Sigma struggles for profitability

The workforce at the Sigma gold mine in Val d’Or, Que., will be reduced by about 100 employees in early July.

Operator Placer Dome (PDG-T), which currently has 325 employees on site, says the reduction is part of a renewal plan aimed at improving the economics of the high-cost producer.

During the first three months of this year, cash production costs averaged US$488 per oz. gold. This rose to US$550 in May of this year, which led to a decision to stem losses.

Placer Dome says it has been striving for profitability at Sigma since June 1995, when a rockburst limited access to its primary ore zone. Studies have since shown that accelerated development of several alternative gold veins will not compensate for the shortfall sustained.

The renewal plan involves reducing production from underground (which accounts for the layoff of employees) and increasing production from the Sigma II open-pit mine. The company plans to mine higher-grade stopes underground to help offset the effect of lower grades from the pit.

The mill is expected to continue operating at a daily rate of 1,800 tonnes.

Production this year is expected to be 72,000 oz. gold — roughly 13,000 oz.

less than originally budgeted. In 1995, Sigma produced 78,000 oz. gold.

Longer-term elements of the plan are still being studied, including access to the ore isolated by the rockburst and the mine’s exploration potential.