EXPLORATION ’92 — Lac boosts gold output, lowers costs

Gold production increased by 16% during the third quarter of 1992 while cash costs per oz. decreased by 23%, Lac Minerals (TSE) reported. In the first nine months of 1992, gold output increased almost 11% while cash costs per oz. decreased by 11%.

Third-quarter and 9-month gold output totalled 277,000 oz. and 848,000 oz., respectively. Third-quarter and 9-month cash costs averaged US$206 per oz. and US$218, respectively.

In Nevada, the Bullfrog mine’s 9-month production jumped 61% to 243,000 oz., which the company attributed largely to the processing of higher-grade material.

In northwestern Quebec, temporary grade and dilution problems at Bousquet No. 2 contributed to lower gold production and higher unit costs. The company expects an improvement in the fourth quarter and in 1993. At Bousquet No. 1, a research and development program for continuous mining will be ready for evaluation in the fourth quarter. If successful, it will permit extraction of the narrow ore reserves, the company said.

At Toqui, Lac’s zinc mine in southern Chile, performance has been adversely affected this year by dramatic increases in industry treatment charges which could remain in place for at least another year.

Lac recently announced the signing of a purchase agreement to acquire all of Chevron Corp.’s mineral interests in Ireland for about US$70 million. Upon closing, the Company will have a 52.5% effective interest in the Lisheen deposit, one of the world’s best undeveloped zinc deposits, near Kilkenny. Chevron’s partner in the project, Ivernia West PLC, has claimed a pre-emptive right on the property. At presstime, the two parties were in arbitration to resolve the issue.

Lac said it had 567,000 oz. gold hedged at an average price of US$386 per oz. as of Sept. 30.

Lac said it has intensified the global search of its exploration and business development groups for low-cost, long-life assets. Gold will continue to be the dominant metal in the company’s evolving asset mix, it said.