Third quarter profits up
Doug Ashbury
Northern News Services
Yellowknife (Dec 04/00) - With two quarters under its belt since restarting, gold production costs at the Lupin mine are significantly below initial projections.
Prior to the mine's recommissioning earlier this year, owner Echo Bay expected cash operating costs of $245 US an ounce.
For the third quarter ended Sept. 30, Lupin's cash costs were $199 US an ounce, compared to $227 in second quarter. The recent lower cash cost was partly due to hedging Canadian dollars for Lupin expenditures which translated to a $15US per ounce savings. "We tightened our belts," said mine manager Bill Danyluk
Among the measures, a 20 per cent reduction in staff and moving to 11-hour days from 12, as well as a drop in per day ore processing.
Echo Bay mothballed the mine in January 1998, citing low gold prices. But after two-years and a multi-million dollar re-engineering, Lupin workers poured the first gold bar in April.
"We let every one take pictures with the gold bar. People took a sense of ownership," Danyluk said.
Danyluk adds that 50 of the mine's full-time employees are Inuit from Cambridge Bay and Kugluktuk.
In third quarter, Lupin produced 40,696 ounces of gold. the mine has produced 79,055 ounces since April.
Echo Bay reports a big turnaround in third quarter earnings. The company made $9 million US compared to a $19.9 million US loss in third quarter 1999.
Echo Bay has made $16.5 million US in the first nine months of 2000 compared to a $32 million US loss in the first nine months of 1999.
