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Echo Bay reports loss
Lupin closes for rest of year by Doug Ashbury
NNSL (Feb 23/98) - Lacklustre gold prices and huge restructuring drove Echo Bay Mines financial results significantly into the red.
For 1997, the Colorado-based company reports a $600 million ($425 million
US) loss. That follows a $252 million ($176.7 million US) loss in 1996.
Part of the restructuring included closing the Lupin mine,
located on Contwoyto Lake northeast of Yellowknife.
The loss before the restructuring and other charges was
$84 million.
Echo Bay put Lupin into care and maintenance last month
laying off about 500 people. About 30 staff are needed to keep the mine
ready to re-open.
About 80 Northerners were affected, primarily in Cambridge
Bay, Kugluktuk and Yellowknife. Most of the mine employees lived in
Edmonton and commuted to the mine.
Echo Bay maintains Lupin's shutdown is temporary.
Lupin still has 534,000 ounces of gold in proven and probable
reserves.
The mine was placed in care and maintenance to "maintain
its integrity and enable it to open when gold price improves," the company
said.
"The earliest we could open the mine is 1999," Echo Bay
spokesperson Robbin Lee said.
Re-opening the mine hinges on gold prices and the ice road
which opens yearly around early February.
Echo Bay trucked its first load of fuel for care and
maintenance via the ice road last week, Lee said.
Lupin's 1997 gold production was similar to 1996. Last
year, production totalled 165,335 ounces compared to 166,791. Cash costs
were $406 an ounce last year and $427 in 1996.
Lupin's fourth quarter production was up while costs were
down. Gold production rose 19 per cent to 44,057 ounces from 36,938 ounces.
Quarter cash costs were $364 compared to $490 for the same quarter a year
earlier.
Echo Bay has hedged all 1998 production at $486 and 298,000
ounces at $529 for 1999.
The company anticipates producing about 510,000 ounces of
gold this year, down from 721,075 ounces produced last year. |