Cassiar looks to exceptional year

At the company’s recent annual meeting, James C. O’Rourke, president, said that Cassiar’s “cash flow and net earnings will continue to improve throughout 1989.” He also predicted that production and sales from its Cassiar asbestos operation “will remain at record levels” and costs would drop. “The 1989 production has been sold at prices 5% higher than those of last year,” he added.

Development of the McDame asbestos deposit is ahead of schedule and nearly on budget, he said. A number of key personnel have been hired with experience in underground block caving, the mining method to be employed at McDame. Over-all costs for McDame are estimated to be $48.2 million and the project will add 10 years to the operating life of the mine.

The Cassiar operation achieved a 35-year production record of 106,065 tons of fibre last year and “1989 is projected to exceed this record slightly,” O’Rourke said. A wet-milling pilot plant was commissioned last August which has been modified and will now produce about 4,000 tons of fibre per year. A study is planned this year on the feasibility of treating portions of the 14-million-ton tailings stockpile which is estimated to contain 3.5% recoverable fibre.

Discussing last year’s purchase of the Similco copper mine near Princeton, B.C., O’Rourke noted that mill throughput has been increased by 25% to 25,000 tons per day. Copper production is expected to continue at an annual rate of 60 million lb and he expected copper prices to average over $1.10(US) per lb for the year.

Cash flow from Similco in 1988 was sufficient to cover the acquisition price from Newmont Mines which has since pulled out of Canada. The $5.4-million debt to B.C. Hydro was also paid off and O’Rourke said “the only outstanding obligation from this acquisition is the return of 5.6 million pounds of copper in the concentrate on June 1990.”

Earlier this year Cassiar sold its Bissett gold mine in Manitoba to Rea Gold Corp. (VSE). The purchase price was 2.3 million shares of Rea Gold and Cassiar made available to Rea Gold a $4-million loan secured by a convertible debenture. Assuming the debenture is converted, Cassiar will own approximately 22% of Rea Gold which has a 30% interest in the Samatosum project, now under development by Minnova Inc. (TSE). The mine, which should be producing this June, is expected to put out over five million ounces of silver and significant amounts of copper, zinc and lead.

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