Goldcorp confirms Red Lake extension

Exploratory drilling has extended zones of high-grade gold mineralization at the Red Lake mine in northwestern Ontario, Goldcorp (G-T) reports.

The extensions were intersected as deep as the 40 level (about 1,790 metres), and early indications from drilling at higher levels suggest the zones may continue updip as well. The known dip length of the mine’s new mineralized zones has been extended to 480 metres.

Drilling at the lowest level returned grades as high as 256 grams gold per tonne (7.48 oz. per ton), and the mineralized structures range from 0.3 to 4.2 metres in core length, implying horizontal widths of around 1 metre.

Delineation drilling is in progress on the 34 level, where reserves are being blocked out in the newly outlined zones. Two intersections in one of the holes — 21.3 and 13 metres in length — carried gold grades of more than 100 grams, suggesting that another gold-bearing structure may exist, striking north across those that have already been mapped.

At higher levels, structural and alteration features resembling the new high-grade zones have been encountered in preliminary drilling, and mineralization typical of the mine’s productive sulphide zones was intersected in five drill holes. Gold grades in these holes ranged from 14 to 78.5 grams over lengths of 0.6-5.5 metres.

A labor dispute at the Red Lake mine, which started on June 23, cut into Goldcorp’s production figures, as did the closure of the Golden Reward mine in South Dakota.

Goldcorp’s earnings for 1996 were $11.8 million (or 18 cents per share) on revenue of $108.9 million, compared with a loss of $3.8 million on $125.6 million in the previous year. The 143,426 oz. of gold produced fetched an average realized price of US$379 per oz., against an average London spot price of US$381 per oz.; in 1995, Goldcorp produced 181,331 oz., which it sold at an average price of US$380 per oz.

The short production year at Red Lake meant that cash production costs rose to US$359 per oz. from US$339 the year before. Costs also rose slightly at the Wharf mine in South Dakota, bringing Goldcorp’s average cost per ounce in 1996 to US$275.