Campbell had restarted mining at Joe Mann in April 2000 only to suspend activity in November 2000 owing to cash costs of US$330 per oz. gold. The company blamed the high costs on a combination of ground-control problems and an unsuccessful changeover in mining methods.
After last year’s suspension, Campbell responded with a comprehensive review of the Joe Mann operation, including mining methods and potential for expanding the reserve base.
In 2000, Campbell largely replaced the mine’s traditional long-hole and shrinkage methods with costlier cut-and-fill methods. However, plans for next year call for Campbell to resume its emphasis on long-hole and shrinkage mining.
Reserves and resources, incorporated into the new mining plan, are pegged at 630,000 tons grading 0.287 oz. gold per ton gold and 0.25% copper, to be mined over a 33-month period. Overall, resources stand at 1.7 million tons grading 0.326 oz. gold and 0.28% copper.
Gold-copper mineralization is hosted by quartz veining in three laterally continuous shear systems of Archean age. Most of the reserves are contained within the east-west-trending Main vein, north of shaft 2, and the South vein, 350 ft. south of the Main vein.
The South vein has the more difficult ground conditions, necessitating a continuation of the cut-and-fill method in this portion of the mine.
Mining is to resume in the first quarter of 2002 at a daily production rate of 1,040 short tons, based on a 5-day-per-week work schedule. Annual production will thus reach 260,000 tons, yielding 65,000 oz. gold, 22,000 oz. silver and 1.2 million lbs. copper.
As was the case previously, ore will be trucked 40 miles north to Campbell’s Camchib mill for processing, where recovery rates are in the order of 93% for gold and 95% for copper. The copper-gold concentrate from the mill will continue to be sent by rail to Noranda’s Horne smelter in Rouyn-Noranda, Que.
The gradual recall of some 150 Joe Mann employees, required for the mining and treatment-plant operations, began in mid-October. Prior to the suspension, some 266 people were employed at the mine.
To date, the deposit has been mined along a 3,000-ft strike length and to a depth of 2,350 ft. The deposit remains open at depth.
In terms of ore development, the 2001 plan calls for a 30-month, $7.5-million program that will include 20,000 ft. of drifting, 10,000 ft. of raising and 11,500 ft. of sub-levels.
Another $5 million will be spent exploring the Main vein and the West zone to provide for work sites in the Main vein between the 2,350- and 3,400-ft. levels. Some mining was carried out in the West zone in 1999, but the results were disappointing.
Of note, exploration during 1998 on the 2575 level encountered a new zone north of the Main vein and 1,000 ft. east of the production shaft. The new zone may be spatially and genetically related to a large quartz-feldspar porphyry dyke. As well, drilling appears to have confirmed an extension of the hangingwall of the Main zone between the 2750 and 3100 levels.
Campbell has also arranged to reduce a sliding-scale royalty due to
During the summer, Campbell underwent a major corporate shake-up that culminated in the merger of Campbell with two more juniors active in the Chibougamau area:
Campbell’s head office moved to Montreal from Toronto, and MSV’s and GeoNova’s president, Andre Fortier, became president of the new Campbell.
As for Campbell’s Latin American assets, the company has written down the value of its suspended Santa Gertrudis gold project in Mexico’s Sonora state and its Cerro Quema gold property in Panama. In September, Campbell granted a 6-month option to
Campbell’s net assets now stand at $44 million, including cash and short-term deposits of $2.3 million. Total current liabilities amount to $5.1 million.
Following the merger, the number of outstanding Campbell shares rose to some 30.4 million.
For the nine months ended Sept. 31, 2001, Campbell posted a net loss of $4 million (or 19 per share) on sales revenue, compared with a loss of $13.1 million (84 per share) on sales revenue of $10.8 million during the corresponding period last year.
Campbell says that the 9-month results reflect the closure of Joe Mann as well as an indemnity payment in lieu of notice to the mine’s salaried employees who were working when operations were suspended in November 2000.
The Joe Mann deposit was discovered in 1950 and then mined until 1975, when high costs forced its closure. Campbell became involved in the property in the mid-1980s, when the mine shaft was dewatered and the company undertook an exploration program that proved up 800,000 tons of new reserves.
Production resumed in 1987 and a new shaft, the number 2, was sunk to a depth of 2,050 ft. In 1992, this shaft was deepened to a depth of 2,676 ft. in order to open up access to four new levels.
During 1997-98, Campbell spent $13 million deepening the no. 2 shaft to 3,757 ft. in order to open up six more levels. However, cash operating costs remained high because of ground control problems and excessive dilution.
To remedy the problems, Campbell suspended mining in 1999 and then developed what proved to be an ill-fated plan that centred on switching the mining method to predominantly cut-and-fill.
Campbell also holds a 26% interest in Copper Rand Corporation, a company created to facilitate a $45-million financing that would lead to development of the Copper Rand 5000 project in Chibougamau. The remainder of the project is held by the Solidarity Fund QFL (28%), the Socit de developpement de Baie James (23%) and Soquem (23%). Campbell is the operator.
At Copper Rand, the partners are modifying a hoist system, and plans are under way to deepen the no. 4 shaft, with Ross Finlay having been awarded the shaft-deepening contract.
Resources are pegged at 1.9 million tons grading 1.55% copper and 0.097 oz. gold per ton, and the resource base could potentially be expanded.
In late November, Campbell’s New York listing was suspended for failure to meet minimum listing requirements. Next, the company will likely be delisted from New York. Campbell continues to trade on the Toronto Stock Exchange and says it will seek a new listing elsewhere in the U.S.
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