Thorunn Howatt
Northern News Services

Yellowknife (May 01/01) - Gold prices have had a great run lately, climbing to the highest levels since 1999 and topping $310 US an ounce. Miramar Mining Corporation is relishing the gold rush as its Con and Giant mines keep up with predicted production.

"However, the temporary suspension of the autoclave caused by the collapse of the roof at the oxygen plant will have an adverse impact to the second quarter production profile," said Tony Walsh, Miramar's president.

Last March the roof of an oxygen plant building collapsed. As a result, autoclave operations were temporarily suspended. Forced into stockpiling concentrates, Miramar has a temporary increase in inventories until the concentrates are processed. The company expects the oxygen plant to be back in full operation by the end of June. An estimated $2 million will be needed to repair the oxygen plant and put up a new building.

Investors are seeking the metal as a safe haven from the weakening U.S. dollar and political tension in the Middle East. The recent rally in bullion prices has broken the psychological $300 US barrier for only the third time in the past three years. Inflation is the main reason for the rise in gold price. "The U.S. dollar relative to the Canadian dollar and other currencies has been sliding lately and there are a number of countries that formerly used gold to secure wealth that instead decided to hold onto U.S. dollar-based investments," said investments advisor Todd Ferguson.

There was a major shift in the last three or four years towards owning U.S.-based investments instead of gold.

"Now with the U.S. dollar falling a little bit, that may cause people to re-think their strategy," said Ferguson.

Con and Giant's cash costs of $240 US per ounce were lower than budget. Operating costs were kept down thanks to a reduction in heating fuel consumption, power and the autoclave suspension.

Miramar expects to reduce costs even further to under $240 US per ounce, with similar levels of production through most of 2003.

During the first three months of the year Yellowknife's Con Mine delivered 76,027 tons grading 0.37 ounces per ton of gold, and the Giant Mine delivered 17,467 tons grading 0.39 ounces per ton of gold for processing at the Con mill.

Together the two mines produced and shipped 31,750 ounces of gold and stockpiled a further 2,000 ounces in refractory concentrates.