Panamanian projects move forward — Campbell completes permitting for Cerro Quema gold mine

With government permits now in hand, Campbell Resources (CCH-T) is proceeding with development of its Cerro Quema heap-leach, open-pit operation in Panama.

Cerro Quema comprises two epithermal gold deposits, La Pava and Quema-Quemita, which host 5.9 million tonnes grading 1.18 grams gold per tonne and 2.9 million tonnes grading 1.11 grams gold, respectively, for a combined total of 330,000 oz. gold.

Both deposits will be subjected to conventional open-pit mining at stripping ratios of 0.64-to-1 and 0.40-to-1 for La Pava and Quema-Quemita, respectively. Using heap-leaching technology, the company anticipates a gold-recovery-rate of 86% on a 30-day leach cycle.

Campbell will develop Cerro Quema in two stages, with La Pava being mined first. Pre-stripping of La Pava is expected to commence by year-end, with commercial production scheduled for the second quarter of 1998. Currently, the company is nearing completion of an access road to the site and will shortly begin working on the leach-pad site and haulage roads.

Based on a feasibility study completed in November 1996, reserves will provide for a mine life of six years at an annual production rate of 50,000 oz. gold. Total capital costs for the project are pegged at US$32.8 million and will be provided by internal company funds. Cash operating costs are expected to fall to about US$180 per oz.

Once in production, Cerro Quema will represent the company’s third source of gold production. Currently, the company operates the Santa Gertrudis open-pit, heap-leach mine in Sonora state, Mexico, and the Joe Mann copper-gold mine near Chibougamau, Que. In 1996, gold production from these two operations amounted to 124,800 oz., with a similar amount expected to be produced in the current year. With the addition of the Cerro Quema mine, production for 1998 is expected to rise to 180,000 oz.

In 1996 Campbell earned $9 million (6.2 cents per share) on revenue of $67.1 million, compared with $10.4 million (8.6 cents per share) on $67.4 million in 1995.