Nine-month and quarterly revenues increased for Cambior (TSE), even though production was interrupted at the company’s Omai mine in Guyana.
For the first nine months of 1995, revenues amounted to $284.5 million, generating earnings of $1.5 million (or 3 cents per share). Revenues for the comparable period in 1994 were $226 million, for a loss of $4.7 million (or 10 cents per share).
Third-quarter revenues were $87.5 million (compared with $74.8 million last year), and the net loss for the period was $6.3 million (against a loss of $15.4 million in 1994). The increase in revenue is attributed to startup at the Bouchard-Hebert zinc-copper mine, northeast of Rouyn-Noranda, Que.
Commercial production of gold at the Omai mine could resume by the end of the year. The mine has been shut down since mid-August, when the tailings dam spilled tailings process water into the nearby Omai and Essequibo Rivers. A commission of inquiry is to report its findings to the National Assembly in early December.
The incident resulted in a direct net cost of $2.2 million to Cambior. Moreover, the company foregoes about $3.4 million (US$2.5 million) for each month the operation is shut down and incurs monthly costs of $1.4-2.7 million (US$1-2 million).
Cambior will incur $6.8 million (US$5 million) in capital expenditures to return to production, including a new tailings pond. The Guyanese government recently granted a request from Cambior that construction of the new pond be allowed to go ahead. It has a surface area about five times that of the old pond but is not as deep. The design incorporates additional seepage collection zones, and allows for a cyanide-destruction cycle and discharge of treated water (although the company has no immediate plans to discharge treated process water).
Expansion of the Omai mill, to 18,000 tonnes per day from 12,000, was delayed two months but should be completed by the end of March 1996.
Cambior reports that several civil claims arising out of the incident have been settled for an aggregate amount under $10,000. Other actions have yet to be settled, but the company expects they will be affordable.
Consulting engineering firm Knight Piesold of Vancouver, B.C., released a statement reiterating that the firm, which designed the tailings dam and supervised the first phase of its construction, bears no responsibility for the failure.
Knight Piesold had provided site supervision up to December 1992, at which time the dam had been constructed to the 500-metre elevation. The firm believes the leak occurred above that level in the raised embankment of the dam, built between 1993 and 1995.
Operating costs were higher, and gold production was lower, at the Valdez Creek placer mine in Alaska.
Production was steady at Cambior’s other divisions, with the exception of the Doyon mine, a joint venture with Barrick Gold (TSE).
The company plans to enter production in early 1996 at the Grevet zinc project, northeast of Val d’Or, Que., and to complete prefeasibility studies at four international projects: La Granja in Peru; Metates in Mexico; Gross Rosebel in Suriname; and El Pachon in Argentina.