Having outlined more reserves,
Since it expanded the milling rate to 5,000 tons daily, the company has bumped up reserves by 9% to 33.7 million tons grading 0.1 oz. gold and 2.34 oz. silver per ton, plus 0.32% copper and 4.4% zinc. Miners would employ the new Penna shaft, as well as the existing shaft, to tap into that material.
The expansion is expected to increase gold production to 341,000 oz. in 2002, 373,000 oz. in 2003 and 396,000 oz. in 2004, up from an estimated 229,000 oz. for 2001. Cash costs, forecast at US$150 per oz. in 2001, should decrease by 15% with the extra output.
Assuming a gold price of US$280 per oz., the rate of return is pegged at 20%, and paypack is foreseen in three years.
About US$10 million is needed to expand surface facilities, and a portion of the US$30 million previously budgeted for underground development will be used for that purpose in 2002 and 2003. Plans call for a $100-million equity financing in Canada and the U.S. TD Securities and Merrill Lynch Canada are underwriting the offer.
The annual mine plan, including the proposed expansion, is subject to lender approval. In addition to its reserves, LaRonde hosts a 25.4-million-ton resource grading 0.18 oz. gold, 0.85 oz. silver, 0.73% copper and 0.41% zinc. The resource sits beneath the reserve and extends to 9,900 ft. below surface, where it remains open.
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