Gold price slows River’s plans

A lower-Than-expected gold price has forced River Gold Mines (RIV-T) to put off some of its development plans.

The price was widely expected to rise to the US$400-per-oz. range in 1997 but has instead remained below US$350 for much of the year to date. River did not hedge gold production from its wholly owned Eagle River mine near Wawa, Ont., making he company more vulnerable to the price drop than some, said Chairman Murray Pollitt.

As a result, River has delayed construction of a 700-Metre shaft at Eagle River until late this year or early next year, and has reduced daily shifts to nine from 10 hours.

The low price also forced postponement of the development of the Moss Lake gold project, held by River’s 54%-owned unit, Moss Lake Gold Mines (MOK-T).

At the River annual meeting, Moss Lake President George Mannard told River shareholders that the northwestern Ontario deposit, which contains a resource of 60 million tonnes grading 1.1 grams gold per tonne, could not turn a profit at current gold prices. “We wait and watch, and if the price goes up, it will be nice to have it,” he said.

River also announced that ore being produced at the nearby Edwards mine of VenCan Gold (VCG-M) will be batch-Milled at River’s mill in July and August, when the Eagle River mine is shut down for development. VenCan shares half of River’s gold production, after operating costs are covered.

Pollitt said River is sticking with an earlier 1997 production forecast of 70,000 oz. gold from Eagle River and Edwards combined.