McCoy/Cove production growing for Echo Bay

Echo Bay’s total quarterly gold production rose to 142,301 oz, compared with 127,082 oz a year earlier. The biggest increase came from the McCoy/Cove mine, where quarterly gold production rose by more than 60%.

The company has expanded heap leaching capacity from 5,000 to 10,000 tons per day at McCoy/Cove. A new mill for agglomeration of crushed ore was added, and refinements have also been made to an existing 10,000-ton-per-day crusher, enabling it to operate at higher tonnages. A new 7,500-ton-per-day mill is expected to be completed in the second quarter, with commercial production anticipated in the third quarter.

Total cash production costs at McCoy/Cove were $189(US) per equivalent oz of gold, down from $279 a year ago. Those costs are expected to rise as the company begins processing ore in its new mill.

Based on a 14-year mining plan, cash production costs at McCoy/ Cove are expected to average about $230 per oz, reflecting milling costs and planned off-site smelting of sulphide concentrates.

Upon completion of the mill, McCoy/Cove’s total gold production is expected to reach 225,000 oz this year, and more than 330,000 oz next year.

An underground ramp is being driven toward a high grade sulphide ore zone about 600 ft beneath the surface at Cove. Another ramp is being driven into sulphide ore beneath the McCoy pit, one mile away.

At the Lupin mine in the Northwest Territories, gold production rose by 5% to 47,732 oz in the first quarter. Production costs there rose by about 10% to $222 per oz, up from $201 per oz last year. This increase was mainly due to a stronger Canadian dollar, which increased costs when stated in US dollars, Echo Bay said.

The company’s quarterly silver production more than tripled to 404,854 oz, up from 132,214 oz last year.

In April, Echo Bay agreed to deliver 175,311 oz of gold in 1996 in exchange for Swiss francs, sufficient to repay a Swiss franc bond liability due that year. In effect, this converts the company’s Swiss franc bond issue into a gold loan at $381.20 per oz.

Shares of Echo Bay Mines have traded at around $16 recently on The Toronto Stock Exchange, just above their 12-month low of $15.62.

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