Doug Ashbury
Northern News Services

NNSL (May 19/99) - Miramar Mining Corp., owner of Yellowknife's Con mine, plans to produce half-a-million ounces of gold from the property over the next five years, according to a strategic update the company released Friday.

"Miramar recently announced the Con mine will shortly resume gold production, building up to an expected annualized production rate of 100,000 ounces of gold per year," the company said.

"Operations can be sustained at this level for approximately five years, based on current reserve estimates," the company said.

Average cash costs are expected to be $280 US an ounce.

The five-year mine plan could be extended through a resumption of exploration activities and further reductions in operating costs, Miramar said.

Miramar is evaluating alternative approaches to funding of exploration expenditures, including discussions with various stakeholders.

Based on a gold price of $325 US and on material already substantially developed, Miramar estimates proven and probable reserves are at 1.37 million tons grading .34 ounces gold per ton for a contained 471,000 ounces of gold.

This reserve provides the basis for a five-year mine plan. Materials outside this are classed possible reserves and resources.

Possible reserves total 1.2 million tons grading .31 ounces gold per ton for 365,000 ounces gold. Additional capital development would be required to bring these potential reserves into production which could be justified at higher gold prices.

Resources in addition to reserves total 3 million tons grading .26 ounces ton for an additional 790,000 ounces of gold.

Con's reserve fluctuated with the price of gold. The company says there is about a 20 per cent reduction in reserves when gold price drops from $325 US to $300 US.

Gold price recently fell below $280 US after Britain's Central Bank announced is would sell off 60 per cent of its gold bullion. Miramar continues to participate in gold hedging to realize per ounce figures above spot prices.

Miramar estimates Con's total reserves and resources at 5.6 million tons grading .291 ounces per ton for 1.63 million ounces.

In 1998, prior to the strike, Con produced 23,447 ounces of gold from 86,026 tons of ore milled (average grade, .296 ounces gold per ton).

For the full year 1997, Con produced 94,400 ounces of gold from 337,478 tons ore milled grading .285 ounces of gold per ton.

Miramar spokesperson Brian Labadie could not be reached for comment.