William to build plant

William Resources (WIM-T) will shortly begin constructing a carbon-in-leach plant at its Bjorkdal open-pit mine in northern Sweden.

The Toronto-based company recently received approval from Sweden’s Licensing Board for Environmental Protection to build a plant capable of processing up to 1,500 tonnes of ore per day. The facility will be designed to process two of the three concentrates currently produced at the mine; the third, a gravity concentrate typically averaging 50% gold and accounting for 67% of the mine’s total output, will continue to be shipped to an independent facility for refinement into dor bars.

Construction is expected to start within two months and take another seven to complete. A total of US$2.3 million has been budgeted for the project.

Bjorkdal is the largest and most profitable of William’s three mines. It produced 92,000 oz. gold in 1997, accounting for nearly half of William’s total production that year of 210,000 oz. gold. The company’s overall cash cost averaged US$266 per oz.

William expects the new plant will reduce Bjorkdal’s cash costs by 10%.

Accordingly, the company has projected that cash costs at Bjorkdal will drop to US$185 per oz. gold in 1998, from US$200 in 1997, assuming the mine produces 100,000 oz. gold this year.

Meanwhile, William has taken other measures to trim its costs and maintain gold production near 1997 levels. Some of these initiatives include: * Acquiring new underground mining equipment for the Jacobina mine in Brazil. The new fleet is expected to lower the mine’s cash costs to less than US$300 per oz. by the third quarter and keep yearly production at 60,000 oz. gold;

* Implementing a definition drill program in an area roughly 200 metres northwest of the Pahtavaara open-pit mine in northern Finland to prove-up a potential resource of 250,000 tonnes grading 3 grams gold believed to be amenable to open-pit mining. The active pit will be exhausted by July, but if the above resource is proven minable, it would keep the operation going until year-end; and

* Reducing general and administrative costs (excluding those of the wholly-owned BLM Service Group) to $3 million in 1998 from $6 million in 1997.

In addition, the company has signed an agreement to sell its 14.9 million shares in ECU Gold Mining (ECU-T) and its 30% net profits interest (NPI) in that company’s Velardena silver mine in Mexico.

The shares, along with half of the NPI, will be purchased by a private company for $2 million; the other half of the royalty will be purchased by ECU for 5 million warrants that will entitle William to purchase an equal number of shares at 30cents each for five years.

The deal is subject to regulatory approval and is expected to be completed by mid-May.

William has hedged 160,000 oz. gold at US$373 per oz. for 1998 and 152,000 oz. gold at US$349 per oz. for 1999. The company’s debt at the beginning of January was US$47 million.