Goldcorp bumps up grade

Goldcorp (G-T) has increased by 43% the number of contained ounces in the High Grade zone of the Red Lake mine in northwestern Ontario.

The mine, which re-entered production in August, now has a reserve of 1.8 million tons grading 1.68 oz. per ton and an inferred resource of 435,000 tons grading 2.02 oz. per ton. A combination of considerably higher-grade estimates and a one-third increase in the mining dilution factor account for the increase.

Until recently, Goldcorp calculated its reserves by cutting higher grades to 10, 5 or 2 oz., a regional practice still followed by Placer Dome (PDG-T) at the nearby Campbell mine. However, exploration and mining results have since shown that this method is inappropriate for the High Grade zone insofar as it generates an average grade that is unduly conservative. For instance, between Dec. 11, 2000, and Jan. 10, 2001, headgrades averaged 2.09 oz. — 14% higher than that obtained in the previous four months and 53% higher than the grade estimated in the feasibility study.

The revision, which includes results from 20 new drill holes, also shows a sizable increase in the proven portion of reserves. Proven reserves now top 708,000 tons grading 2.01 oz., whereas the probable portion contains 1.1 million tons grading 1.46 oz.

The new estimate also better reflects current gold prices, applying an average of US$275, instead of US$300, per oz. Projected cash costs at the mine remain unchanged, at US$88 per oz., as do total after-tax costs, at US$213 per oz.

Geological consulting firm Watts, Griffis & McOuat has audited and confirmed the new estimates.

Meanwhile, deep exploration has begun from the 37 Level, which, at 5,430 ft. below surface, is the deepest level in the mine. The best results obtained so far include 8.98 oz. over 6.5 ft. and 6.47 oz. over 6.7 ft. Those and 37 other intersections were included in the reserve/resource revision.

In addition to High Grade, Red Lake hosts 1.8 million tons of refractory sulphide material grading 0.37 oz. gold per ton. Such material kept the mine running continuously for 48 years until a strike erupted in 1996. The strike was resolved last summer.

In 2001, Goldcorp expects to produce more than 300,000 oz. from the Red Lake mine. Another 93,000 oz. are expected to be yielded from the Wharf heap-leach mine in South Dakota.

Reserves at Wharf have been re-estimated to reflect depletion and a gold price of US$275 per oz. Reserves now top 23 million tons averaging 0.031 oz.