Miramar hits production targets (April 22, 2002)

Vancouver – With merger plans in full swing, the first quarter of 2002 saw Miramar Mining (MAE-T) produced 31,749 oz of gold at a cash cost of US$240 per oz from its two mines near Yellowknife.

The Con and Giant operations hit Miramar’s anticipated production targets, improving on last year’s first quarter output of 29,177 oz of gold at a cash cost of US$262 per oz.

“During the first quarter, Yellowknife operations were well on their way to establishing a solid base for a very productive year,” says Miramar’s President, Tony Walsh. “However, the temporary suspension of the autoclave caused by the collapse of the roof at the oxygen plant will have an adverse impact to the second quarter production profile.”

The Con Mine contributed 77,200 tonnes grading 11.5 grams gold per tonne, and the Giant Mine added 17,270 tonnes grading 12.13 grams gold. Both ores were processed at the Con mill.

In mid-March, the roof of the building containing the plant which produces oxygen to operate the autoclave at the Con Mine collapsed. As a result, autoclave operations have been temporarily suspended. This incident does not affect the production of gold from the free milling operations at the Con Mine but does effect the treatment of the refractory ores. Miramar is working with the outside oxygen supplier to repair the oxygen plant and expects the plant to be working by June. Costs are expected to exceed $2 million. In the meantime, refractory ores continue to be processed with the concentrates stored for the second half of 2002.

The stockpiling of concentrates will result in a temporary increase in inventories and a decline in cash balances. Miramar still expects to meet its production targets for 2002 of 130,000 oz.

Plans to merge Miramar with fellow junior Hope Bay Gold (HGC-T) are moving forward.

“We have now signed the formal merger agreement and are proceeding towards our objective of creating a larger, more liquid gold company that owns 100% of the highly prospective Hope Bay gold project,” adds Walsh.

Under the proposed deal, Hope Bay shareholders would receive 0.263 of a Miramar share for each share tendered. Miramar’s number of shares outstanding would increase to 102.7 million. Hope Bay Gold plans to hold a shareholders meeting in late May to vote on the transaction. The approval of 66% of the shareholders are required for the deal to go ahead.

The partners have three rigs turning on the project and plan to spend $8 million in 2002. The program will include 100 drill holes to delineate and expand the Doris Hinge zone so that a feasibility study can be completed by year-end.

“Now that both drilling and permitting have commenced at Hope Bay, we are advancing the high grade, near surface Doris Hinge Zone towards a production decision,” says Hope Bay’s Chief Executive Officer, David Fennell. “In addition, our exploration activities provide excellent opportunities for the discovery of entirely new gold deposits as part of our on-going efforts to fully evaluate the tremendous exploration potential of the Hope Bay belt.”

Earlier this year, resources at Hope Bay were increased to 10 million tonnes grading 13.3 grams gold per tonne. The resource is spread among the Boston, Doris and Madrid deposits.

A subsequent independent scoping study on the Doris area alone concluded that the high-grade Hinge zone can support a stand-alone operation with a capital investment of $26.7 million. A stockpile of 9,000 tonnes of Boston material would expand the Hinge zone resource to the tune of 471,600 tonnes averaging 18.5 grams gold.

The exploration part of this year’s program is also underway. Some 4,000 metres of diamond drilling and 2,800 metres of reverse circulation drilling are budgeted to test new gold targets. The diamond drill is currently turning in the Omayok area where alteration, folding and rock sampling indicates the promise for additional mineralization. The reverse circulation drilling has started in the Twin Peaks area, at the north end of the Hope Bay belt. A Timiskaming unconformity-type target that may be related to an intrusive syenite stock is the first target.

On the permitting front, a preliminary project description has been submitted to the Nunavut Water Board and the Kitikmeot Inuit Association for the development of the Doris Hinge Zone. After review, the document will be forwarded the Nunavut Impact Review Board.

“We look forward to working with all the stakeholders in seeing this project pass through the permitting process efficiently so that we can all see the benefits of this project,” says Walsh. “We plan to engage the local communities and to work with the various stakeholders to maximize the benefits to the local Inuit, maximize their involvement in the project on a cost and quality competitive basis and to minimize the environmental impact.”