine, operated under contract by Dynatec, is expected to enter commercial production early next quarter, several months ahead of schedule, at the annual rate of 250,000 gold-equivalent ounces (T.N.M., Oct. 26-Nov. 1/98). Cash costs are estimated at just US$78 per oz.

The partners report that construction of the US$84-million mine, mill and related facilities has been completed on budget. The mill started up smoothly, and tuning of the facility is six weeks ahead of schedule.

In other news, Franco-Nevada and Pelangio-Larder Mines (PLLM-C) have entered into a 50-50 arrangement regarding the Detour Lake gold project, 200 km north of Timmins, Ont.

In the fall, Larder Lake assembled a 13,000-ha land package by purchasing Placer Dome‘s (PDG-T) exploration properties surrounding the Detour Lake mine. The deal with Placer included a $1-million cash payment, the issuance of Pelangio shares and warrants, and a 1% net smelter return royalty. Pelagio also negotiated an option on the mine property itself.

Pelangio raised the necessary funds by entering into a joint venture with Franco-Nevada, which is contributing $1.3 million cash and $1 million for initial exploration expenditures. Pelangio can maintain its half interest in Detour Lake by matching Franco’s expenditures over the first five years of work, to a maximum $1 million.