Muscocho still sorting out Magnacon start-up problems

“Start-ups are never fun times,” said Steve Brunelle, vice-president of corporate affairs.

The mine, projected to produce 80,000 oz gold per year, was officially opened at the end of June by 25%-owner Muscocho, 50%-owner Flanagan McAdam Resources (TSE) and 25%-owner Windarra Minerals (TSE).

The daily production rate is about 600 tons per day, as was planned. The rate will eventually be increased to 800 tons per day, the mill having been designed to treat that tonnage.

The gold recovery rate, Brunelle said, is in the 90% range. Initial feed came from low grade development muck stockpiled on surface. The company has been supplementing the surface muck with underground ore. Because of the current relatively low price of gold, Brunelle said the company has been using more underground feed than expected.

The project experienced a 4- month delay at the beginning of 1989 because of problems associated with hooking up the hydro- electricity.

Reserves at Magnacon stand at 1.4 million tons grading 0.248 oz gold per ton. The grade is expected to increase as the underground workings are mined.

Meanwhile, at Muscocho’s other Wawa-area gold producer, the Magino, Brunelle said the mine made money in August and probably (the monthly figures were not available at the time of the interview) showed a profit in September.

Pointing to the current price of gold, in the $360-370(US)-per-oz range, Brunelle said, “It hasn’t been very helpful in bringing in a new gold mine.” Magino, officially opened in October, 1988, is owned 50% by Muscocho, the operator, and 50% by McNellen Resources (TSE).

In a recent press release, J. T. Flanagan, president of both Muscocho and McNellen, said mine costs have been approaching the $65-70-per-ton range as forecast two years ago.

Company officers, Flanagan stated, “regard this as a considerable achievement and anticipate profitable future operations even at the relatively low gold prices now prevailing.”

Output at the Magino mine has increased each quarter this year. At the end of September, total production for the year stood at 16,915 oz.

Brunelle said production costs should decline at both the Magnacon and Magino mines, as the companies are able to place more emphasis on reducing expenses.

]]>