Despite higher-than-expected operating costs,
In 1998, the open-pit heap-leach operation cranked out 22,348 oz. at a cash cost of US$284 per oz. Costs were higher than the previous year’s US$272 per oz. as a result of lower grades.
Overall, Canyon cranked out a record 80,316 oz. in 1998 at a total cash cost of US$278 per oz., and projections for the current year are set at 86,000 oz.
In 1998, the company sold much of its gold for an average realized price of US$375 per oz. By comparison, the realized price in the first quarter of 1999 was US$369.
The higher production will be used to reduce debt; the company still owes 40,419 oz. on a gold loan, representing US$11.3 million at US$280 per oz.
Last year, the company further reduced the carrying value of the Briggs debt by liquidating gold hedges acquired earlier, and by selling its industrial minerals assets. However, Briggs’s performance failed to meet terms set down in the gold loan, and the lenders now want the price protection at the mine liquidated.
The company has hedged 152,000 oz. of production at US$310 per oz.
Meanwhile, the heap-leach pads are being loaded with run-of-mine material in an attempt to increase production. On average, the pads are receiving 100,000 tons per month.
Canyon recently applied for permits to mine the higher-grade North Briggs and Goldtooth deposits, with approvals expected by mid-year.
At the end of 1998, Briggs had reserves of 17.1 million tons grading 0.035 oz. per ton, equivalent to 600,000 oz., and Canyon says the 17,000-acre property has significant exploration potential.
The company’s other major asset is the multi-million-ounce McDonald gold project in Montana.
Canyon reported a net loss of US$380,000 (or 1 cents per share) for the recent first quarter, compared with a loss of US$9.1 million (20 cents per share) in the corresponding period of 1998.
Be the first to comment on "NEVADA & THE WESTERN STATES — Canyon eyes higher production in 1999"