Holt-McDermott first min in Barrick group to unionize

Representatives of about 177 hourly wage employees at American Barrick Resources’ (TSE) Holt-McDermott gold mine near Kirkland Lake, Ont., will meet this month to negotiate their first contract as a unionized workforce. Citing concerns over job security and working conditions, the employees have voted to be represented at bargaining talks by the United Steelworkers of America.

“Some employees are afraid that the life of the mine won’t go past seven years unless more orebodies are found,” said United Steelworkers staff organizer Wesley Dowsett. He was referring to the fact that Holt-McDermott reserve figures include only 2.6 million tons of proven and probable material. Reserves in all categories stand at 4.6 million tons grading 0.136 oz. gold per ton. A Barrick spokesman said the recent certification would not necessarily affect the economic viability of an operation where the company is attempting to reduce its production costs to US$260 from US$284 per oz. and find more ore.

“We don’t expect it to affect the costs because we feel the wages we are paying are very competitive,” said Jeremy Garbutt, Barrick’s chief financial officer.

The average hourly wage at Holt-McDermott, which produced 63,354 oz. gold last year, is about $17 per hour. A relatively low-grade operation, it is so far the only one of four gold mines operated by Barrick to be unionized. It is also the third largest in Barrick’s portfolio of six mines which together churned out 467,837 oz. of the yellow metal in 1989.

As recovered grades are expected to rise this year to 0.13 oz. from 0.11 oz. in 1989, production at Holt-McDermott should also increase to 70,000 oz., according to Louis Dionne, Barrick’s vice- president of Canadian operations.

While Dionne admitted that recoveries have been disappointing, he attributed the low operating costs ($US284 per oz.) to a mining method consisting of open stopes and an absence of backfill. “We also have to give some credit to the people working for us,” he said.

He predicts that since 20% of last year’s mill feed consisted of development ore, the cost per oz. should drop in 1990 to US$260 per oz. “If we can maintain our production costs at between US$260 and US$280, we should be protected by forward sales,” Dionne told The Northern Miner.

Barrick says 95% of the 565,000 oz. gold it expects to produce this year at all operations has been hedged to allow it to realize a minimum average price of US$421 per oz. Through various put and call options, the company can also share in up to 75% of gold price increases to $507 per oz. and 36% in excess of $507.

Meanwhile, hopes for better recoveries at the 1,360-ton-per-day Holt-McDermott mine ride on the size of the property where gold mineralization has been outlined over a strike length of over 30,000 ft.

While Barrick continues to drill along strike, the company will spend $1.5 million this year to extend the shaft an extra 300 ft. down to a depth of 1,800 ft. New stopes have also been opened up on the Worvest and Three Star properties, about 3,500 ft. west of the shaft. Proven reserves on those claims, accessible via drifts on the 490-ft. and 820-ft. levels, stand at 1.1 million tons grading 0.12 oz.

Having reached the Mattawasaga zone, 3,000 ft. east of the shaft, crews will do more definition drilling and the deposit should be ready for production by the end of the year. Probable and possible reserves at Mattawasaga stand at 880,000 tons of grade 0.126 oz. Despite Barrick’s attempt to appeal the certification of its Holt-McDermott workforce, Dionne said relations between management and labor are good.