The production decline

Over the first six months of 1998, 97,562 ounces of gold were produced in the NWT, less than half the 222,307 ounces produced the same period last year.

Lupin, now in care and maintenance, averaged about 83,000 ounces every six months in 1997 and 1996.

Despite Lupin's January closure, the NWT's gold production in the first two months of 1998 remained only somewhat below last year's figures.

Production has significantly declined since February. Production was down 79 per cent to 6,083 ounces in June from 28,788 ounces in February.

Doug Ashbury
Northern News Services

NNSL (Aug 31/98) - Monthly NWT gold production has fallen to its lowest level in a decade.

NWT gold production was 6,083 ounces in June, the latest month for which statistics are available. The North's lone producing gold mine is Royal Oak's Giant mine.

"I've been able to go back to 1989 for monthly gold statistics and that's (June) the lowest amount," Jacqueline Paquette with Natural Resources Canada said. Paquette is spokesperson for NRCan's production of Canada's leading minerals publication.

Much of the North's declining gold production is due to the temporary closure of Echo Bay's Lupin mine.

Lupin was put into care and maintenance in January.

Another big factor is the Con mine strike.

And though the strike has directly effected about 185 members of the United Steelworkers Union of America Local 802, it can be argued it has been financially beneficial for the company.

Miramar hedged its gold position at around $415 US. That means it was able to fulfil its gold delivery contracts by buying gold on the open market at spot prices which are currently well below $415 US.

But Miramar may believe gold has, or is about to, bottom out.

"We sold our gold hedge at the end of July," Miramar spokesperson Brian Labadie said.

"We had over 100,000 ounces hedged at $410 US or $415 US. With gold so low, we collapsed the hedge forward instead of stringing it out (over several months)."

Labadie said the move has no bearing on the future of the Con mine.

Con miners have been on strike for about three and one-half months. Some Con miners have been able to get contract work at the Giant mine.

Royal Oak spokesperson Graham Eacott, could not be reached for Giant's July and August production figures.

Gold price has been abysmal for months. It traded down $5.60 US mid-day Thursday at $276.55 US