Copper and silver production at GlobeStar Mining’s (GMI-T) Cerro de Maimon open pit mine in the Dominican Republic will dip slightly in 2010 but gold production will be more than twice as high, the company reported today.
GlobeStar expects to produce 24 million lbs. of copper in concentrate this year, down from 25.3 million lbs. in 2009.
Silver production is forecast to be 480,000 oz. compared to last year’s 515,000 oz., while gold production will increase to 15,000 oz. from 6,100 oz. in 2009.
GlobeStar started production in late 2008 after building a 1,300-tonne-per- day sulphide plant and a 700- tonne-per-day oxide plant to process ore from the Cerro de Maimon deposit.
The bulk of GlobeStar’s production comes from its sulphide plant – all of the copper, 6,000 oz. of gold and 380,000 oz. silver.
The company had to deal with a few operational problems during the first year of production, mostly ore handling problems due to heavy rains, which slowed down production. Midway through the year, the company cut its production forecast from 29 million lbs. copper to 25 million lbs. last year and is keeping with a slightly lower production goal this year, too.
GlobeStar expects production costs, which include treatment, refining and shipment charges to market to be about US95¢ per lb. copper after byproduct credits. Added to this year’s production costs is a water treatment charge starting in the second quarter.
The company is planning to spend US$4.2 million on tailings pond construction, about $1.4 million for critical spares and US$1 million on plant and equipment.
GlobeStar also plans to pay down its US$37.5 million debt facility with Nedbank by US$9.4 million this year. The company says it has about US$16.3 million in unaudited and restricted cash.
On the exploration front, GlobeStar is spending about US$3.5 million around Cerro de Maimon, which is a part of a 328 sq. km land package in hopes of finding ore that could extend the nine-year mine life. GlobeStar is also focusing on the Bayaugana district about 60 km east of Cerro de Maimon where there is an inferred resource of 4.9 million tonnes grading 0.98% copper, 2 grams gold per tonne and 5.1 grams silver for about 300,000 oz. gold.
GlobeStar is also considering whether it should reinitiate development of its Cumpie Hill nickel laterite project just 4km from Cerro de Maimon. The project is located about 10 km from Xstrata’s (XSRAF-O, XTA-L) Falcondo operation, which is on care and maintenance. Xstrata is doing a study to see if it can find a cheaper energy source than oil to run its operation.
GlobeStar and SOQUEM plan to spend about US$3.2 million on their lithium joint venture project in Quebec. GlobeStar holds 60% and SOQUEM holds the remainder in the Moblan project. The companies have started a 15,000-metre drill program to expand the inferred resource of 5.3 million tonnes grading 1.5% lithium oxide. However, GlobeStar says its efforts on this project haven’t been reflected in its market capitalization. The company hinted that it would consider selling its stake sometime this year.
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