President bullish Lacana looks to a good year

He may be new to the job, but that’s no reason Gil Leathley should remain a stranger. The new president of Toronto-based Lacana Mining believes in getting out to meet his workers.

“I spend about 40% of my time making sure I visit the properties,” Mr Leathley, 49, told The Northern Miner in an interview.

Among other locations, he’s recently been to Mexico to visit the silver mines, Nevada to familiarize himself with the gold-mining operations, western Canada to see the oil and gas fields and Quebec to witness first hand Lacana’s mica- producing facilities.

“I think it’s important you maintain contact with the people who make the money,” he said.

Mr Leathley, a native of Scotland, was named last month to head Lacana after Royex Gold Mining bought an interest (36% at the time) in the company in February of this year.

Royex has since sold its 51% interest in Mascot Gold Mines to Lacana in a deal which dropped Royex’s share in Lacana to 26% but which could boost the parent firm’s interest in Lacana to 44% if a share- conversion scheme goes ahead.

In addition to running Lacana, Mr Leathley remains senior vice- president operations of both Royex and International Corona Resources and chairman of Renabie Gold Mines.

After recording a net loss of $983,000 in 1985, Lacana rebounded last year and will be reporting a profit for 1986. “It will be quite a good year,” Mr Leathley said, although he declined to reveal any figures pending notification of shareholders. The company has scheduled a special shareholders’ meeting for the end of this month, with the annual meeting set for June.

(For the first nine months of 1986, Lacana reported net earnings of $5.8 million on revenues of $26 million.)

A recent report by Morgan Grenfell Securities has Lacana announcing 1986 operating profits of $6.7 million for its mining division alone (excluding Mexican operations). The Dee gold mine in Nevada is expected to announce a total production of 49,000 oz for the year (Lacana’s share would be 14,000 oz) and the Pinson and Preble gold mines, also in Nevada, are expected to have a combined production of 85,000 oz (Lacana’s share would be 22,000 oz).

The mines of the Torres complex in Mexico, in which Lacana has a 30% interest, are estimated to have produced for the company one million oz silver and 14,000 oz gold last year, with net earnings totalling $2.3 million.

Lacana’s Suzorite Mica operations in Quebec reportedly earned the company $1 million in 1986.

And the company’s oil and gas operations in western Canada reportedly netted Lacana 385,000 barrels of oil and 1.2 million cu ft of natural gas last year, compared with 274,000 barrels and 1.4 million cu ft of gas in 1985. New producing mine Including Mascot’s Nickel Plate gold mine near Hedley, B. C., which is expected to be in full production by June, but excluding Mexican operations, Lacana is expected to produce more than 100,000 oz gold in 1988 (more than doubling its pre-Mascot total) at an average production cost of $150(US) per oz, Morgan Grenfell reports.

Oil and gas operations are expected to net the company 450,000 barrels of oil and 1.2 million cu ft of gas this year, while mica production is expected to increase and boost that division’s revenues to $1.5 million. The silver mines in Mexico are expected to produce a 1987 volume similar to last year’s (with recently improved silver prices increasing company coffers).

Exploration continues at several sites, including the low grade gold and silver Santa Fe property (in which Lacana has a 100% interest) in Nevada, where indicated reserves to date total 8 million tons at an average grade of 0.04 oz gold per ton. (Heap leaching is the prescribed method of production.)

Indicated reserves at the Sulphurets project (Lacana has a 30% interest) in northwestern British Columbia are approximately 500,000 tons grading 0.4 oz gold.

At the Musselwhite property (Lacana’s interest is 17%) in northwestern Ontario, indicated reserves stand at 1.8 million tons grading 0.2 oz.

Exploration work also continues at the Elmtree gold deposit (Lacana has a 42% interest) in New Brunswick.

Mr Leathly takes over control of a diversified resource company which has been associated for many years with Dr W. H. Gross, who continues as a director and a member of the company’s executive committee. Early mine surveyor

Trained as a mine surveyor as a young man with the National Coal Board in Scotland, Mr Leathly worked in the mines in Zambia with Anglo American, in Scotland with Ritchie’s Equipment (rock excavation contractors), in South America with Guyana Bauxite (formerly Demerara Bauxite — Alcan), in British Columbia with Cassiar Asbestos, and in British Columbia and in northern Ontario with Noranda Inc.

Prior to joining the Royex- Corona group in 1986, Mr Leathley was mine manager of Noranda’s Hemlo division in northern Ontario.

He said he’s spent most of his working life in mining towns and is enjoying Toronto. (He lives just west of the city and is learning to cope with the rush-hour traffic).