Homestake shuts mill stream at Pinson

Homestake Mining (HM-N) and its partner, Barrick Gold (ABX-T), have decided to shut down the mill at the Pinson gold mine in Nevada in favor of processing the remainder of the oxide reserves by heap leaching.

Homestake reports that increased solution capacity in the leach circuit and more favorable metallurgy in the deposit has enabled the partners to revise the mining plan and save money by bypassing the mill circuit altogether.

The new plan is expected to decrease the life-of-mine total cash costs by US$40 per oz., while increasing production by 20%, to 60,000 oz. in 1998.

Total cash costs at Pinson in 1997 were US$344 per oz., down from US$369 in 1996.

Pinson contains oxide reserves of just over 130,000 oz. gold (1.78 million tons grading 0.07 oz. gold per ton), enough for 18 months of mining.

Its share of Pinson production helped Homestake reach a record of 1.99 million gold-equivalent oz. produced in 1997, up from 1.96 million oz. in 1996. Cash costs for the company fell to US$237 per oz. from US$248 per oz.

in 1996. Revenues fell 11% to US$633 million because of the lower gold price.

For the year, Homestake reported a net loss of US$168.9 million (or US$1.15 per share) compared with a net income of US$30.3 million (21cents per share) in 1996. The loss for the year was partly a result of non-recurring charges totalling US$103.4 million (70cents per share).

Homestake’s total proven and probable reserves dropped to 17 million oz.

gold from 20.4 million oz. in 1996. The reduction was, in large part, due to the revision of mine plans at both the Homestake mine in South Dakota and the Round Mountain mine in Nevada. At the Mount Charlotte mine in Australia, definition drilling was not able to increase reserves by as much as was hoped. On the bright side, the company achieved reserve increases at Super Pit, also in Australia, as well as at Eskay Creek in British Columbia.