The recent downgrading of reserves at the Lawyers mine in north-central British Columbia, coupled with low gold and silver prices, has prompted Cheni Gold Mines (TSE) to consider suspending mining operations.
In order to comply with labor laws in the event of a shutdown, the company has issued 8-week termination notices to 95 employees at the mine. The layoff would leave 50-55 employees at the operation, primarily in the mill and surface facilities.
Cheni recently downgraded its reserves for a second time. Proven minable reserves in the Cliff Creek north zone are now stated at 153,700 tons grading 0.20 oz. gold and 5.8 oz. silver per ton, compared with the previous figure of 425,000 tons grading 0.18 oz. gold and 7.7 oz. silver.
Cheni also has a stockpile of ore from mining at the company’s nearby Al claims. The stockpile is estimated to contain about 60,000 tons grading 0.39 oz. gold which will be blended with Cliff Creek ore.
Robert McMorran, corporate secretary, said milling operations are expected to continue through to mid-1992, using stockpiled Cliff Creek ore as well as the Al claim stockpile.
McMorran noted that the company may be able to resume mining operations if metal prices improve.
The primary debt associated with the mine is a $5-million loan from the company’s main bank credit facility. Cheni also owes its parent, Cheni S.A., about $5.4 million and the provincial government about $3.8 million.
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