At McWatters’ Sigma-Lamaque open-pit operations in Val d’Or, the current route of Highway 117 passes over key, shallow gold reserves that were only discovered in recent years. Now, after more than a year and a half of negotiations, McWatters has received all necessary approvals for relocating the highway, and construction of the diversion is under way.
Financing for the $7.1-million relocation was made possible under the Canada-Quebec Infrastructure Work Program, with the Quebec government chipping in $4.4 million, in the form of a grant, and the federal government granting another $2.2 million. McWatters has pledged the remaining $500,000, and the town of Val d’Or will manage the project.
Meanwhile, McWatters is working to reorganize its finances and says it is in discussions with various parties regarding the resumption of mining at Sigma-Lamaque — a move that would require a significant injection of capital. (In mid-February, McWatters simultaneously halted mining at Sigma-Lamaque and obtained creditor protection.)
At McWatters’ nearby underground Kiena gold mine, the company is seeking additional funds to carry out an exploration program that could extend mine life into 2002.
In the recent second quarter, McWatters posted an $832,000 loss (2 per share) on revenue of $9.4 million, compared with a $1.6-million loss (3 per share) on revenue of $16.5 million in the corresponding period last year.
Gold production during the recent period totalled 20,638 oz., down from 38,396 oz. a year earlier, owing to the Sigma-Lamaque suspension.
On a brighter note, the Kiena mine provided a quarterly operating income of $1.7 million as cash costs fell 22%, year-over-year, to US$194 per oz. Total production costs dropped 15% to US$275 per oz. while production was sold at an average of US$285 per oz. during the quarter.
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