Bond sells Yuba operation, plans new mine in Uruguay

In the company’s latest divestment, BIG has agreed to sell its wholly owned subsidiary, Bond Gold Placer, to Denver-based Western Gold Exploration (WestGold) for $16 million(US) and an undisclosed production royalty. WestGold is a 50%-own ed affiliate of Inspiration Resources (TSE).

Last month, BIG sold its Australian mining subsidiary, Bond Gold Australia to Australian miner Poseidon Ltd., in a complicated transaction involving a combina tion of shares, gold notes and cash. That deal effectively reduced Bond’s direct influence over the Super Pit gold mining development in Kalgoorlie, which will eventually create a hole big enough to be seen from the moon.

An Australian subsidiary of San Francisco-based Homestake Mining (NYSE) is a 50% partner in the Super Pit and “Golden Mile” operations, which are ex pected to yield about 800,000 oz of gold annually at the cost of $260 per oz by the early 1990s.

BIG is controlled by the flamboyant Australian entrepreneur Alan Bond, who has been recently reshuffling a number of his assets in a diverse corporate empire, including the multinational, multi- faceted Bond Corp., with interests in brewi ng, real estate, newspaper and television companies.

The recent sale of BIG’s American subsidiary, Bond Gold Placer, to WestGold includes a two-thirds joint venture interest in the Yuba gold dredge operation nea r Marysville, Calif. That operation produced a total of 23,349 oz of gold in the fiscal year 1989.

A spokesman for BIG said the company had been trying to sell its interest in the Yuba operation for at least a year, but was unable to close a deal with anoth er buyer. “The Yuba operation did not fit into the long-term goals of the company,” said BIG chief executive Alan Birchmore. “The company will continue to focus on expan ding its production from open pit and underground operations.”

Blair Howkins, managing director of WestGold, said his company intends to increase drilling at the Yuba operation to improve mine planning and productivity. W estGold’s estimate of proven and probable reserves at the Marysville operation i s about 600,000 oz. BIG previously estimated contained-gold reserves at 317,400 oz. The Yuba property has been mined periodically since 1904.

In other news, BIG has recently received exclusive rights to develop a new gold-mining operation on its Mahoma property in Uruguay. That authoriza tion paves t he way for the development of a 30,000-oz-per- year gold mine at Mahoma, 80 mile s from the country’s capital, Montevideo. Feasibility studies have been complete d and a project review is in progress by Toronto- based engineering firm Watts, Griffis and McOuat. A production decision is pending.

The contemplated project initially comprises a series of small open pits to be followed by underground mining. The ore will be processed in a conventional mill involving gravity separation and carbon-in-pulp or carbon-in-leach recovery. I nitial production capacity is planned to be 330 tons per day, producing about 30 ,000 oz of gold per year. The company estimates current reserves for Mahoma at 3 63,000 tons with a diluted average grade of 0.26 oz gold per ton.

In March, the government of Uruguay signed a foreign investment agreement with BIG guaranteeing the company’s right to remit profits and capital, and freely market its gold production. The government also granted certain tax incentives an d has authorized BIG to finance a portion of the Mahoma project through a Urugua yan debt conversion program.

“The investment climate in Uruguay is excellent,” said BIG’s Alan Birchmore. “We look forward to participating in the development of the mining industry in Ur uguay.”

In the fiscal year ended June 30, BIG reported total gold production of 477,340 oz at an average cash cost of $204 per oz. This represents a one-third increas e in production from last year’s level. The company said the average cash cost f or its North and South American mining operations was $161 per oz during the lat est fiscal year.

With the recent completion of its Bullfrog open pit mine in Nevada, Bond expects its total gold production will be near 600,000 oz this year fro m all operatio ns worldwide.

BIG is 58%-owned by Alan Bond’s family holding company, Dallhold, the world’s biggest private gold miner.

Bond became somewhat of a national hero in Australia, following his America’s Cup sailing triumph in 1984, but the entrepreneur came under harsh criticism in Australia earlier this year for allegedly bribing a government official and enga ging in other questionable business practices.

Despite recent criticisms over his corporate debt burden, and business ethics, Bond maintains he is a misunderstood visionary practicing the most modern business techniques. He previously told reporters, “We don’t de al in paper profits, b ut are creators and builders of wealth.”

Bond’s only producing Canadian operation is its small but high grade Golden Patricia underground mine, 40 miles west of Pickle Lake, Ont. The Golde n Patricia mine produced 72,000 oz of gold in its first full year of production from ore av eraging 0.6-0.7 oz gold per ton. The company said cash costs at the mine average around $251 per oz.

BIG is a Cayman Islands company, the shares of which are listed in New York and Toronto. The company’s head office is in London with principal oper ating compa nies in Denver and Perth.

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