Equity Silver looks to future

With its operation near Houston, B.C., winding down, Equity Silver Mines (TSE) does not expect to continue as an operating mining concern after current reserves are depleted.

Formerly an open pit, Equity is now mining from underground at a scaled-down rate of 1,300 tons per day.

Proven and probable ore reserves at the end of 1992 were about 316,000 tons grading 4.31 oz. silver per ton, 0.123 oz. gold and 0.46% copper, based on an 8.75 oz. silver-equivalent grade.

Equity has also identified a small open-pit resource at the bottom of the Waterline pit which, when combined with underground reserves, should provide mill feed through the first two months of 1994.

At the annual meeting, President Henry Brehaut said there are no plans in place to distribute excess funds.

As of March 31, Equity had about $33.6 million in working capital, no long-term debt and about 32.5 million shares outstanding.

Equity also has a security deposit with the British Columbia government, totaling $35.3 million, to finance reclamation and long-term acid-drainage treatment.

Some of the waste rock dumps surrounding the operation are susceptible to oxidation and natural bacterial leaching. When moisture comes in contact with that material, it tends to become acidic, which, in turn, causes heavy metals to be dissolved.

Equity has installed a system to collect and treat drainage from the dumps and the company must maintain it until acid and heavy metal generation is exhausted.

Reclamation work in 1992 focused on inhibiting the generation of acid drainage. This included the resloping of dumps and the addition of a compacted till cover to reduce water infiltration.

The cost of treating dump drainage dropped to $1 million in 1992 from $1.3 million in 1991. Brehaut said the downtrend in treatment costs may suggest that the security deposit could be reduced by about $9 million. He added that, so far, the company is encouraged by the results of two years of compacted clay cover.

Equity plans to improve the dump covers further and to conduct research in order to predict trends with greater accuracy.

Although its facilities have depreciated to almost nil from an original $114 million, the company may realize additional value for the assets. Brehaut said the company has been in discussions with the operators of the Eskay Creek gold project regarding the use of the Equity site facilities for processing their ore.

Placer Dome (TSE) owns 58.8% of Equity’s outstanding shares.