MINING MARKETS & INVESTMENT NEWS — Canaccord sees strong year for Placer Dome

Larry Strauss of Canaccord Capital expects that Placer Dome (PDG-T) will have a strong 1998. Accordingly, the mining analyst is continuing to rate the company a buy.

Strauss notes that the major plans to increase production and lower production costs. Specifically, gold production is expected to rise to 2.7 million oz. this year, up from its previous estimate of 2.6 million oz., while cash costs could fall to US$175 per oz. gold from US$185 per oz. At the same time, Placer Dome aims to reduce total production costs to US$245 per oz. from US$260.

The major turned out 635,000 oz. gold at a cash production cost of US$185 per oz. in the first quarter, compared with 535,000 oz. at US$225 per oz. a year earlier.

“The company expects production to continue to increase and costs to decrease as the year progresses,” Strauss writes, “with the most significant improvement [over Placer’s previous estimate] likely to occur at Granny Smith [in Western Australia] as the surprisingly higher ore grades encountered in 1997 continue to be mined in 1998.”