Cortez, Granny Smith bolster Placer Dome

The Cortez mine in Lander Cty., Nev., retained its status as the lowest-cost gold producer in North America during 1999, contributing to a year of record production for 60%-owner Placer Dome (PDG-T).

The major cranked out 3.1 million oz. of the yellow metal last year at a cash cost of US$159 per oz. and a total cost of US$231 per oz.

Company President Jay Taylor says Cortez is one of three mines that performed exceptionally well for Placer during the year, the others being the 60%-owned Granny Smith in Western Australia and the wholly owned Campbell in Red Lake, Ont.

Cortez produced 797,115 oz. for Placer’s account at a cash cost of US$48 per oz.; Granny Smith, 313,855 oz. at US$98; and Campbell, 262,015 oz. at US$145.

Also, during the fourth quarter, the 50%-owned South Deep gold mine in South Africa contributed 39,907 oz. at a production cost of US$213.

Annual production at South Deep is in the process of being upgraded to 700,000 oz. from the current 350,000 oz. The extra tonnage will be mined via a new shaft, to be completed in 2003. A mill expansion is scheduled for late 2001.

Meanwhile, at the Getchell mine in Nevada, Placer will endeavour to increase throughput rates and thereby lower operating costs to less than US$200 per oz.

Drilling at Getchell has intersected what is believed to be the southern extension of the N zone directly underneath the existing Turquoise Ridge mine. This effectively doubles the strike length of the N-zone. (Placer is now preparing a plan for an expanded operation that would combine production from the Getchell, Turquoise Ridge and N-zone deposits.)

Overall, Placer expects to produce 3 million oz. gold this year at a production cost of US$165 per oz. and a total cash cost of US$245 per oz. Year-end results are due later this month.

In related news, Placer says it will suspend its gold hedging activities in anticipation of an improved gold market. The company’s hedging program allowed it to realize an average price of US$480 per oz. on its gold forward sales during 1999. The average price realized on all the company’s gold production was US$341 per oz., which works out to US$62 per oz. over the spot price.