April spectacular month for Jolu mine

Jolu turned out 7,466 oz of gold in April, a 29% increase from the 5,775 oz produced in March. Mill recovery was greater than 97% while the average mill feed grade for the month was 0.57 oz gold per ton.

International Mahogany Corp. (TSE) holds a 70% interest in the property and Chairman Donald Busby noted that the amount of gold recovered represented a 50% increase over the company’s original projections. He attributed this performance to the “quality of both the mine and management.” The 400-ton-per-day gold mine is operated by Corona Corp. (TSE), holder of the remaining 30% interest.

The joint venture will gross $3.6 million for the month of April, and $13.03 million for the first four months of this year. In addition, more than 30% (11,100 oz) of the 35,000 oz project gold loan was repaid in just four months of commercial production.

Because the company sold the project gold loan at $443 per oz, it was able to realize a $790,280 gain on the repayment. (This amount is included in the gross revenues to April 30.)

The Jolu mine poured its first gold in November of 1988 and was projected to produce 50,000 oz in 1989 at a direct operating cost of about $185(US) per oz. Production since January to the end of April has already totalled 25,455 oz of gold.

The Jolu mine is expected to have a mine life of four to five years, although exploration for additional reserves is ongoing. In January, proven and probable reserves were reported as 415,600 tons grading 0.40 oz, with the deposit still open at depth.

What’s next for International Mahogany? According to director Nick DeMare, the company has acquired about a 60% stake in Magellan Resources Corp. (VSE) which has been reporting some interesting developments from its Southern Cross gold project in Montana.

Recent exploration success has led the company to project that the property has potential to host a significantly larger gold deposit than originally anticipated. New joint venture partner, Chevron Resources is planning to spend a total of $10 million to earn a 50% interest and bring the project to feasibility.

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