Low gold prices are taking their toll on Bema Gold (BGO-T). Like everyone else in the business, the company witnessed a steady erosion in its share price as the yellow metal proceeded to spiral downward in recent months.
On a brighter note, Bema reports that its 50%-owned Refugio gold mine in northern Chile has recovered from the production setbacks experienced during unprecedented winter storms. By mid-September, the mine had averaged more than 31,000 tonnes per day of ore delivered to the heap-leach pads.
Gold production has increased steadily throughout the month, and output for the fourth quarter is expected to improve dramatically as crushing of throughput increases.
Bema has hedged 100% of planned production from Refugio at an average price of US$386 per oz., and 85% of the planned production for 1998 and 1999 at an average price of US$380 per oz.
Most of Refugio’s ore is mined from the Verde deposit, where reserves stand at 186 million tonnes grading 0.89 gram gold at a stripping ratio of 1-to-1.
Bema and partner Arizona Star Resource (azs-v) are awaiting the results of a prefeasibility study on the Cerro Casale deposit, situated on the Aldebaran property, near Refugio. The companies each own a half interest in the copper-gold project.
The study will include a minable reserve for Cerro Casale, as well as capital and operating cost estimates. The companies expect the study to confirm “strong project economics.”
Several major companies are completing due diligence studies on the Cerro Casale deposit. The geometry and topography of the deposit suggest that it may be amenable to low stripping ratios, which would result in a high recovery percentage.
Based on a cutoff grade of 0.5 gram gold, the combined oxide and sulphide resource at Cerro Casale is 903 million tonnes grading 0.78 gram gold and 0.3% copper (equivalent to 22.5 million oz. gold and 5.3 billion lb. copper).
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