Cambior eyeing new prospects, possible base metal plays

Spun off as a public company in 1986 from Quebec’s Crown mining exploration corporation SOQUEM, Cambior has property interests in the province’s northwest fro m Val d’Or to the Ontario border, including some base metal prospects in the Rou yn-Noranda area.

“We’ve identified some targets which are of the base metal type,” Gignac said, adding that drilling on these properties has been scheduled for later this year and into 1990.

He would not comment on the potential of these properties, however. “It’s not my style to promise anything,” he said. “We’ll do our homework and see what come s out of it.”

Cambior, which produced about 191,200 oz gold in 1988 and is aiming for more than 260,000 oz in 1991, derives a large portion of its gold output fro m its 50% interest in the Doyon mine situated between Val d’Or and Rouyn-Noranda.

The company also has interests in five other mines in production or under development: Beauchemin, Beliveau (known formerly as the Pascalis mine) , Chimo, Vald ez Creek (a placer gold operation in Alaska where operations were suspended this month) and Niobec (niobium production).

Two underground gold projects Cambior is involved in are the Mouska, where $12 million will be spent this year on drifting, underground drilling and other work, and Silidor, which is set to enter production early in 199 0.

Planned surface exploration expenditures this year by Cambior will total about $7 million, some $3 million of which will be spent on properties in the U.S. As for South America, Gignac said company representatives have been down there looking, but for the time being he is not making any announcemen ts.

Budgeted surface expenditures this year are down from the $10.9 million the company spent last year. “It’s a question of funds available,” Gignac s aid, explai ning that 1989 has been a heavy year for pre-production and capital expenditures.

Gignac, who has a doctorate in mining engineering, worked for Falconbridge Copper, Exxon Minerals and Brunswick Mining and Smelting prior to joini ng Cambior. He was interviewed at the company’s head office in a 2-storey building Cambior r ecently had constructed in Val d’Or.

A relatively low gold price has made for a quiet gold market of late and Gignac is not optimistic of a short-term change. “Right now, I don’t kn ow anything th at can move it up by the end of the year,” he said. Should general economic cond itions weaken next year, a higher gold price would be expected, he said.

To help ensure its growth, Cambior protects its revenue through future sales contracts and gold loans, hedges against a drop in the price of gold.

At the beginning of this year, the company had commitments covering more than 54% of its projected 1989 production at $495(US) per oz. During the second quart er of this year, Cambior reports its average realized price for its gold output was about 20% above the average market price.

The company’s hedging strategy was used to bring its newest mine, the Beliveau, a relatively small gold project, into production. Gignac said commitments cove r about 70% of the mine’s output during the next four years.

]]>