Cambior still profitable though earnings fall (May 13, 2005)

Cambior (CBJ-T) has posted first-quarter net earnings of US$1.6 million, down from US$7.3 million for the same period in 2004, despite a 10% increase in gold production.

Gold production climbed to 166,500 oz. during the quarter, up from 152,000 oz. produced a year earlier. The increased production all came from Cambior’s Rosebel mine in Suriname, which set a new milling record during the quarter averaging 20,400 tonnes per day.

Rosebel processed 1.8 million tonnes grading 1.55 grams gold per tonne. The mine produced 87,950 oz. gold at a mine operating cost of US$190 per oz. Last year during the same quarter, just 27,300 oz. gold were produced from 669,200 tonnes of ore grading 1.59 grams gold per tonne (Rosebel began producing gold in February of last year).

The Omai mine in Guyana saw the largest fall in production; the mine is set to close in September and current production is from lower-grade stockpiled ore. The operation still produced 34,260 oz. gold at a mine-operating cost of US$338 per oz. from almost 1.3 million tonnes of ore grading 0.92 gram gold per tonne.

A year earlier production was over twice as high, largely due to processing higher-grade ore (1.7 grams gold per tonne).

Costs were up at all operations, primarily because of higher fuel costs, but the strength of the Canadian dollar also had an impact.

Cambior’s Quebec mines, Doyon and it’s 50%-owned Sleeping Giant, both saw decreases in production by 14.7% and 17.8% respectively.

Doyon produced 37,100 oz. gold from 194,630 tonnes of ore grading 6.2 grams gold per tonne. Unlike the year-earlier period, all production was from underground. Mine operating costs rose US$47 per oz. to US$374 per oz. Doyon production includes production from the Mouska mine. Mouska was temporarily shut down and did not produce gold in the first three-quarters of 2004 because the shaft was being deepened.

Cambior’s share of production from Sleeping Giant totalled 7,150 oz. gold from 21,360 tonnes of ore grading 10.7 grams gold per tonne. Effective April 30, Cambior bought Aurizon Mines‘ (ARZ-T) 50%-share of the mine for $5 million cash. Cambior places the acquisition cost at US$45 per oz. gold. The company hopes to add reserves along extensions of known mineralized zones at depth.

Cambior sold gold for an average price of US$401 per oz. up from US$363 per oz. realized in the first quarter of 2004.

On the exploration front, Cambior has reported an increase in contained oz. of gold at its La Arena property, 480 km north of Lima, Peru. The measured and indicated resource totals 23.8 million tonnes grading 0.7 gram gold per tonne. Included in this resource, is 18.29 million tonnes, which grade 0.76 gram gold.

There is also an inferred resource of 2.3 million tonnes grading 0.59 gram gold per tonne.

The estimate used a gold price of US$400 per oz., a metallurgical recovery of 80%, a pit slope of 50 and a cutoff of 0.25 gram gold per tonne. Cambior is working on a pre-feasibility study for the project.

The company is also exploring a gold property, 15 km northeast of La Arena. A resource estimate of the El Toro deposit is scheduled to be completed this quarter.

A final feasibility study is due out this summer on the Camp Caiman property in French Guiana, where Cambior drilled 174 holes in the first quarter of this year.

An exploration drift along the 14th level of the Doyon mine is advancing to test the Westwood structure.

Cambior had 274 million shares outstanding at the end of March, up 33 million from a year earlier.