Reserves upped at Red Lake

Following a review of its ore reserve calculation methodology, particularly with respect to grade, Toronto-based Goldcorp (G-T) has upped its reserve estimate for the high-grade mineralization at its Red Lake mine in northwestern Ontario.

At the end of July, Red Lake’s proven and probable high grade gold reserves stood at 1.9 million tons grading 2.02 oz. gold per ton. The new figures represent a 4% increase in tons and a 20% increase in grade compared to the end of 2000. Not included in the update are 139,000 tons of ore running 2.42 oz. per ton mined at Red Lake during the seven months ended July 2001.

High grade resources have grown to 474,000 tons at a grade of 2.7 oz., an increase in tons of 9% and in grade of 34% relative to the end of 2000.

Red Lake’s total proven and probable reserves (including lower grade sulphide mineralization) now stands at 3.2 million tons grading 1.33 oz., up from 3.2 million tons at 1.12 oz. at year end 2000. Total resources are pegged at 885,000 tons running 1.6 oz., up from 846,000 oz. at 1.2 oz. at the end of 2000.

The mine has a track record of better-than-expected performance. Earlier this summer, Goldcorp upped its production estimate for 2001 after reviewing the mine’s performance since Jan. 1, when commercial production began. The company now expects to produce 440,000 oz. at a cash cost of less than US$70 per oz. during 2001, up from its previous estimate of 400,000 oz. at US$75 per oz.

Mining of high-grade ore began during the 2000 development program, and by June 8, Red Lake had produced 240,000 oz. gold at a cash cost of US$57 per oz.

Goldcorp says that the new interim reserve estimate, audited and confirmed by Watts, Griffiths & McOuat, benefited from its mining and processing experience. The increase in tonnage is attributed to the realization that some material at the margins of the mineralization previously thought to be uneconomic has in many cases proven otherwise.

The current estimation does not include data from step-out drilling beyond the current margins of the orebody as defined at year end 2000.