North American gold companies to become million-oz producers

Homestake Mining (NYSE), which will approach one million oz this year, will definitely join the club in 1990 with projected output of almost 1.16 m illion oz.

While new to North America, million-ounce gold producers are no novelty in South Africa, where a half-dozen companies will exceed that mark in 198 9. In fact, two South African producers, Freegold and Vaal Reefs, will have output this year of 3.3 million and 2.5 million oz, respectively.

Following the 1987 amalgamation of Placer Development, Dome Mines and Campbell Red Lake Mines, Placer Dome became the largest gold producer outside of South A frica. Besides gold, it is involved in the mining of copper, molybdenum, silver and mercury, and in the production of oil and gas.

Three of its six Canadian mines — Campbell, Dome and Detour Lake — placed among the country’s top eight gold producers in 1988. Analyst Paul Esqu ivel of the securities firm Yorkton estimates the company’s Canadian gold output in 1989 will represent about half of its total world production. Active in t he United S tates and Mexico, Placer is well placed in Australia and Papua New Guinea throug h a 78.5% interest in Placer Pacific. Among the large gold projects “down under” in which it is involved are the Kidston and Big Bell mines in Australia, and the Misima mine in Papua New Guinea.

Large developing projects in which Placer has an interest include the Granny Smith in Australia and Porgera in Papua New Guinea. It also has an inte rest in th e developing gold-silver La Coipa project in Chile.

The growth of Newmont Gold, shares of which were first offered to the public in 1986, is a testament to the perseverance of management in the face o f a potent ially crippling debt load, about $1.2(US) billion at the end of 1988), and the u ncertainty of its corporate ownership. The key to Newmont’s continuing success i s its property holdings along the exciting Carlin belt in Nevada.

Newmont Mining (the parent) is owned 49% by Consolidated Gold Fields, which was recently taken over by British conglomerate Hanson. Speculation is rampant Han son may sell Newmont in order to help pay for its acquisition of Gold Fields. (I n 1987, Newmont fought off a hostile takeover bid and last year it played a cent ral role in an unsuccessful takeover bid for Gold Fields.)

The bulk of Newmont’s 1988 production, securities firm Shearson Lehman Huttonreports, came from four Nevada mines: Gold Quarry, Rain, Genesis and Blue Star. Gold Quarry, an open pit, heap leach and mill circuit operation, turned out 630, 600 oz last year and will produce a projected 865,000 oz in 1989.

Homestake has an interest in a half dozen gold mines in the United States, including the venerable Homestake mine in South Dakota which went into production i n 1876. Mine output for 1989 from the South Dakota operation is projected to be 400,000 oz.

In Australia, the company is active through an 80% interest in Homestake Gold, which has a 50% interest in the Super Pit project on Kalgoorlie’s Golden Mile.

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