LynnGold’s MacLellan mine struggling along

Those figures compare with gold production of 10,470 oz at a cost of more than $500 per oz a year earlier. LynnGold management is credited with a turnaround at the MacLellan mine where production increased by almost 40% last year. First-quarter tonnage mined was 98,736, about 10% below forecast. Management said the mine had difficulty keeping the mill supplied with ore early in the year and that lower than expected grades were encountered in some stopes.

The company incurred a first quarter loss of $437,000 or 3 cents per share compared with a loss of $1.79 million or 17 cents per share a year earlier.

During the quarter, development of the Rainbow zone continued on the 330-m and 240-m levels. Diamond drilling is being conducted on both levels to provide ore outlines for stope development. LynnGold said the drilling has encountered extensive visible gold and production from the Rainbow zone is planned for later this year.

A ramp, currently being driven to the 450-m level, reached the 420-m level by the end of the quarter. Production from the 450-m level is expected before year end and, when combined with Rainbow production, will provide higher grade ore to the mill.

A final feasibility study is expected this fall for the Burnt Timber open pit where reserves are estimated at 815,000 tons grading 0.098 oz gold per ton. The company plans to mine the open pit on a seasonal basis to provide additional feed to the mill. The capital cost for the project should be between $8-$10 million.

In light of the current high nickel prices, LynnGold is also re-examining the past-producing Farley nickel mine that it acquired last year from Hayes Resources (TSE). Stated reserves are 19.6 million tons grading 0.6% nickel and 0.32% copper. Geological interpretation of previous exploration drilling will attempt to identify additional ore reserves.

Shares of LynnGold have traded recently at around $1.95 on the Toronto Stock Exchange.

]]>