Cambior needs US$152 million to build gold mine in Guyana

The board of directors of Montreal-based Cambior (TSE) recently approved a feasibility study for the Omai gold project in Guyana, South America, held jointly with Golden Star Resources (TSE). Golden Star’s previous partner at Omai was Placer Dome (TSE) which withdrew from the project earlier this year.

Cambior says that if diesel fuel is used to power the Omai open pit mining and milling complex, the project would cost US$152 million to build and could be in production by 1993. Hydro-electric power is also an option, and discussions are currently under way with the government of Guyana in that regard, the company says.

Cambior spent US$1.5 million to complete its study and may earn a 60% interest in the project by arranging production financing. Cambior’s interest could rise to 70% if secondary options are exercised. The government of Guyana will hold a 5% interest.

If a production decision, based on the diesel power option, is positive, the mine would take 18 months to build. During the first three years of mining, average annual output would be about 255,000 oz. gold from an average milled grade of 0.058 oz. gold per ton. Direct operating cost is estimated at US$185 per oz.

Based on known reserves in two open pits (Main stock and Wenot Lake) plus alluvial deposits, a 9-year mine life is expected.

A conventional 13,200-ton-per- day mill with a carbon-in-pulp circuit will be built to process a mixture of fresh and altered rock at a ratio of 75-to-25. Gold recovery is expected to be about 93.5%.

Cambior has approved a budget of US$3 million for the first half of 1991 to complete the final engineering required while discussions are being held with financial institutions regarding project financing and political risk insurance.