Poor third-quarter results have prompted
In mid-October, William announced that its problem-plagued Jacobina mine would remain open for 10 more months provided operating costs remained under US$300 per oz. But it has since been learned that, during the third quarter, the mine produced 11,367 oz. at US$455 per oz., with no sign of improvement. As a result, operations are now scheduled to cease in January 1999.
The mine has had to endure various problems of late, including low-grade ore and the breakdown of one of its two ball mills, resulting in lower-than-forecast production.
Difficulties are also reported at the company’s flag-ship operation, the Bjorkdal open-pit gold mine in northern Sweden. Production in the recent quarter topped 17,601 oz. at US$231 per oz., against a budget of 26,900 oz. at US$175 per oz. The lower results reflect the treatment of low-grade coarse ore screened off previously to augment head grades. This material, however, has averaged more than twice the estimated grade, at between 1.6 and 1.7 grams per tonne, and will continue to be processed until mining in the pit resumes next month.
In neighboring Finland, the company’s Pahtavaara mine produced 6,843 oz. in the recent quarter at a cash cost of US$191 per oz. Similar costs are expected in the current quarter on production of 9,000 oz.
Pahtavaara was originally scheduled to shut down last June, but sufficient reserves have since been outlined to sustain production possibly into the new year.
In all, William cranked out 35,811 oz. gold at an average cash cost of US$295 per oz. in the recent third quarter, compared with year-ago production of 59,727 oz. at US$249 per oz. (Last year’s third quarter also included production from two now-closed mines in Australia.)
William has none of its production hedged, having closed its remaining 1998 and its entire 1999 forward sales last month (T.N.M., Oct. 26-Nov. 1/98).
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