Mascot reduces debt

The bank debt for Mascot Gold Mines’ (TSE) Hedley, B.C., gold project was reduced by $10 million to $46.4 million at the end of the second quarter.

During the three months ended March 31, Mascot produced and sold 31,940 oz of gold for total revenue of $18.1 million and operating profit (before writeoffs) of $8.3 million. Tonnage and grade figures were not available from the company.

Under terms of the Canadian Imperial Bank of Commerce loan, Mascot must pay back the first $30 million by using 100% of cash flow from production for debt repayment, for up to a maximum of 18 months.

Modifications to the mill circuit are continuing. A new hopper clarifier has been installed and expansion of the crusher is proceeding on schedule. The gyratory crusher will be operational in July and additional drum filters will be ready by September. Alternatives to the present hydrogen peroxide tailings treatment system are being studied and a more cost-efficient process will be installed.

An adit being driven in the southwest area of the mine near the Horsefly, Terrier and Bulldog workings has advanced 1,800 ft from the portal with eight sub- drifts, crosscuts, raises, drill stations and sub-drifts driven from the level. The adit will allow Mascot to explore from underground, the mineralized beds which are geologically similar to ore grade beds now being mined in the South pit area. Eight beds with ore grade intersections have been identified to date. Among the higher assays were 0.664 oz gold over 2.5 ft, 0.485 oz over 11 ft, 0.479 oz over 8 ft and 0.434 oz over 18.5 ft. One 60-ft intersection averaged 0.2 oz.