Consolidated gold production for Echo Bay Mines will reach a record 480,000 oz per year by 1987 following the acquistion by the company of three producing mines owned by Tenneco Inc.
Located in Nevada, the three Tenneco mines were purchased for $130 million(US). Known as the Manhattan, Borealis and McCoy mines, the three operations are expected to yield in excess of 150,000 oz of gold per year by 1987, Echo Bay says. Proven and probable reserves at the three properties are calculated at 18.7 million tons grading 0.056 oz gold per ton.
Before the Tenneco purchase, Echo Bay forecast 1987 gold production of 330,000 oz, this coming from its flagship Lupin mine in the N.W.T., the 50%-owned Round Mountain mine in Nevada and the newly opened Sunnyside mine in Colorado.
The Tenneco deal, which is scheduled to close in November, will also see Echo Bay assume Tenneco’s forward gold sale obligations which total 156,000 oz at $378(US) per oz between 1986-1988.
The $130 million(US) bill for the mines is expected to be financed partly by new equity and some form of gold-related financing, Robert F. Calman, Chairman, Echo Bay Mines says. Mr Calman adds that this acquisition is expected to significantly improve Echo Bay’s 1987 earnings per share and cash flow.
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