Valdez Creek could re-open

Representatives from MVP Capital (TSE) and Cambior (TSE) flew into Valdez, Alaska, recently to take a look at the Valdez Creek placer gold mine.

After producing 60,431 oz. of refined gold last year, the mine was shut down in October and it is now being kept on a care and maintenance basis pending an increase in the price of gold.

If gold continues to trade above US$400 per oz., it is possible that mining could begin again in March, said Richard Brissenden during a telephone call from Alaska. Brissenden was chairman of Camindex Mines before the Toronto company became a wholly owned subsidiary of MVP.

But no definitive decision has or could be made until information collected by Brissenden and his team is presented to a committee of executives from MVP Capital, Cambior and American Barrick Resources (TSE).

MVP holds a 51% stake in the Valdez Creek operation while the other 49% is held by American Barrick and Cambior.

The main item under consideration is the likelihood of Valdez Creek turning a profit after US$6 million has been spent to divert a local river and enable mining teams to extract the ore underneath.

Geological reserves at the project stand at 627,000 refined oz., including 316,000 oz. in the proven and probable category while the balance is defined as possible reserves.

“We want to make sure it’s worth making the commitment before going ahead,” said Brissenden who is encouraged by the fact that Valdez Creek showed a small third- quarter profit at a cash cost per ounce of US$340 per oz.

Gold production of 60,431 oz. for the first 10 months of 1989 was up significantly from the 44,470 oz. produced in all of 1988.

“Shutdown occurred in an orderly fashion and everything is being kept on care and maintenance,” he said. Accompanying Brissenden on the Valdez Creek visit are Camindex President Doug McKenzie, and Serge Vezine, Cambior’s vice-president of operations.