Dickenson gains all of White mine

Serious about boosting its own annual production beyond the 100,000 oz level, Dickenson Mines (TSE) has acquired 100% ownership of the Arthur W. White mine near Red Lake in northwestern Ontario.

In a deal completed at the end of June, Dickenson paid about $52 million (plus working capital adjustments) to Cambior Inc. (TSE) for the latter’s 34% interest in the mine, which in 1987 produced about 63,800 oz gold.

Also, Cambior has sold Dickenson about 1.7 million shares the former holds in Goldquest Exploration (TSE) for $940,000. Dickenson, the major shareholder in Goldquest, increases its stake in the junior exploration company to 61%. Goldquest is active in the Red Lake and Matheson, Ont., areas.

“I’m certainly convinced it’s good for Dickenson,” said President John Kachmar of the acquisitions. The company is forecasting output of 80,000 oz gold this year at the White mine, which has been in operation since 1948.

Production at the White mine dropped by about 4,000 oz in 1987 from the year before, the result of a month-long strike, a shortage of skilled miners and lower millhead grades. The mine’s operating cost in 1987 was $321(US) per oz, up from 1986. Productivity boost

In an interview earlier this year with The Northern Miner, Kachmar said the company, which has undertaken in-house training of its workers, is counting on boosting productivity this year. Plans call for an increase in the number of stopes, or underground working places, and a pumping up of the production rate to 1,000 tons per day by the end of 1988.

Among its other interests, Dickenson has a 33% equity position in Wharf Resources (TSE), which turned out 46,000 oz gold at its heap leach mine in South Dakota last year and is expected to produce 53,000 oz in 1988. A proposed amalgamation of the two companies is being investigated.

Cambior would not divulge specifically what it intends to do with the proceeds of the sales, other than to say the funds will be used for acquisitions. The Quebec-based company obtained its 34% interest in the White mine when it merged one of its wholly-owned subsidiaries with Sullivan Mines in 1987.

(Dickenson in 1987 increased its interest in the White mine to 66% by acquiring the 1% interest held by Wm. G. Brissenden, Inc.)

Cambior, which was forecasting gold output of 200,000 oz for 1988, reported a long-term debt of about $25.3 million at the end of 1987.

Active in Quebec, Cambior is a partner in the Valdez Creek placer gold project in Alaska and has an interest in a gold exploration property in the eastern U.S. The company recently announced it plans to place its Eldrich-Flavell gold property, located nine miles west of Rouyn-Noranda, Que., into production this year.