Zinc price, higher output add strength to Cambior — Work stoppage at Omai gold mine in Guyana ends after three days

Increased capacity at the Omai gold mine in Guyana and improved prices for zinc in the first half of 1997 combined to increase net earnings at Cambior (CJB-T) to US$3.3 million, compared with US$2.1 million in the first half of last year.

The company reported revenue of US$155.5 million in the 6-month period ended June 30, up from US$134.7 million in the first half of 1996. For the second quarter of 1997, revenue was US$74.6 million, compared with US$74 million in the comparable period of 1996, and net earnings slipped to US$200,000, from US$1.1 million.

The weaker second-quarter results were ascribed to higher exploration expenditures, and to lower production at the Doyon mine, east of Rouyn, Que.

Cambior holds a half interest in Doyon, with Barrick Gold (ABS-T), the operator, holding the other half. A dispute between labor and management last year meant development workings were not advanced on schedule and ground problems slowed down production from one of Doyon’s ore zones.

The Omai mill, which was expanded to a daily capacity of 18,000 tonnes from 12,000 tonnes, produced 84,000 oz. gold in the second quarter of 1997. Omai is owned 30% by Golden Star Resources (GSC-T) and 5% by the Guyanese government; it was returned to full production in early 1996 following a tailings dam failure in 1995.

An Aug. 13 walkout by the Omai workforce, in response to disciplinary measures against two employees, ended three days later when the company and union agreed to resolve the disciplinary issue under the terms of existing grievance procedures. Mill operations continued throughout the brief walkout, so production was not affected.

The Bouchard-Hebert zinc-copper-gold mine, northeast of Rouyn, reported greater mill throughput and higher grades in the second quarter of 1997, and higher zinc prices boosted net smelter return at the mine to US$37 per tonne.

Higher zinc prices also convinced Cambior to reopen the Langlois zinc mine at the beginning of July. It had been shut down at the end of 1996.

Cambior’s Carlota copper-oxide project in southeastern Arizona received a favorable decision from the U.S. Forest Service on its final environmental impact study. Unless appealed, the decision will allow Cambior to start construction before the end of the year.

At La Granja, a copper project in Peru, the company has exercised its option to acquire full ownership, subject to a 5% net smelter return held by Minera Peru. The feasibility of a smelter and refinery complex at Bayovar on the northwestern coast, about 190 km northwest of La Granja, is now under study, and Cambior will seek a 50% partner to bring the project into production.

An updated feasibility study is in the works at the Gross Rosebel gold project in Suriname, in which Cambior and Golden Star own equal shares. In May, a new reserve calculation put the property’s minable reserve at 35 million tonnes grading 1.6 grams gold per tonne, an increase of 30% over earlier figures.

Golden Star, Cambior and affiliate Cambiex (CBX-T) now quote a measured and indicated resource of 11.2 million tonnes grading 2.2 grams gold at their Yaou project in French Guiana, and 8.5 million tonnes grading 1.3 grams at nearby Dorlin. Yaou has an additional 7 million tonnes and Dorlin another 8.3 million tonnes in the inferred category. Prefeasibility work is scheduled for early 1998.

Cambiex, in which Cambior owns a 37% interest, reported a loss of $93,700 in the second quarter, compared with a loss of $116,100 in the same period of 1996.