Giant Yellowknife 'doing well' in battle to reduce costs.

• Author: Bickford, Paul
• Position: Giant Yellowknife Mines Ltd. - Gold Mining Report

Giant Yellowknife `doing well' in battle to reduce costs

The resident geologist in Timmins district is predicting about the same level of mining activity this year as in 1989.

However, Lorne Luhta noted the decline in the price of gold is an important negative factor for mines.

"It undoubtedly has an effect on high-cost producers," he said. "Unfortunately, our mines here in Timmins are not as rich as the Hemlo mines, but we've been in the business for a long time."

For example he pointed to Giant Yellowknife Mines Ltd., which is currently up for sale and in a state of uncertainty.

"Giant Yellowknife is a high-cost operation," said Luhta, adding that its position is not that of the low-grade of ore.

GIANT YELLOWKNIFE

"Giant Yellowknife is doing very well in lowering the price per ounce, which is the name of the game," said Frank van de Water, the company's chief financial officer in Toronto.

Van de Water noted that the employment level at the mine has been cut by more than half. At the beginning of 1989 there were almost 900 employees, but now there are about 378.

The mine produces a relatively low grade of ore - .08 underground and .06 in its two pits.

However, van de Water noted, "The grade in the pits is going up."

In 1989 Giant Yellowknife began mining from its new No. 5 pit on Pamour's No. 1 property.

Giant Yellowknife also hopes to reopen a mine soon in the Nighthawk Lake area. Reopening the old workings could mean employment for about 50 miners.

The company is trying to arrange financing for the operation, said van de Water. "I think it is quite close and we hope to be able to start this summer."

PLACER DOME INC.

Placer Dome Inc. owns two mines in the area - Dome Mine and Detour Lake Mine.

Henry Brehaut, senior vice-president of Canadian operations with Placer-Dome, said, before an early-May strike by unionized employees, that Dome Mine was looking to match 1989's production this year.

When interviewed late in May, Brehaut couldn't predict how long the strike would last, or how much production would be affected this year.

Dome, which employs about 750 people, produces .114 ounces of gold per ton.

Noting that the mine has been operating for 80 years, Brehaut said it still has a future. "It has good potential."

As for the Detour Lake Mine, Brehaut expects production similar to last year's.

The mine, which employs about 350 people, has an ore grade of .155 ounces of gold per ton.

"Reserves are close to 10 years there, and there's...