Red Lake merger to boost production to one million ounces.

Production at the Red Lake Mine is expected to bump up to one million ounces in 2007-2008 as new mine manager Dan Gagnon merges the Placer Dome and Goldcorp deposits into one.

"This should have happened 15 years ago," says Gagnon, winner of the Prospectors and Developers Association of Canada's (PDAC) Developer of the Year award for 2002.

Goldcorp is making plans to integrate the newly acquired Campbell gold mine with the Red Lake property by sinking a third shaft to connect the two at the 34-36 level. As of the beginning of June, progress has been steady as Cementation Canada Inc. sank the shaft 291 metres, bringing the depth to 1,709 m. Work is expected to be complete by the third quarter of this year.

The new shaft will increase hoisting capacity, cut down on underground travel time and provide significant cost sayings.

"We expect to bring up a lot more rock more efficiently," he says.

Both mines will be treated as separate entities for the remainder of this year.

The deposit, which has produced gold for the two mining houses, has up to eight years of life expectancy. However, other targets could be identified as the company invests $28 million in an exploration program for 2006. Diamond drilling is still occurring on the property.

The new management team and selected employees are expected to reach a gold production of 800,000 oz. this year

The Campbell Mine-Red Lake workforce has been reduced by 60 positions as the company aimed to reduce duplication.

The 2006 first-quarter report stated the Red Lake Mine produced 121,300 oz. of gold compared with 198,500 oz. a year earlier. The difference is due to lower gold grades than before, Gagnon says.

The average mill feed grade at Red Lake alone was 59 grams per tonne thus far, compared to 104 grams in the first quarter of 2005. Lower grades combined with a higher Canadian dollar contributed to higher production costs.

Previously, the company adopted a policy of holding back some ore reserves from sale (approximately one-third of mine production), however the practice was discontinued last year and the gold on hand was sold during the second quarter of 2005.

Gagnon says there are numerous opportunities for new deposits in the Red Lake region.

Prior to his appointment at Red Lake, Gagnon managed the Porcupine and Musselwhite joint ventures. He has held the chief geologist position with three mines.

Campbell Mine is just one of the mines that have been acquired by new owner Barrick Gold. Other assets include the Porcupine and Musselwhite joint ventures in Ontario, half the interest in La Coipa gold and silver mines in Chile, plus a 40 per cent interest in Pueblo Viejo project in the Dominican Republic.

www.barrick.com

By KELLY LOUISEIZE

Northern Ontario Business