Hemlo ups earnings and Holloway reserves

Underground tests have confirmed the grade, continuity and minability of the Holloway gold project in northeastern Ontario.

Geological reserves of the Lightning zone have risen to 5.2 million tonnes at 8.4 grams gold per tonne from 5 million tonnes at 8.7 grams. Ownership is divided among operator Hemlo Gold Mines (TSE) with 51%, Freewest Resources (TSE) with 34%, and Teddy Bear Valley Mines (CDN) with 15%. A feasibility study is expected next month, whereupon a production decision will be made.

Meanwhile, drilling has just wound down on property held by Hemlo (36%), Freewest (24%) and Teddy Bear (40%). The 3-hole, 1,652-metre program was carried out 1 km west of the Holloway joint venture and was designed to test geology similiar to that of the Lightning zone, to vertical depths of up to 540 metres. The deepest hole intersected 1.32 grams gold per tonne over 10.2 metres. Another program, consisting of four holes and 3,000 metres, is to begin shortly.

In other news, Hemlo’s 1993 year-end earnings rose to $45.6 million (or 47 cents a share), compared with $41.9 million (43 cents a share) in 1992. The increase is attributed to a weaker Canadian dollar and a stronger gold price. Although production of the yellow metal was down 7% to 458,000 oz. (compared with 492,000 oz. in 1992), the cost of production decreased slightly to $124 per oz. Also, the company’s average realized gold price rose to US$370 from US$359 per oz. in the previous year.

At Hemlo’s 60%-owned New World gold project in Montana, reclamation work has succeeded in reducing the impact of past mining and an environmental impact study is in progress. A first draft is expected by summer. Combined geological reserves from the Homestake and Miller Creek deposits of the New World project are 7.24 million tonnes averaging 8.95 grams gold and 36 grams silver per tonne and 0.74% copper.