McWatters getting highway moved at Sigma

McWatters Mining‘s (MCW-T) intense lobbying of three levels of government to move a portion of the main highway that runs into Val d’Or, Que., has paid off handsomely for the junior gold producer.

At the company’s Sigma-Lamaque open-pit operations, Highway 117 passes over shallow gold reserves. These were discovered in recent years.

After more than a year and a half of negotiations, McWatters has received all the necessary approvals to relocate the highway. The company says construction is under way.

Financing for the $7.1-million relocation was made possible under the Canada-Quebec Infrastructure Work Program. The Quebec government will chip in a $4.4-million grant and the federal government will provide another $2.2 million. McWatters has pledged the remaining $500,000 and the town of Val d’Or will manage the project.

McWatters says it is in discussions with various parties regarding the resumption of mining at Sigma-Lamaque. This will require a significant capital injection and the company is reorganizing its finances.

In mid-February, McWatters halted mining at Sigma-Lamaque and obtained creditor protection.

At the nearby Kiena gold mine, the company is seeking funds to carry out an exploration program. This could extend the mine’s life into 2002.

McWatters has also released its second-quarter results, which amounted to an $832,000 loss (2 per share) on revenues of $9.4 million, compared with a $1.6-million loss (3 per share) on revenues of $16.5 million during the same period last year.

Gold production during the quarter totalled 20,638 oz. This was down from 38,396 oz. a year earlier, due 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 by 22% year-over-year to US$194 per oz. and total production costs dropped 15% to US$275 per oz.

Production was sold at an average US$285 per oz. during the quarter.