Cambior takes major writedown at Valdez Creek

Mining operations at the A8 pit of the Valdez Creek placer gold mine in Anchorage, Alaska, indicate the average grade is 30% lower than expected.

Consequently, owner Cambior (TSE) has reduced the net asset value of the mine by $16.7 million. It has also decided to concentrate efforts on high-grade areas. The new plan calls for excavation work to continue until next May and for the wash plant to operate until next September. On the plus side, the writedown, combined with previous losses at operations in the U.S., has generated a US$20-million tax benefit for the company. This benefit will be applied to future earnings generated by U.S. operations. In other news, Cambior is preparing an environmental impact study for the Carlota copper project in Arizona. It is due in October.

Envisaged as an open-pit project, the Carlota has proven and probable reserves of 106.7 million tons averaging 0.44% copper. Annual production during the first 10 years of operation is projected at 29,700 tons. The capital cost is estimated to be US$80 million, and the production cost US58 cents per lb.