Output to rise at Grasberg

Vancouver — Bucking the trend of other major producers, Freeport-McMoRan Copper & Gold (FCX-N) says it expects a 7.1% increase in copper production next year at its Grasberg mine in Indonesia.

Output for 2002 is projected to be 680,389 tonnes, or 45,359 tonnes more than in 2001. The announcement comes at a time when other major copper producers are cutting back.

The New Orleans-based company expects gold production to fall 23% next year as it mines lower-grade ore during the first half of 2002. The company plans to pour 2 million oz. gold in 2002, down 600,000 oz. from this year.

Cash production costs in the year ahead are pegged at less than US20 per lb., based on a gold price of US$270 per oz.

Freeport sees sales volumes hitting 635,029 tonnes copper and 2.4 million oz. gold for 2003 through to 2005.

Situated in Indonesia’s easternmost province of Irian Jaya, Grasberg ranks as the lowest-cost copper producer in the world. Net cash production costs were US5 per lb. in the quarter ended Sept. 30, a significant improvement over the US33 recorded in the corresponding period of 2000.

Mining resumes at Stratoni

Mining has resumed at the Stratoni zinc-lead-silver operation in northern Greece following the lifting of a suspension order placed by the local mining inspector’s office.

The mine’s owner, TVX Gold (TVX-T), had declared force majeure on concentrate deliveries from the Stratoni, which is 75 km southeast of Thessaloniki. In early December, a mining inspector ordered the company to move back 100 metres from an existing boundary. The restrictions were removed nine days later, and all 500 employees are expected to return to work.

TVX has struggled with local officials over permitting issues since 1995, when it acquired the Hellenic gold complex, which includes the Madem Lakkos and Mavres Petres zinc-lead-silver mines and the nearby Stratoni mill.

In September, TVX applied for permission to extend Stratoni’s mining operations underneath the nearby village of Stratoniki. The government says it intends to respond to the application in early February 2002.

Bema funds work in Russia

Vancouver — To finance exploration and development at the Julietta mine in far-eastern Russia, Bema Gold (BGO-T) has arranged a $7-million financing through Canaccord Capital and Haywood Securities.

The offering will consist of 14 million units, with each unit consisting of one share and half a warrant exercisable for two years. The unit price is 50 with a 70 warrant in the first year; in the second year, the warrant is 90.

The Julietta mine entered production in early December and, during its first year of operation, is expected to pour 140,000 oz. gold and 2.4 million oz. silver. Cash operating costs (net of silver credits) are pegged at US$25 per oz. gold; total cash costs, at US$70 per oz.

During the first four years of production, annual production is projected to average 100,000 oz. gold and 1.7 million oz. silver.