Westmin reports quarterly loss

A $10.7-million loss was reported by Westmin Resources (TSE) for its 1991 third quarter ended Sept. 30, a sizable increase over the $3.2-million loss reported for the comparable period a year earlier.

The company attributed this year’s third-quarter loss to production shortfalls at the Myra Falls base metal mining complex near Campbell River, B.C., and to lower metal prices and a higher Canadian dollar. The Myra Falls underground operation was affected by a maintenance shutdown, a major layoff and a change in mining methods. But Westmin said the changeover to bulk-mining methods is resulting in “dramatic productivity improvements,” which are expected to cause an improved fourth quarter. The company is continuing to drill its Gap zone discovery on the Myra Falls property. By the end of September, the zone was projected to have a strike length exceeding 180 metres (590 ft.), and it is still being extended. At the same time, development work to reach this new high-grade zone from the H-W mine is continuing. Westmin said preliminary reserves identified to date at the Gap zone indicate a net smelter return of about $160 per tonne at current prices, compared to roughly $55 per tonne for current production. In mid-November, Westmin reported a new discovery on its Myra Falls property, some 200 metres (656 ft.) southeast of the Gap zone.

A hole drilled in this area returned 1.8 metres (5.9 ft.) grading 0.4 grams (0.012 oz.) gold and 81.9 grams (2.8 oz.) silver per tonne, 1.1% copper, 2.4% lead and 15.2% zinc, plus 11.7 metres (38.3 ft.) of 1.0 gram (0.029 oz.) gold and 19.9 grams (0.58 oz.) silver, 2.9% copper, 1.1% lead and 9.5% zinc. The company said the new discovery could be a faulted extension of the Gap zone, or a new H-W main zone trend lens. It was noted, however, that the discovery is geologically more similar to H-W.

Either interpretation has implications for significant tonnage, the company reported, because the mineralization occurs in H-W stratigraphy which is untested from 400 metres (1,312 ft.) to the west to over 1,000 metres (3,280 ft.) to the east where the H-W main zone occurs.

Westmin also owns and operates a gold mining operation near Stewart, B.C., where excess mill capacity is being made available to outside parties on a custom-milling basis.