The Eskay Creek gold mine in northwestern British Columbia is up and running. The initial shipment of crushed and blended ore, destined for smelters in Japan and eastern Canada, was made early this year.
Owner Prime Resources Group (TSE) estimates that total capital cost will be about $73 million, which is 3% below the feasibility study estimate of $75 million.
Of this total, $55.6 million was spent in 1994. This year, the remaining $17.2 million will be used to buy underground mining equipment, upgrade the access road and provide additional working capital.
Prime also has a 40% stake in the Snip gold mine, operated by Cominco (TSE) in northwestern British Columbia.
The company’s share of production (contained in dore and concentrates) was 51,590 oz. in 1994, a 14% decline from 1993.
This decrease was attributed to a 15% decline in ore grade compared with the prior year, which, in turn, was the result of a mining plan designed to extract ore at the average life-of-mine reserve grade. As a result, cash operating costs at Snip increased by 12% to US$171 last year, compared with US$152 per oz. in 1993.
Prime reported net income of $7.1 million for 1994, compared with $4.6 million in 1993. The increase was attributed to higher gold prices, increased interest income and lower exploration and development costs. Homestake Mining (NYSE) owns about 51% of Prime’s shares and provides managerial and technical services under contract to Prime.
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