Gold price prompts Cambior to reopen Valdez Creek mine

The recent increase in the gold price has prompted Cambior (TSE) and Camindex Resources to reopen their Valdez Creek placer mine in Alaska. Cambior says that based on the recent strength in the gold price, the partners have approved the investments required to divert the Valdez River and resume operations immediately.

Cambior, which purchased American Barrick’s (TSE) 23% interest in May, has a 49% in the project. Camindex, a unit of MVP Capital (TSE), retains a 51% interest.

The partners were forced to close the mine in October, 1989, when it became clear that, in order to continue mining, they would have to divert a section of the Valdez River to uncover upstream ore. At the time, a relatively weak gold price rendered the project unfeasible. But at the end of the second quarter, the partners obtained the environmental permits to go ahead with the diversion, and shortly afterward the gold price strengthened.

Total startup costs at Valdez Creek are estimated at $7 million. Aside from the diversion, the partners plan to build a new wash plant which will increase capacity by 60%.

Full production at an operating cost of about US$265 per oz. is scheduled for early December, and the partners expect to produce more than 80,000 oz. of gold in 1991. When the mine closed last year, it was operating at cash costs of about $US340 per oz. and had produced about 60,000 oz. of gold.

Proven and probable reserves currently stand at 2.5 million cu. yd. averaging 0.12 oz. gold per cu. yd. The partners say there is a strong likelihood of an increase in reserves further upstream.