Great Lakes lowers costs at Mexican mine

The Lluvia de Oro gold mine, wholly owned by Great Lakes Minerals (GKM-T), attained planned production levels in December 1996.

The mine, situated in Mexico’s Sonora state, yielded 2,081 oz. gold that month.

Following the receipt of positive results from additional metallurgical testing, crushing operations at the mine were recently terminated. As a result, cash operating costs are expected to decline to US$210 per oz.

(including royalties) from the previous estimate of US$260 per oz.

In 1997, Lluvia de Oro is scheduled to produce 26,200 oz. gold. The current mine plan projects total production of 100,000 oz. over a 4-year mine life.

The plan does not take into account an additional resource of 113,000 oz.

gold; nor does it include several untested targets which will be explored in the first half of this year.

To allow flexibility for expanded gold production, a second leach pad, designed to accommodate 150% of the capacity of the first pad, is being constructed.

Meanwhile, at the company’s Palmarito silver-gold project in Sinaloa state, metallurgical testwork is under way, to be followed by infill and exploratory drilling.

On the financial front, Great Lakes is selling its interest in Lluvia de Oro and Palmarito to a wholly owned subsidiary, Newmex, for $16.35 million.

Newmex will issue to Great Lakes a promissory note for $14.35 million and 1 million Newmex shares valued at $2 each.

Great Lakes will distribute 1 million shares to its shareholders as a dividend; for every 32.4 Great Lakes shares held, shareholders will receive one Newmex share.