Output up, costs down at Canada’s top gold mines – Macassa now in

Cumulative gold production from Canada’s 12 largest gold mines jumped almost 8% to 2.7 million oz. in 1990.

Once again, Ontario’s Hemlo area gold mines took the spotlight, churning out over 1.3 million oz. gold at an average cash cost of US$126. After breaking records in 1990, output at Hemlo’s three goliaths — Williams, Golden Giant, and David Bell — is expected to decline gradually from 1991 onward.

Joining the top-12 fold last year was LAC Minerals’ (TSE) Macassa mine near Kirkland Lake, Ont., which poured its 3-millionth oz. in May, 1990. Helped by higher grades, the 58-year-old mine posted a record production of 103,389 oz., a 25% increase over 1989.

Noticeably absent from the list is Placer Dome’s (TSE) Dome mine at Timmins, Ont. Following a 6-month strike, production at the mine fell to less than 80,000 oz. from 144,135 oz. in 1989. Using a “new mining plan,” the company says it expects to boost Dome’s production to 130,000 oz. in 1991.

Unlikely to hold its position as a top performer next year is Newfoundland’s only gold mine, Hope Brook. Plagued by high production costs (US$495 in 1990) and environmental complications, the fate of the 4-year old mine now rests in the hands of its owner, BP Canada (TSE). Currently under suspension while its contaminated holding ponds are retreated, Hope Brook will probably face permanent closure unless gold prices improve substantially.

On a regional basis, Ontario continued as Canada’s most prolific gold miner. In 1990, more than 67% of the country’s top-12 production stemmed from the central province. The Northwest Territories ranked a distant second, providing about 16% of the top-12 output. Quebec produced 355,168 oz. from its two largest gold mines, LAC/Cambior’s (TSE) Doyon, and Agnico-Eagle Mines’ LaRonde.

Almost all of the country’s largest mines managed to cut costs in 1990, resulting in an average cash production cost of US$257 per oz., a 5% drop from 1989. Top marks go to Royal Oak Resources (TSE) for slashing costs at its Yellowknife division by US$70 per oz. to US$368 and Agnico-Eagle, which realized a savings of US$39 per oz. at its LaRonde mine. Higher production was responsible for a US$44 drop in costs to US$260 at LAC’s Macassa.

Bucking the trend was Placer Dome, which saw costs soar at all three of its top Canadian gold mines — Campbell, Detour Lake and Dome — to an average of US$312 from US$271 in 1989. Subsequent staff r eductions at both Detour Lake and Dome are expected to reduce 1991 costs.