Production was lower than anticipated because of the mining of lower grade ore (including development muck) and the absorption of fine gold in the milling circuit during the tune-up phase. “We anticipate that production levels will gradually increase throughout 1989 and, in fact, production in May was over 4,800 oz,” said Keevil.
The mine and surface complex are operating very well which “bodes well for the future profitability of this venture,” he added. Recoveries recently exceeded 90% and average daily throughput for the first five months was 1,050 tonnes and 1,300 tonnes during May. The plant has operated at rates exceeding 1,500 tonnes, he stated.
Keevil predicted that little in the way of capital expenditures will be required when the Casa Berardi West project is brought into production because of the mill’s performance.
Development work there is proceeding well with drifting and underground drilling in progress at the 300 m level. Scheduled for completion in 1990 at a total cost of $30 million, the new mine will almost double annual gold output from the property to 95,000 oz of which Golden Knight’s share will be 38,000 oz.
Operating costs have been averaging about $265(C) per oz and they are expected to drop when Casa Berardi West comes on stream. In the first quarter, the company reported net earnings of $763,000 or 7 cents per share and cash flow from operations of $1.6 million or 14 cents .
“Golden Knight remains in a very solid financial position, with over $13 million in working capital at May 31 and no long-term debt. We remain on the lookout for new opportunities and are in a strong position to take advantage of them as they become available,” he said.
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