High River gets record production, lower costs

Approaching the end of its fourth year as a producer of the yellow metal, High River Gold (HRG-T) has reported record output at reduced cash costs from both its major operations.

The New Britannia mine in Snow Lake, Man., operated by High River’s equal partner, TVX Gold (TVX-T), produced 26,050 oz. in the third quarter, compared with 25,825 oz. a year ago. Also, cash production costs between the two periods fell to US$216 from US$230 per oz.

For the 9-month period ended Sept. 30, the mine produced 73,185 oz. at US$220 per oz., compared with 73,855 at US$240 in the year-ago period.

New Britannia realized an average gold price of US$273 per oz. during the quarter and US$308 in the first nine months.

New Britannia has been hoisting more ore at slightly lower head grades this year, and mill recovery has improved marginally. Developed reserves remain steady as definition drilling replaces mined ore.

In southeastern Siberia, production at the Irokinda and Zun-Holba gold mines operated by Buryatzoloto (BYZJY-Q), in which High River owns a 23% interest, also hit records. Third-quarter output reached 35,694 oz., compared with 32,951 oz. in the corresponding period of 1998. The first nine months of 1999 saw 77,498 oz. produced, compared with 76,453 oz. a year ago. Cash costs are expected to be less than US$188 per oz. for the quarter and less than US$181 for the nine-month period.

The Buryatzoloto mines have a 15,000-oz. put option at US$375 per oz., maturing in the fourth quarter of 1999. The company also has a small hedge position maturing between 2000 and 2004, with forward sales of 7,220 oz. in 2000 decreasing annually to 4,840 oz. in 2004.