TVX Gold Inc. Mineral Hill Mine Placed under Care and Maintenance.
TVX Gold stated that the continued losses and capital expenditures necessary to continue the current operations at Mineral Hill are not justifiable. TVX Mineral Hill will, however, continue the surface drilling program at Crevice Mountain to enable the company to properly assess this resource which may justify mining on this project in the future. For these reasons, the mine, mill and associated facilities are being put on a care and maintenance basis for the time being.
The decision to suspend operations at Mineral Hill will result in a charge to third quarter earnings of TVX Gold Inc. of approximately US$29 million ($0.18 a share), including provision for future site reclamation.
Production at the mine has decreased as a result of mining lower grade ore and an ongoing shortfall in mill feed from the main Mineral Hill mine. As a result, cash operating costs at the mine have risen to US$535 on a year to date basis. Year to date production amounted to approximately 17,200 ounces of gold. Contributing to these problems have been the delays encountered in the Crevice tunnel drive, principally due to unexpected water inflows.
The majority of the current workforce of 138 employees will be laid off. TVX Mineral Hill is working with the employees in respect of the lay off and assisting in outplacement.
CONTACT: TVX Gold Inc.
Ed Baer, 416/366-8160