Lacana expects to double gold production by ’89

During the next two to three years Lacana Mining Corp. hopes to more than double gold production from the current 60,000 oz per year to more than 120,000 oz per year, Dr William H. Gross, chairman and chief executive officer of Lacana, says.

Speaking to a group of mining analysts and brokers, Dr Gross emphasized the importance of gold production to the company’s bottom line. Lacana, which traditionally has been thought of as a silver miner, generated half of its 1985 revenue of $32.4 million from gold sales. This gold output came from varying interests in three Nevada- based mines: the Dee, Preble and Pinson.

Future production will come from the Sante Fe property, also in Nevada, the Sulphurets property in B.C., and possibly the Musslewhite deposit in northern Ontario. If these properties are placed in production, the company would experience a major increase in gold output, Dr Gross explains.

At the 30%-owned Sulphurets project, a decline ramp is being driven by partner Newhawk Gold Mines. The Sante Fe property will probably be placed in production as gold prices rise, the company says. Lacana has negotiated a 100% interest in this project. With $26.5 million in working capital as at June 30 and no debt, Lacana has enough cash on hand to finance its gold properties to production.

But the company could have a real “gold” mine on its hands at its recently acquired mica operation in Quebec. Purchased in late 1985 from Marietta Resources International for $6.5 million(US), the operation is being expanded to increase capacity by 25%. “We can’t keep up with demand,” Dr Gross said. “We’re working three shifts per day, seven days per week.”

Up to 20 grades of mica are produced at the plant, north of Montreal. An industrial mineral, mica finds applications in a variety of uses, principally as a reinforcer of plastic products. Average prices range around $300 per ton. A new specialty product known as E mica is being tested by the company. If successful, the product will sell for approximately $8 per lb. During the first half of 1986, mica sales accounted for almost 15% of the company’s revenue of $16.8 million. As the plant expands and sales increase, mica production is expected to play an important role in the company’s future growth.