Good Mann results buoy Campbell

The Joe Mann gold-copper mine of Campbell Resources (TSE) in the Chibougamau area of Quebec produced 35,400 oz. gold during the first five months of 1991 and is well on its way to meeting its targeted 75,000 oz. for the year, shareholders learned at the recent annual meeting in Toronto.

“Gold production for the month of May was 8,300 oz., which is a record monthly gold production for the Joe Mann mine, for Campbell and for the whole Chibougamau camp,” President John Kearney said.

Campbell, which reported a net profit during the first quarter of this year of slightly more than $1 million (one cent per share), produced 67,489 oz. and 1.3 million lb. copper from Joe Mann in 1990. The mine’s cash operating cost in 1990, after copper and silver byproduct credits, averaged US$277 per oz. gold (compared with US$274 the previous year).

During the first three months of this year, cash costs at the mine averaged US$270, Kearney said.

In early May, Campbell closed out its forward sales contracts on 180,000 oz. gold and realized a profit of $13.5 million. The company used the proceeds to reduce its gold loan from 41,500 oz. to 13,000 oz., or the equivalent, it said, of a debt reduction from $19.5 million to about $6 million.

At the end of May, Campbell sold its 30% limited partnership interest in LAB & Co. Ltd., a Quebec asbestos producer, for $13 million in cash and a 5% net profits royalty (which, for accounting purposes, the company believes is currently worth $5.5 million).

Campbell’s total debt sits at $7.6 million, of which about $6 million is in the form of a gold loan on which the company pays interest of less than 4%.

The company’s major shareholder is Northgate Exploration (TSE) with a 38.2% interest. Campbell operates only the Joe Mann mine in the Chibougamau area, having closed its three other gold-copper mines there. Joe Mann has 241 employees.

To increase the size of Joe Mann without interrupting production, the company decided in 1989 to sink a new shaft to an initial depth of 2,010 ft. Current thinking would see that shaft being deepened to 3,000 ft., the work scheduled to begin in January, 1992. Kearney said the deepening and related development work could take 18 months to complete and cost $10-11 million.

Joe Mann reserves (proven, probable and possible) at the end of 1990 stood at 3.4 million tons averaging 0.26 oz. gold per ton, Kearney said. Drilling has confirmed that additional reserves exist at depth.

Outside of Canada, Campbell is active in Mexico where it has a number of prospects. At one of its Mexican properties, a Noranda affiliate may earn a 70% interest by completing a positive feasibility study this year.