Glamis gets green light for mine in Honduras

Junior Glamis Gold (GLG-N) has received the final operating permit at the San Martin mine in Honduras, allowing the Reno-based company to begin production.

Glamis broke ground at the site, 55 miles north of the capital of Tegucigalpa, in mid-January, beginning with construction of the ponds, pads and processing plant.

The company has ordered all the major components for the plant, including crushing, agglomerating and staking systems. Meanwhile, the mining fleet of refurbished equipment from its Picacho mine in California has arrived in Honduras. The fleet includes six haulage trucks, two loaders and a blasthole drill.

The project remains on schedule for Glamis to begin mining in the third quarter, with initial production planned for the fourth quarter. The company expects to produce 14,000 oz. gold for the remainder of 2000, improving to full capacity of 85,000 oz. in 2001. Cash operating costs are estimated to be below US$150 per oz., whereas total (including acquisition) costs should be about US$210 per oz.

Capital costs for the open-pit heap-leach project are US$27 million, which the company financed with existing cash resources.

Construction included the relocation of 13 local families to the nearby town of San Ignacio. Glamis has also contributed to the construction of a medical clinic and school, as well as new water wells to ensure an adequate supply for the whole town.

The company sees possible reserve increases in the future for San Martin. Current reserves stand at 1.08 million oz. within 43.3 million tons grading 0.025 oz. per ton — more than double the resource when Glamis acquired the property from Mar West Resources in late 1998.

The current year will see a continuation of exploration, including drilling at the Palo Alto deposit, which remains open to the west and southeast. In addition, Glamis has located five new gold anomalies within three miles of the mine, which will be the target of further mapping and sampling.