74 million Inco, Golden Knight project Golden Pond to produce in

The first gold bar from the Casa Berardi area of northwestern Quebec is scheduled to be poured in August, 1988 — seven years after the original Golden Pond discovery was made by Inco Ltd and more than four years after Golden Knight Resources entered the scene as a partner.

Both companies have agreed to build a 1,320-ton-per-day mill which will yield 60,000 oz of gold per year by processing ore from the Golden Pond East deposit at a rate of 880 tons per day. Expansion through development of other deposits on the property will enable the partners to increase gold output to 85,000 oz per year by 1991. Inco and Golden Knight hold a 60% and 40% interest in the 882-claim property respectively.

Capital costs for the project are estimated at $74 million of which the Quebec and federal governments have agreed to provide $14.5 million for construction of access roads and power transmission lines to the site. Golden Knight plans to raise its share of the capital costs via a public offering, John May, a Golden Knight director and president of Teck Explorations tells The Northern Miner.

“In essence we’ve made a production decision on the East zone. We have not addressed the West or Central zones,” Mr May adds, emphasizing the great potential of the property. “That West zone looks like a pretty good chunk of gold to us.” Reserves in the Golden Pond West zone are estimated at 4.2 million tons grading 0.19 oz gold per ton.

In total, the Golden Pond project hosts reserves of 10 million tons grading 0.22 oz gold per ton in three deposits.

For Inco, this significant reserve base appears to be the cornerstone of the company’s growing exposure to gold. At the company’s annual meeting, retiring Chairman and Chief Executive Officer, Charles F. Baird, said that the company’s projects in the U.S., Canada and Brazil “should yield over 100,000 oz of gold per annum by the early 1990s.” Responding to a question from a shareholder, Terrence Podolsky, Inco’s vice president, exploration and mineral resource development, noted that the Golden Pond mine will have a minimum “10-12 year operating life.”

For Golden Knight, the mine will cap a remarkable story — that of a Vancouver-based junior exploration concern underwritten at 30 cents per share. But unlike hundreds of other such companies which search but fail to find their Eldorado, Golden Knight did. Initial results in early 1984 prompted Teck Corp to take a position in the fledgling company by taking down 1.1 million Golden Knight shares at $1.60 per share. The issue currently trades around $19 on the Toronto Stock Exchange and Teck today has a controlling 30% interest.

Mine construction, which will be handled by Kilborn Engineering, is planned to start in June. Pellemon Inc., of Montreal will be responsible for completing the power line. Also, an underground exploration program on the Golden Pond West zone was started on April 6, Inco says. Mining operations will be under the supervision of Inco.