Vancouver — London-based
The deal between Guinor and Rio Tinto was subject to a right of first refusal by the government of Indonesia, which earlier rejected the offer to purchase the processing plant at the dormant Kelian gold mine on the island of Kalimantan.
Guinor intends to install the plant at its Lefa gold project in Guinea where the company is producing gold via heap-leaching. This phase of operations is nearing its end and will be replaced by a larger mine incorporating the Kelian carbon-in-leach plant.
Earlier this year, the company completed a bankable feasibility study for an expanded mine capable of producing 320,000 oz. gold annually over seven years. The plan calls for the Kelian plant to be commissioned by the end of 2006. Cash costs are expected to average US$254 per oz. over the life of the expanded operation.
Guinor operates the Lefa mine through an 85%-owned subsidiary. At last report, the project had proven and probable reserves of 40.5 million tonnes averaging 1.7 grams gold per tonne, or about 2.3 million contained oz. The reserve is part of a larger measured and indicated resource of 68.1 million tonnes grading 1.6 grams, or about 3.43 million contained oz.
In the latest quarter ended March 31, the Lefa heap-leach mine produced 12,773 oz. gold, down from 23,365 oz. a year earlier. Cash costs soared to US$549 per oz., compared with US$383 per oz. in the first quarter of 2004.
The company posted a net loss of US$3.3 million for the quarter, compared with a net loss of US$4.4 million in the year-earlier period.
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