In a deal worth US$5 million, Kinross Gold (K-T) has picked up two groups of properties in the prolific Eastern Goldfields region of Western Australia.
The first, dubbed Mt. Henry, covers 545 sq. km near the Norseman mining district and includes the advanced-stage Mt. Henry and Selene deposits.
These deposits have been partially delineated by previous owners and contain a combined near-surface resource of 28.9 million tonnes grading 1.3 grams gold per tonne using a cutoff of 0.77 gram.
Geologically, the deposits occur nearly 2 km apart in a north-south-striking shear zone. Mineralization is primarily controlled by the contact zone between an ironstone formation and a mafic volcanic-sedimentary unit.
Initially, Kinross plans to drill four large-diameter holes in each deposit for metallurgical purposes, along with infill drilling for reserve estimations. A number of stepout holes will also be drilled to test for mineralized extensions.
The second property, dubbed Broad’s Dam, is situated 45 km northwest of Kalgoorlie. Mineralization there is associated with a regional shear zone called Zulieka, which hosts several other deposits in the Eastern Goldfields district.
Kinross bought the properties through the court-appointed administrator of a bankrupt Australian firm, Australasian Gold Mines.
On the financial side, Kinross reported earnings of US$2.19 million (or 1cents per share) on revenue of US$42.57 million for the three months ended Mar. 31, compared with a loss of US$2.08 million on US$43.33 million in the corresponding period of 1997.
Gold production between the two periods rose to 106,467 oz. from 92,392 oz.
and silver output rose
to 798,00 oz. from 109,948 oz. Average cash costs fell to US$230 per oz. gold-equivalent from US$307. However, when reclamation, depreciation and amortization costs
are factored in, costs in the last quarter rise to US$296 per oz.
gold-equivalent.
Nearly half of the company’s gold production in the first quarter came from the Hoyle Pond underground mine near Timmins, Ont. There, output climbed 47% to 46,404 oz., whereas cash costs dropped 35% to US$154 per oz. The improvements are attributed to higher throughput at the Bell Creek mill and to the mining of higher-grade ore.
In nearby Kirkland Lake, notable improvements were also made at the Macassa underground gold mine, which was hobbled by a rock burst last year that prevented access to deep levels, resulting in lost production, increased cash costs and a US$24-million writedown. In the past quarter, production rose to 15,039 oz. gold, 8% higher than first-quarter output in 1997, as a result of higher throughput from the mine’s upper levels. Cash costs dropped US$80 to US$368 per oz. gold.
Kinross expects Macassa’s costs to continue falling over the remainder of the year as higher-grade stopes are mined.
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