Gold production was steady at Cambior’s (CBJ-T) remaining operations as production increased at the Niobec niobium mine, northwest of Chicoutimi, Que.
Better grades at the Omai gold mine in Guyana pushed first-half production to 174,600 oz. gold, up from 158,600 oz. in the first six months of 2000. Mill throughput, at 3.9 million tonnes, was roughly the same as in the first half of last year. Recovery rates were down fractionally at 93%.
The Doyon mine in northwestern Quebec produced 114,300 oz. gold in the period, down from 117,800 a year before. At Sleeping Giant, also in northwestern Quebec, production was down to 32,800 oz. from 40,000; the mine is currently producing from a lower-grade ore zone. Cambior shares this operation with Aurizon Mines (ARZ-T).
Expansion brought production up to 1,440 tonnes niobium in the first half-year at the Niobec niobium mine. During the comparable period in 2000, Niobec produced 1092 tonnes niobium. Cambior has a half-share in the operation. The other half is owned by Mazarin Mining (MAZ-T).
The company has a slightly larger hedge position than it had at the beginning of the year. It has 2.1 million oz. (about three and a half years of production at current rates) committed at an average price of US$305 per oz. Its hedge contracts require that a minimum of 1.3 million oz. of that commitment be delivered at an average price of US$297 per oz.
The mark-to-market value of the hedge book was a negative US$1.1 million at the end of June.
About 149,000 oz. gold are covered by call options which expire in 2001. Average strike prices are US$283 per oz. Should the gold price be above the strike price when the options mature, Cambior would be obliged to deliver on the contracts.
Similarly, another 216,000 oz. are covered under call options which mature in 2002 at strike prices averaging US$322.
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