Golden Giant suspension hurts Hemlo’s bottom line

Production problems at the Golden Giant mine, near Marathon, Ont., took their toll on Hemlo Gold Mines (TSE) in 1995.

Operations were suspended for 20 weeks following a 13-week strike and a 7-week shutdown for shaft repairs. The shaft work was completed in December, and the mill reached full production by mid-month.

The downtime cost Hemlo $12.5 million, and annual gold production from the mine fell to 233,716 oz., compared with 446,850 oz. in 1994.

As a result, total production was 264,400 oz., compared with a target of 450,000 oz. (In 1994, production reached 488,900 oz.)

On a brighter note, development at the Holloway project, near Matheson, Ont., is progressing, and production is expected by the third quarter.

Proven and probable reserves exceed 5.6 million oz., and the company anticipates annual production will range from 430,000 to 450,000 oz. in 1996. The company will also continue exploration programs on projects in Australia and Ghana.

Drilling at the Moyagee gold property in Western Australia has outlined mineralization over an area measuring 300 by 300 metres. Intercepts include 31 grams gold per tonne over 6.2 metres, 16.6 grams over 8 metres and 16.7 grams over 3.1 metres. The zone remains open, and Hemlo will continue to drill its on-strike and downdip extensions. The company holds interests ranging from 52.5% to 70% in various of the claim groups that comprise the 82-sq.-km property.

At its Dunkwa property in Ghana, Hemlo has identified a 75-metre-wide zone of mineralization on surface. Drilling has returned intercepts, beginning at surface, grading 6.4 grams over 60 metres, including 11.1 grams over 28 metres and 2.5 grams over 123 metres.

The company is working to earn a 65% interest in the property from Birim Goldfields (CDN) by spending $7 million over a 4-year period.

Hemlo has increased its exploration budget to $19.5 million for 1996, compared with $16.5 million in 1995.