Mining at Casa Berardi Est to resume in July, says TVX

The Casa Berardi Est gold mine in northwestern Quebec is expected to be back in operation by mid-July, TVX Gold (TSE) President Martin Robinson said at the company’s annual meeting in Toronto.

Operations were suspended there in April after overburden flowed into the underground mine through a fault zone opening at surface (T.N.M., May 4/92). Production has been increased at the Casa Berardi Ouest mine (the two mining operations share a mill) to help make up for the lost output at the Est mine, Robinson said. TVX has a 60% interest in the two mines; its partner there is Golden Knight Resources (TSE).

For TVX, the South American nation of Chile has become an important growth area. The large-tonnage, low-grade La Coipa gold-silver mine, where the milling capacity is 16,500 tons per day, will account for almost one-half of the company’s 1992 gold production.

Robinson said TVX is projecting total output this year from its six North and South American mines of more than 400,000 oz. gold and gold equivalent at an average cash cost of below US$190 per (gold equivalent) oz.

La Coipa, the largest precious metal mine in South America, has the capacity to turn out 200,000 oz. gold and 16 million oz. silver annually, Robinson said. The mine is jointly owned by TVX and Placer Dome (TSE). During the first quarter of this year, TVX reported output of 106,500 oz. gold equivalent (77,400 oz. gold and 2.6 million oz. silver) at a cash cost of US$170 per (gold equivalent) oz. Net earnings during the quarter amounted to US$3.1 million compared with US$1.4 million for the same period in 1991. TVX’s long-term debt at the end of 1991 stood at US$184.9 million, including US$155.9 million of non-recourse debt of which 82% was related to La Coipa mine. As of March 31, long-term debt had been reduced to US$174.3 million. Robinson said TVX has decided not to pay a dividend in 1992. Current reserves at La Coipa will provide for more than 13 years of mine life. Elsewhere in South America, the company has interests in three smaller gold mines in Brazil.

The company is seeking to grow through acquisitions of properties with known reserves, Robinson said, adding that TVX’s strategy is to remain in the Americas. TVX made no new acquisitions in 1991. Exploration this year will be focused at existing mining sites, with the company’s share of the planned work totalling about US$3.5 million.

For 1992, TVX, which is 62% owned by Inco (TSE), has hedged about 55% of its share of gold production from La Coipa at US$400 per oz. and 75% of its silver production from La Coipa at US$4.50 per oz. The company said hedging in 1991 boosted revenues by US$5.7 million.