SANTA BARBARA STATE, Honduras Exploration on Toronto-based GEOMAQUE EXPLORATIONS' Vueltas gold mine property in Honduras has made only minor improvements to the resource. The open pit mine and heap leach, which started commercial production in July 2001, has less than two years of minable reserves left.
"Now Geomaque is exploring other properties in Honduras, one of which is almost adjacent to Vueltas, but so far on a modest scale," said Geomaque CFO Ian Shaw.
In the first quarter, Vueltas produced 11,033 oz of gold at a cash cost of US$314/oz of gold sold, compared with 4,572 oz in same quarter of 2002 at cash costs of US$366/oz of gold sold. Mining a year ago had been interrupted to redevelop a leach pad, said Shaw. Production was hampered during the first quarter of 2003 by numerous mechanical breakdowns in the screening and crushing system, as well as higher than average rainfall in January.
Significant modifications were made to the material-handling system in April, including the addition of a primary jaw crusher, resulting in record production in May both in terms of tonnes processed and ounces placed on the pad.
"The whole thing is operating a lot more efficiently now," said Shaw, referring not just to recent adjustments but also in comparison with last year.
A court is expected to rubber-stamp Geomaque's acquisition of London-based MIDAS GOLD on or around June 20, following a shareholders' meeting to approve the deal on June 17. Geomaque and Midas will merge under a stock-swap agreement into a new company called DEFIANCE MINING CORP.
Privately-held Midas Gold has the Tasiast project in Mauritania. "We are very excited about Tasiast, it has a lot of potential, but we won't abandon Honduras. We will mine out Vueltas and hopefully find more resources and prolong the mine life," said Shaw.
The company reported Friday that it had raised Cdn$7.34 million (US$5.42 million) in a brokered private placement to fund the completion of a bankable feasibility study on Tasiast and general working capital purposes.
Shaw said the previously-announced merger with Australia's ST. BARBARA MINES, which had been expected to make the amalgamation with Midas a three-way affair, had been put on hold by mutual agreement. Geomaque reported a first quarter loss of US$1.33 million compared with a loss of US$1.31million in the year-ago period.
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