NEWS ROUNDUP (March 23, 1992)

Kennecott plans new smelter, refinery

Kennecott, a unit of Britain’s Rio Tinto Zinc, is planning to spend US$880 million to build a new smelter and expand the refinery near its Bingham Canyon copper-gold-silver mine in Salt Lake City, Utah.

Kennecott says the project is necessary because the installation of a $219-million fourth mill line, started in January, will increase concentrate production at Bingham Canyon by 25% to one million tonnes annually. As a result, Kennecott will be faced with higher smelting costs with approximately 50% of copper concentrate production needing to be treated elsewhere.

Having examined various options, Kennecott has decided that a new smelter, capable of treating all concentrates produced at the mine, and an expanded refinery is the most cost-efficient solution.

Scheduled for completion in 1995, the new plant will use flash smelting as a first stage followed by flash converting technology developed by Kennecott in co-operation with Finland’s Outokumpo Oy.

Kennecott says it has already spent more than US$625 million on modernization and expansion at Bingham Canyon.

Campbell reports record gold output

Record gold production was reported by Campbell Resources (TSE) for 1991. The Toronto-based producer turned out 87,500 oz. gold and 1.5 million lb. copper at its Joe Mann mine operation southwest of Chibougamau, Que. last year. In 1990, the company reported output of 72,700 oz. gold and 1.9 million lb. copper in 1990.

Average cash operating costs at Joe Mann in 1991 declined to US$257 per oz. gold produced from US$290 in the previous year.

Campbell reports net income of $3.3 million for 1991 compared to a loss of $27 million for 1990.

Claude suspends dividends

Claude Resources (TSE) says cash flow problems stemming from production delays at its Seabee gold mine in Saskatchewan is forcing it to suspend dividend payments on its 7.5% convertible redeemable first preferred shares. Payment of dividends was scheduled to be made March 31. But prudent management dictates that these problems be overcome before payments can be resumed, the company said.

Financial constraints also forced the Saskatchewan company to suspend the Dec. 31 dividend payments on the preferred shares.

The Seabee mine produced 9,674 oz. gold from 26,000 tons of ore, with an average grade of 0.41 oz. during the first two months of 1992. While operating at 93.5% of capacity, the mill achieved recoveries of 94.4%, the company said.