A warehouse fire has forced
No one was hurt in the fire, which destroyed most of the operation’s spare parts inventory. A faulty heater is apparently to blame, though a full investigation is under way.
Full production is expected to resume in early March, once the spare parts have been replenished.
In the meantime, the mine will operate at lower tonnage rates and be supplemented by ore from lower-grade stockpiles to maintain mill throughput.
In 2003, Julietta produced 118,145 oz. gold (nearly half the company’s total output) at a total cash cost of US$148 per oz. Production for 2004 is expected to slip to 102,000 oz. while cash costs are expected to hit US$177 per oz. as lower-grade ore is processed. Costs will also be affected by higher royalty taxes on a higher spot-gold-price budget of US$375 per oz.
Julietta had its first full year of commercial production in 2002: 108,844 oz. gold and 1.4 million oz. silver at an operating cash cost of US$119 per oz. and a total cash cost of US$159 per oz.
Bema owns 79% of the Julietta mine; Russian-based Nedra owns 11%, and Dukat Mining & Geologica, 10%.
Bema recently closed an offering of US$70 million’ worth of senior unsecured convertible notes due in February 2011. The notes carry a coupon rate of 3.25% per year, and the conversion price is US$4.66 per share — a premium of 37.5% over the volume-weighted average share price of US$3.39 on Feb. 11. Proceeds will be used to resume mining at the Refugio gold mine in Chile, and to develop the Kupol project in Russia.
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