A mechanical failure in the grinding circuit at the Holt-McDermott mill, east of Matheson, Ont., is affecting both producing mines in the Harker-Holloway gold camp.
Repairs are under way at the mill, which is part of the Holt-McDermott operation of Barrick Gold (ABX-T). The neighboring Holloway mine, owned jointly by Battle Mountain Canada (BMC-T) and Teddy Bear Valley Mines (TBV-T), had been delivering most of its ore to Holt-McDermott as well; the Macassa mill in Kirkland Lake, operated by Kinross Gold (K-T), processes the remainder. The interruption will reduce Holloway’s production to the 2,000 oz. per month produced at Macassa.
Battle Mountain and Teddy Bear are preparing themselves for a delay that could extend to the end of the year. About 40% of the workforce at Holloway has been laid off, while Barrick has yet to make any announcement regarding its own operation.
Production costs at Holloway have been about US$100 in excess of the estimated figure of US$233 per oz. Development of higher-grade ore on the eastern side of the deposit had been expected to reduce unit costs, but with production reduced, any improvement in costs will likely be delayed.
Teddy Bear, which owns a 15.35% interest in the project, has taken a $4.9-million writedown on its Holloway asset for the year ended March 31, 1997, and has posted a net loss of $6.7 million or $1.26 per share.
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