Continued exploration success is prompting
Production from several deposits, including El Mirador and El Toro Norte, could start in the fourth quarter, and the resulting cash flow will be used to pay fixed costs and ongoing exploration expenses at the property.
Among the targets being explored is the Elena Sur prospect, 750 metres northwest of El Toro Norte, where preliminary trenching has yielded 5.8 grams gold per tonne over a true width of 4.5 metres.
Another is the 2.6-km-long La Peque-Escondida structure, within which is the newly discovered Vibora prospect, where trenching partially exposed an altered zone assaying 1.4 grams gold over a true width of 8 metres.
Subsequent drilling returned a value of 1.64 grams gold over 13.5 metres, and a second zone at depth assayed 0.95 gram gold over 9 metres. Additional trenching and drilling will test the prospect along strike and at depth. La Peque-Escondida is about 1.5 km north of the mine site.
Drilling of the central Escondida area suggests that this zone has a strike length of 300 metres, a true width of 7 metres and grade of 1.3 grams gold.
The 180-metre central portion of the target averages 1.7 grams gold over a true width of 6.5 metres. More drilling east and west of this deposit will be completed before resources are calculated.
In the meantime, Campbell has posted a second-quarter loss of $3.9 million (or 3 cents per share) on metal sales of $6.4 million, most of which was derived from production at the Joe Mann gold mine near Chibougamau, Que.
During the comparable period last year, when Santa Gertrudis was still producing, the loss amounted to $2 million (1 cents per share) on metal sales of $9.2 million.
Second-quarter gold production totalled 16,000 oz., compared with 21,100 oz.
a year ago. Over the first six months of 1999, Campbell sold its gold for US$279 per oz., compared with US$302 in the corresponding period of 1998.
A production shortfall at Joe Mann is attributed to lower head grades, decreased tonnage milled, scheduling delays and ground-control problems. As a result, cash operating costs swelled to US$314 per oz. during the second quarter, compared with US$269 a year earlier.
Production from Joe Mann’s West zone was hampered by low and inconsistent grades, forcing development there to be suspended.
The mining plan is under review, though Campbell is expecting to focus its efforts on a new zone on the 2575 level. All stopes below the 2350 level are to be mined by cut-and-fill methods, thereby lowering dilution and cutting costs.
Campbell has revised its 1999 production target at the mine to 66,000 oz.
gold at a cash production cost of US$265 per oz. During the second half of this year, Joe Mann is expected to break even at a gold price of US$260 per oz.
Campbell’s working capital on June 30 was $36.8 million, including $33.4 million in cash.
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