Printer Friendly


 VANCOUVER, British Columbia, Aug. 30 /PRNewswire/ -- Robert G. Hunter, chairman of El Condor Resources Ltd. advises that, with the recent completion by Kilborn Engineering Pacific Ltd. of a detailed Prefeasibility Engineering Study of the Kemess South Project and the advanced status of government mine development certification, Company management will commence introduction of the Project to senior mining groups with respect to its 60 percent and operator interest in the Kemess South Joint Venture and its 100 percent interest in the Kemess North properties. The Company's goal is to have a senior mining group bring the Project to production.
 Engineering work completed by Kilborn and associated consultants has proven that the Kemess South gold-copper deposit is an attractive long life, low cost, co-product mine. Its unique position as a co-product mine makes it suitable for development by a wide spectrum of senior producers. Upon commercial production, Kemess South will rank among Canada's largest gold producers and at the same time will be one of Canada's largest copper producers.
 Canada's Top 10 Gold Mines Ranked By 1991 Production
 Mine Name Production
 Williams 518,703
 Golden Giant 443,400
 David Bell 283,128
 Campbell 260,521
 x Kemess South 259,000
 Doyon 257,271
 Lupin 216,877
 Bousquet 2 175,844
 Snip 153,402
 Dome 144,526
 Con 123,000
 Source: Northern Miner, July 6, 1992.
 Canada's Top 10 Copper Mines Ranked by 1991 Production
 Mine Name Production
 (Million Lbs.)
 Highland Valley 378
 Kidd Creek 256
 Inco 243
 Island Copper 141
 Falconbridge 75
 Ansil 71
 x Kemess South 65
 Gibraltar 63
 Gaspe Copper 55
 Flin Flon 44
 Selbaie 38
 Source: Canadian Mining Journal, April, 1993.
 x Shows Kemess South Deposit's ranking for average annual
 production for first 6 years of 15 year mine life.
 Forecasts are that by the year 2000, due to the depletion of their reserves, only three of British Columbia's major open pit mines will remain in production. Already, in the past two years; four major open pit mines (Afton, Brenda, Equity and Bell) have ceased operations. This situation coupled with the worldwide demand for new metal production makes the need for Kemess South production exceptionally high. Fortunately, the Kemess South deposit is among the highest grade (value per ton basis) open pit mines ever discovered in British Columbia (second only to the much smaller Afton Mine) and it should be the first of a new generation of open pit mines for the Province.

Principal Open Pit Mines in British Columbia(a) Reserves at Start-up
 Deposit Reserve Grade Contained Metal
 Name Status Million Cu Mo Au Billion Million Million
 tons pct pct oz/ lbs.Cu lbs.Mo oz.Au
 Afton Closed 35 1.03 - 0.017 0.7 - 0.6
 Bell Closed 128 0.48 - 0.010 1.2 - 1.3
 BethlehemClosed 556 0.42 0.016 - 4.7 178 -
 Brenda Closed 175 0.18 0.049 - 0.6 172 -
 B.C. MolyClosed 116 - 0.120 - - 278 -
 Mountain Closed 157 0.57 - 0.005 1.8 - 0.8
 Endako 256 - 0.081 - - 414 -
 GibralterReduced 360 0.37 0.008 - 2.7 58 -
 Granisle Closed 94 0.43 - 0.004 0.8 - 0.3
 Highmont Closed 149 0.28 0.031 - 0.8 92 -
 Island Depleting280 0.52 0.017 0.006 2.9 95 1.7
 Lormex Depleting526 0.41 0.015 - 4.3 158 -
 Similco Reduced 60 0.43 - 0.005 0.5 - 0.3
 Valley 872 0.48 0.007 - 8.4 122 -
 MEDIAN 165 0.42 0.012 0.000 1.2 92 0.0
 Kemess South Project Reserves -- August 1993
 (Mineable)Ready 220 0.22 - 0.018 1.0 - 4.0
 (a) Modified and updated after Sinclair, A.J.; Carter, N.C. and Dawson K.M.: A Preliminary Analysis of Gold and Silver Grades of Porphyry-Type Deposits in Western Canada; Precious metals in the Northern Cordillera; The Association of Exploration Geochemists, 1982.
 During the initial six yers of Kemess South operation, gold production will average 259,000 ounces per year at a cost, on a pro-rata basis, of US $181 ounce. On a normal cost basis, where production costs are attributed to gold and revenues from copper are credited against the overall cost of production, gold production costs drop to an average US $65/ounce. A direct comparison of Kemess South costs can be made with leading North American gold producers.
 Estimated Gold Production Cost Schedule
 Mine/Producer Est. 1993 Cash Cost Au $US/oz.
 Hemlo 139
 American Barrick 161
 Newmont Gold1 177
 Lac Minerals 194
 Placer Dome 196
 Pegasus 213
 Battle Mountain 216
 Homestake 236
 Echo Bay 247
 Amax Gold 309
 Kemess South (Average Years 1-6)
 - Pro-rata Cost US $181/oz Au
 - Normal Cost US $65/oz Au
 Kemess South, in addition to ranking among the lowest cost gold producers, will also be a low cost copper producer. For the initial six years of mining, cash cost per pound of copper has been projected at $US54cents/lb., on a pro-rata basis, which ranks Kemess South in the lowest quartile of world copper producers. Examination of North and South American copper producers highlights the low cost postion of Kemess South.

Competitive Analysis as a Producer of Copper Concentrates (a)
 Ranking Mine Cash Cost Cu
 1 Escondida (Chile) 44
 2 Chuquicamata (Chile) 51
 3 La Caridad (Mexico) 51
 5 Bingham Canyon (USA) 57
 6 Cuajone (Peru) 60
 7 Ray (USA) 73
 8 Highland Valley (Canada) 74
 9 Morenci, Bagdad (USA) 76
 10 Pinto Valley, Chino (USA) 77
 11 Gibraltar (Canada) 81
 12 Cananea (Mexico) 99
 13 Similco (Canada) 100
 14 Island Copper (Canada) 101
 (a) Copper production cost values obtained from Commodities Research Unit Limited, and William Hill Consultants Ltd., April 1993.
 By applying the normal costing method, whereby production costs are attributed to copper and revenues from gold and silver are credited against the overall cost of production, the average cost for the initial six years at Kemess South has been calculated at minus 24 cents/lb of copper.
 Copper Production Cost - Normal Costing Method
 Kemess South Avg. Years 1 - 6
 Cost/pound Cu (US$) 1.28
 Gold, Silver credit (US$) less 1.52
 Total Cost Per Pound of Copper (US$) (-0.24)
 Kilborn Engineering has calculated the Net Present Value and Internal Rate of Return of the Kemess South Project at several gold prices on a stand alone, before tax, 100 percent equity financed basis. Economic parameters held constant for the analysis were Copper Price (US $1.00/lb), Capital Cost (CDN $363 million), Working Capital (CDN $11.3 million), and Exchange Rate ($0.77CDN - US). The Net Present Value using a 10 percent discount rate and Internal Rate of Return of the Kemess South Project at different gold prices is:
 Kemess South Project Net Present Value Schedule
 Gold Price NPV at 10 percent IRR
 US$/oz CDN$Million percent
 $450 315 26.5 percent
 $400 225 22.1 percent
 $375 180 19.9 percent
 On a fully diluted basis El Condor Resources Ltd. has 14,403,903 shares outstanding and a working capital position of CDN $3,900,000.
 -0- 8/30/93
 /CONTACT: Robert G. Hunter, Chairman, 604-684-6365/

CO: El Condor Resources Ltd. ST: British Columbia IN: MNG SU:

MF-LM -- LA026 -- 7292 08/30/93 21:27 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Aug 30, 1993

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters