St Andrew on target with Stock Twp mine

Production is on target at the Stock Twp., Ont., gold mine of Toronto-based St Andrew Goldfields (TSE) despite recent drops in the price of gold which have taken a heavy toll on most junior mining companies. The mine, brought into production last year on schedule and within budget, has been running as expected. It is set to churn out a planned 27,000 oz. of gold in 1990, shareholders were told at the annual meeting.

The milling rate at the Stock Twp. operation was recently increased to 700 tons per day from 500 tons per day, and a decline is being completed to provide access to the mine’s higher-grade ore reserves on the 6th level, about 880 ft. below surface.

Development of the new level will add greater flexibility to the overall mining plan and open up an ore zone which hosts minable reserves of 577,882 tons grading 0.18 oz. gold per ton.

“We still anticipate producing 27,000 oz. this year,” said Vice- President David Vaughan. “We’re doing everything we can to bring costs down, too,” he added.

Like many other junior gold mining companies across Canada these days, St Andrew is caught in a cost- price squeeze brought on by falling bullion prices and high mining costs. Gold recently hit a 4-year low of US$345 in London, before recovering to around the US$349 level. The company’s shares, of which there are about 13 million issued and outstanding, have traded recently at $1.15 within a 52-week range of $1-2. St Andrew is 53.6% owned by parent Quebec Sturgeon River Mines (TSE).

During the first quarter, the Stock Twp. mine had cash operating costs of $377.25 per oz. and received an average price of $469.79 for its gold production. First-quarter production totalled 7,243 oz., with grades averaging 0.15 oz. gold per ton and mill recovery reaching 94.4%

“It has been somewhat depressing to bring the Stock Twp. mine into production and then see the gold price take a dramatic drop,” said Vaughan. “There’s no interest in gold shares now, and we’re suffering just the same as all the other junior gold producers.”

As part of a corporate reorganization, St Andrew is also purchasing the property assets of affiliate Phoenix Gold Mines (TSE) in exchange for nearly 2.3 million shares of St Andrew. Phoenix holds a 40% interest in the Ludgate gold deposit in Michaud Twp., which hosts preliminary reserves of nearly 650,000 tons averaging 0.17 oz. gold.