Heavy rains and lower-than-expected gold recoveries are being blamed for a third-quarter production shortfall at the Moris mine in Mexico’s Chihuahua state.
Cash operating costs, after gold inventory adjustments, were US$267 per oz. for the third quarter of 1998, which compares favorably with US$306 per oz. a year ago. For the nine months ended Sept. 30, cash costs averaged US$219 per oz., versus US$266 per oz. in the 1997 period. During the recent 9-month period, the company realized an average gold price of US$401 per oz., compared with a year-ago price of US$434 per oz.
Manhattan says production in third quarter was adversely affected by heavy rainfalls in July, which diluted solution flows into the plant, and to a different ore-type that was mined during the period March-to-September. “This ore was of lower grade and was less responsive to leaching,” reports the company.
The material is described as a “stockwork shale unit, which forms the transition boundary between ore and waste.” Manhattan says the mining problem was exacerbated by the inability of the site assay lab to determine grades of less than 1 gram gold per tonne. (Check assays are now being completed at an independent lab.) This resulted in the heap leaching of material that was significantly lower in grade than what was mined previously.
Production improved significantly in October and November after changes were made in operating procedures and practices.
Minable reserves at Moris are estimated at 4 million tonnes grading 1.9 grams gold and 8.75 grams silver per tonne, with a stripping ratio of 1-to-1. Six years of mine life remain.
For the third quarter, Manhattan posted a loss of US$299,000 (or 1 cents per share), compared with a loss of US$347,000 (2 cents per share) for the same period in the previous year. For the first nine months of 1998, the company lost US$100,000 on gold revenue of US$6.4 million, versus a loss of US$627,000 (3 cents per share) on US$3.3 million in the year-ago period.
For the first nine months of 1998, a cash flow of US$162,000 (1 cents per share) was generated, compared with US$96,000 a year ago.
Meanwhile, Manhattan is making headway in its effort to transfer a 75% interest in the Tambo Grande project in northern Peru. The Peruvian government issued a resolution in late December 1998 that ratifies the private investment promotion plan for the Tambo Grande project. Manhattan says this is an important step towards winning government approval to explore and develop the concessions.
The agreements covering Tambo Grande comprise an option contract and a transfer agreement; the latter is exercisable on conclusion of the option period. The company says that between the two agreements, all aspects of the project are covered, including feasibility, financing and construction.
Manhattan acquired the right to a 75% interest from the Bureau de Rocherches Geologiques et Minieres (BRGM) in the 100-sq.-km Tambo Grande concession in April 1997. The transfer of that interest has been subject to approval by the Peruvian government.
The first phase of the Tambo Grande feasibility program is to begin following the execution of the agreements. Initial exploration work will consist of a ground geophysical survey of the previously identified anomalies in the project area, followed by definition drilling of the Tambo Grande deposit and exploration drilling of other confirmed anomalies. Tambo Grande is a volcanogenic massive sulphide deposit which hosts a resource estimated at 42.3 million tonnes grading 2.04% copper, 1.47% zinc and 0.36% lead plus 37.7 grams silver per tonne.
Manhattan has 24.3 million shares outstanding, or 26.1 million fully diluted.
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