The Nickel Plate mine of Mascot Gold Mines (TSE) reported an operating profit of $8.3 million for the quarter ended March 31. During that period, Mascot paid off $10 million of its gold loan, equivalent to 17,581 oz gold, Paul F. Saxton, president, said in an interim report.
He also confirmed that Mascot has met one of two final completion tests prescribed by the Canadian Imperial Bank of Commerce which loaned it money to develop the project. Under the terms of the bank loan, Mascot had to produce 31,000 oz gold during a 90-day period, which it surpassed by 1,946 oz. In the final test, Mascot will have to produce gold at an approximate cost of $200(US) per oz over a 90-day period.
Mine development is on schedule but dilution has been greater than anticipated, he pointed out. Coupled with the fact that the mine will be working through a leaner section in the next 3-4 months, third quarter gold production is not expected to match second quarter output of 31,940 oz, he conceded. “The dilution factor is being examined and is expected to improve using experience achieved in the central pit.”
Saxton noted that operating costs have decreased and gold recoveries are averaging 85-90%. Plant modifications are currently under way which could reduce operating costs further. A new hopper clarifier has increased efficiency in the plant and a gyratory crusher should begin operation in late August followed by three drum filters in September. “A replacement for the existing tailings treatment system is being studied and is expected to become operational in October,” he added.
Underground development below the South pit has identified eight beds with ore grade mineralization; diamond drilling from surface and underground has been under way for several months now but no reserves will be calculated before fiscal year-end. Test mining is planned in the near future.
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