By merging with Rayrock Resources, Reno-based
Rayrock shareholders received 1.6 shares of Glamis and $3 in return for each share of Rayrock. Glamis paid out $52.9 million and issued 29.3 million shares, raising to 68.4 million its total number of shares. The company had to take out a bridge loan for $13 million to complete the transaction, though it paid this off in April.
Glamis completed the transaction in early March, taking control of the Dee mine, the northernmost producer in the Carlin trend, as well as the Daisy mine in southwestern Nevada, and a 66.7% interest in the Marigold mine, northwest of Battle Mountain.
The Dee mine is winding down operations in the open pit in preparation for eventual underground mining. Prior to the merger with Glamis, Rayrock had reached an agreement with
In April, Glamis approved $3.4 million in spending for an underground development program at Dee. The mine is expected to produce 46,000 oz. in 1999.
The Marigold and Daisy mines are expected to produce 30,000 oz. and 33,000 oz., respectively, in 1999.
Meanwhile, at the Picacho mine in southeastern California, Glamis has exhausted reserves. However, the mine will continue contributing production from residual heap leaching over the next two years. Permitting at the low-grade Imperial project continues.
Mining was recently suspended at the Rand mine, north of Los Angeles, Calif., though operators expect to resume production from the Yellow Aster pit in the second quarter.
Farther afield, at the San Martin gold project in Honduras, Glamis has begun a feasibility study. Capital costs for the operation are pegged at US$18 million. Recent drilling has increased the size of the resource to 41.5 million tons averaging 0.025 oz. per ton, equivalent to just over 1 million oz. gold.
At full production, the proposed mine is expected to yield up to 65,000 oz. annually at a cash operating cost under US$150 per oz.
In Chile, north of Antofagasta, the company has suspended underground mining at the Ivan copper mine in response to the low copper price.
Drilling continues at the Cerro Blanco gold project in Guatemala.
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