Omai’s performance improved in 2001

Despite being just a few years from the end of its operating life, Cambior‘s (CBJ-T) Omai open-pit gold mine in Guyana managed to turn in a record performance during 2001.

The operation achieved its highest-ever production rate, 354,200 oz. gold or a 7% more than in 2000, while direct mining costs fell 6% to US$214 per oz.

In the recent fourth quarter, Omai produced 91,100 oz. gold at a direct mining cost of US$198 per oz., compared with 86,800 oz. at US$231 per oz. in the corresponding period in 2000.

Cambior attributes the improved performance to higher head grades resulting from additional reserves in the Wenot pit, and to the milling of a higher proportion of hard rock.

During the fourth quarter, head grades average 1.52 grams gold per tonne, or roughly 0.2 gram gold above the remaining global reserves.

For 2002, Cambior’s production target is down significantly to 285,500 oz. gold at a direct mining cost of US$237 per oz. The decrease will result from the processing of a stockpile of low-grade material (0.7 gram gold), as well as the depletion (by the end of the first quarter) of higher-grade ore in the Wenot pit.

Capital expenditures at Omai for 2002 are estimated at US$3.9 million, down from previous years as a result of lower stripping ratios.

Overall in 2001, Cambior’s gold production from Omai and its two mines in Quebec totalled 615,000 oz. at a direct mining cost of US$213 per oz. In the fourth quarter, Cambior reported production of 160,700 oz. gold at a cost of US$197 per oz.

As Omai’s reserves are depleted over the next couple of years, Cambior will turn its attention toward the comparable Gros Rosebel project in neighbouring Suriname (T.N.M., Dec. 3-9/01).

As much Omai equipment as possible will be dismantled and shipped to the Gros Rosebel site, 80 km south of the capital, Paramaribo.

Tentatively slated to reach production in 2005, the Gros Rosebel project will process only weathered and transitional material that extends to depths of 75 metres in the southern portion of the deposit and 30 metres in the northern portion.

Mining would be carried out at the daily rate of 10,000 tonnes and a direct cost of US$168 per oz. The gold recovery rate is 92%.

Reserves calculated in a 1997 feasibility study stand at 25.2 million tonnes grading 1.7 grams gold per tonne (or 1.3 million contained ounces gold), but the project’s average annual gold production over a 7-year life would be 170,000 oz.

Capital costs are likely to be under US$80 million, whereas sustaining capital costs are pegged at US$20 million. Firmer numbers will be available once Cambior completes a definitive feasibility in mid-2002.

In the meantime, Cambior has renegotiated the terms of an agreement with the Surinamese government and its aluminum company, Grassalco.

Also, the government approved Cambior’s recent purchase of Golden Star Resources‘ (GSC-T) half-interest in Gross Rosebel and gave its unconditional commitment to grant exploitation rights to Cambior as soon as it approves the revised feasibility study and an environmental impact assessment.

The Surinamese government also granted a deferral of a US$2.5-million payment, previously due upon the granting of the exploitation rights, over a 3-year period beginning one year after the attainment of commercial production.

Grassalco has relinquished an option to buy up to a 40% interest in the project in return for the government’s taking on a 5% carried interest in the project, as well as a price participation of 6.5% on the amount exceeding a market price of US$425 per oz. gold, when applicable.

Cambior has also arranged to buy local power at a base cost of US3 per kWh when the quarterly market price of gold is under $310 per oz. The sum increases gradually to a maximum of US7 per kWh if the quarterly market price of gold exceeds US$375 per oz.