River Gold adds ounces at Eagle River (February 27, 2004)

Two new discoveries last year by Toronto-based junior River Gold Mines (RIV-T) near its Eagle River high-grade gold mine near Wawa, Ont., have allowed the company to add 136,500 oz. to its reserve base.

The discoveries added 325,000 tonnes of proven and probable reserves grading 12 grams gold per tonne. That more than replaced last year’s output from Eagle River, which totalled 70,700 oz. gold at a recovered grade of 9.1 grams gold.

The associated Mishi pit contributed an additional 3,300 oz. gold at a grade of 3.8 grams gold.

Overall, River Gold’s production in 2003 totalled 74,000 oz. at a cost of US$294 per oz., compared with 78,800 oz. gold at US$229 per oz. in 2002.

At year-end, reserves at Eagle River totalled 1.27 million tonnes grading 10 grams gold, equivalent to 407,000 contained ounces, whereas Mishi’s reserves stood at 193,000 tonnes grading 9.3 grma gold, or 437,000 oz.

An additional 1.2 million tonnes grading 5.1-6.6 grams gold lie in the indicated resources category at both operations combined.

“The building blocks for long-term growing production are set,” the company says. “However, this will require continued investment in development, and a higher Canadian-dollar gold price would be most welcome.”

However, the company lost C$857,000 (2 per share) on revenue of C$37.4 million, compared with a loss of $4 million (10 per share) on revenue of C$38.4 million in 2002.

The company notes that a “series of unforeseen challenges” ranging from mechanical failures to catastrophic lightning strikes led to more than 30 days of unscheduled downtime at the mill. Primary crusher and loading-ramp rebuilds at the mill were undertaken, as were powerline repairs and replacement of electrical transformers.