U.S. REPORT Ridgeway produces 30% less

Gold production at the Ridgeway open pit mine in South Carolina fell by about 30% to 30,843 oz. during the 1991 first quarter from production levels a year earlier.

Galactic Resources (TSE), which holds a 48% interest in the mine operated by partner RTZ Corp., said its share of production for the quarter was 14,804 oz., compared with 21,023 oz. a year earlier. The cash cost of gold produced during 1991 was US$241 per oz., and sales of gold were at an average price of US$393 per oz.

Galactic said the production decline at Ridgeway was primarily due to the increasing hardness of ore being processed, and decreases in average grades and recoveries of contained gold.

But the company expects that additional throughput capacity resulting from a new ball mill installed in the 1991 second quarter will more than offset the reduced production experienced during the first quarter.

Production at Galactic’s 50% owned Ivanhoe gold mine in Nevada was also below budget, although within management’s current expectations. The recently opened (1990) open pit mine produced 12,751 oz. during the 1991 first quarter (Galactic’s share being 6,376 oz.), but generated a loss of US$408,000 to Galactic’s financial results for the period.

In contrast, Ridgeway provided income of US$1.06 million in the first three months of this year, compared with US$3.4 million in the 1990 first quarter. Galactic reported a loss of US$796,000 from all its combined operations during this period, compared to earnings of US$978,000 in the 1990 first quarter.

The company intends to continue mining and leaching operations at its wholly owned Summitville mine in Colorado this year. It was expected that mining operations would be suspended. However, the company said a review showed economic advantage to mining and placing ore on the leach pad this year. Mining operations are expected to begin soon.

Production at Summitville during the 1991 first quarter (from leaching ore mined in previous years) amounted to 5,423 oz., compared with 3,642 oz. during the same 1990 period.

At the same time, production at the phase-one mine at Ivanhoe will continue for the remainder of this year. Galactic also expects to plan for the start of production at the proposed second phase of the Ivanhoe operation.

The Vancouver-based company’s first-quarter results include a gain of about US$2.5 million, after tax, from the sale of 25% of the company’s Far South East project in the Philippines. The other 75% of this interest was sold during the first quarter of 1990 and resulted in an after-tax gain of US$7.4 million.