During the first 19 days of production for new owner McWatters Mining (MCW-T), the Kiena and Sigma gold mines in Quebec’s Val d’Or camp turned out 8,409 oz. gold at a cash operating cost of US$241 per oz. Total costs for the period amounted to US$269 per oz.
The production costs were lower than expected and mostly resulted from below-normal stripping ratios at the Sigma II open-pit mine.
McWatters purchased the historic mines from Placer Dome (PDG-T) in mid-September of this year, thereby becoming the third-largest gold producer in Quebec. At the same time, the junior launched a $23-million investment program aimed at cutting operating costs, enhancing production flexibility and extending the life of the two mines.
By next summer, McWatters hopes to increase daily underground production at Sigma to 1,000 from 700 tonnes. By the year 2000, production is expected to reach 1,500 tonnes per day.
A major drilling program has started between levels 30 and 37 in the Lamaque zone at Sigma. This work is focused on delineating a large block of reserves and resources in Zone 46, and at locating the depth extensions of the Main Plug and East Plug zones, as well as Veins 44, M and 35.
In the last quarter of this year, McWatters expects to produce 45,000 oz.
gold at a cash operating cost of US$257 per oz. Efforts to cut costs further will continue during this period.
For the third quarter, McWatters reported net earnings of $397,335 on revenue of $2.4 million, reflecting the first 19 days of operation of the Kiena and Sigma mines.
Placer Dome was paid US$55 million for the Val d’Or operations, of which US$45 million was paid in cash and US$10 million through the issuance of 7.3 million shares of McWatters. The junior also obtained a land package of 18 properties covering 8,314 in the historic mining camp.
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