A new collective agreement covering operations at the Gibraltar open-pit copper mine near McLeese Lake, B.C., has been signed by Gibraltar Mines (TSE) and Local 3018 of the Canadian Auto Workers Union.
The agreement covers operations through to March 31, 1996. Assuming the feasibility study now under way is positive, the new contract paves the way for Gibraltar to proceed with expansion. Milling capacity will be boosted to 57,000 tons from 38,000 tons per day and cash costs will be lowered by an estimated US7-8 cents per lb.
Gibraltar has already raised enough funds for the $35-million expansion by selling 8.9 million common shares at $4.50 each to a group of underwriters. Net proceeds: $38.4 million.
Placer Dome (TSE), the company’s largest shareholder, agreed to buy a further 1.9 million shares at $5.12 each. The purchase will reduce Placer’s interest in Gibraltar to about 44% from 68.1%. This additional funding will be used to develop and acquire new copper projects.
Despite the recent copper price drop to US75 cents per lb., Gibraltar is confident the metal’s price will improve over the long term. President William Myckatyn noted demand for electronic equipment and other Western goods is increasing in the Third World and that world copper consumption is forecast to outstrip increasing production.
During the first half of 1993, Gibraltar’s production cost averaged US81 cents per lb.
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