Rosebel resumes milling (November 25, 2005)

Mill operations at Cambior‘s (CBJ-T, CBJ-X) flagship Rosebel open-pit gold mine in Suriname have resumed at about 90% of capacity following a leak in the foundation of the operation’s thickener unit.

The mill had been shut down for around 8 hours during an initial assessment of the problem.

The milling process has since been modified such that the slurry is bypassing the thickener and passing directly from the grinding circuit to the leaching circuit. As a result, recoveries are currently about 4% lower than the 94% rate before the leak.

Cambior said the lower throughput and recovery rate would see its gold output slip by about 2,300 oz. during repairs, but that production during the first half of the fourth quarter was around 5,300 oz. ahead of plan.

“It will have some impact on production but we were ahead of plan until this morning, so we have a little leeway to compensate,” said Cambior chief executive Louis Gignac during a short conference call soon after the leak.

Gignac said the leak was a “very localized problem” and that it had been contained in the safety berms and ponds at the mill site. “There’s been no impact on the environment whatsoever,” he added. “The thickener has been emptied and there should be no further leakage.”

The company expects repairs to be completed by Dec. 9.

Mill throughput had been running around 21,000 tonnes per day before the leak.

During the third quarter, Rosebel produced 82,000 oz. of gold at a mine operating cost of US$226 per oz., up from the 79,000 oz. poured at US$195 apiece in the corresponding period of 2004. Cambior attributes the increase in production to higher mill throughput, which came thanks to the elimination of some processing bottlenecks and a circuit expansion during 2004.

Rosebel entered commercial production in the first quarter of 2004 and went on to produce some 273,700 oz. at US$170 per oz. in 11 months. Production for 2005 was projected at 320,000 oz. at US$193 per oz.

So far this year, Cambior has produced a total of 496,800 oz. of gold at US$284 apiece; the company previously said it was on track to produce 640,000 oz. during the entire year.

Shares in Cambior were a dime, or 3.8%, lower at $2.56 in afternoon trading in Toronto following the news on Nov. 21. The shares rebounded after the resumption of milling was announced on Nov. 25, and were 12 better at $2.74 in mid-afternoon trading. The shares are off 17% so far this year, and trade in a 52-week range of $1.94-$3.82.