Development continuing at Francoeur mine despite mining halt

At Rouyn Mining Resources’ (TSE, ME) Francoeur mine, the focus has shifted from mining to reserve development. Mining was stopped in late June because it was too costly. According to President Jean-Guy Rivard, it wasn’t that mining or milling costs were excessive. Rather, the $9-10 per ton to ship ore to LAC Minerals’ East Malartic complex for custom milling scuttled profitable mining at Francoeur. LAC is a 50% owner in Francoeur and Rouyn is the operator.

Recently, LAC had fielded an expression of interest in its 50% share from a major company, but by press-time there had been no indications of a pending sale.

Rivard has directed the Francoeur staff to try to develop enough proven ore — one million tons is the target — to justify an on-site mill.

“My target is to build my own mill,” Rivard told The Northern Miner on a recent tour of the mine. “But I am still looking at other options,” he added. One such alternative is custom milling at a mill closer to the Francoeur mine. The mine is on the outskirts of Rouyn- Noranda, Que.

The current proven reserve is 534,000 tons grading 0.24 oz. gold per ton. Another 618,000 tons is classed as probable ore.

Rouyn can survive non-operating status for a couple of years from the cash in its treasury — roughly about $5.4 million in cash and short-term securities. Rivard wants a mill on-site by March, 1992.

He said he aims to raise money to cover mill capital costs through either a gold loan or conventional debt financing.