Franco-Nevada plans Ken Snyder expansion

The recent upward spike in gold prices has prompted Franco-Nevada Mining (FN-T) to draw up plans to boost production at its new Ken Snyder gold mine in northern Nevada.

To boost mill throughput to 1,000 tons per day from its current 650 tons, the company will modify and improve the existing crushing, thickener and Merrill-Crowe circuits and install a 350-ton-per-day verti-mill grinding circuit. Underground development will be accelerated to match the increased mill throughput.

Franco-Nevada cautions that the decision to use this additional capacity will depend on whether or not improved gold prices are sustained. If prices continue to hold, and once the US$2-million expansion program is completed in mid-2000, gold production will increase to 350,000 oz. from its current level of about 250,000 oz. Cash costs are about US$80 per oz., with total costs ringing in at US$120 per oz.

Officially opened earlier this year, the Ken Synder mine is based on a minable reserve of 2.7 million tons averaging 1.12 oz. gold and 12.82 oz. silver per tonne. Total reserves and resources are roughly equal to 8 million contained ounces gold, with exploration only beginning in several prospective areas.

Franco-Nevada merged with Euro-Nevada earlier this year to create the fifth-largest gold company in the world. The company holds more than 60 royalties spanning six countries with direct or royalty land interests exceeding 5 million acres. A royalty on the Goldstrike property operated by Barrick Gold in Nevada remains the cornerstone and the single-largest profit engine. Franco-Nevada also has more than $1 billion in cash and investments with which to make further acquisitions, particularly in the gold mining sector.