Dayton to suspend mining and crushing at Andacollo
Dayton Mining Corp DAY
Shares issued 32,848,200 Sep 28 close $0.65
Fri 29 Sept 2000 News Release
Mr. Bill Myckatyn reports
Mining, crushing and stacking operations at Dayton's Andacollo gold mine in
central Chile will be suspended immediately and these parts of the
operation will be put under care and maintenance until further notice. This
action is being taken due to continuing low gold prices and lower than
expected production at Andacollo.
The mining and crushing equipment will be shut down and stored carefully in
order to allow for a rapid restart of operations when economic conditions
improve. Leaching from existing heaps will continue and Dayton expects to
produce approximately 39,000 ounces of gold over the next 15 months,
assuming full operations do not resume in the interim. A total of
approximately 250 employees will be affected by the cessation of mining and
crushing operations.
The conditions necessary for a restart of mining will be a function of how
long the mine is idle as this will impact on the ramp-up time required to
get back to full production. The pits will be left with ore exposed and the
existing leach pad has sufficient room to start stacking material right
away.
Production over the last few months has been considerably under plan. This
has been due to a loss of ore tonnage compared with the reserve model, in
the Churrumata and Natalia pits which has resulted in higher stripping
ratios and an inability to feed the planned tonnage to the crusher. Also,
the leaching rate of material mined from the Natalia pit is significantly
slower than expected from the original test work. An internal liner was
installed to speed up solution flow from this material, but failed to
increase the recovery rate to planned levels. Due to the lower than
expected gold production in the third quarter, looking forward to the rest
of this year and 2001, it was determined that a cessation of mining and
crushing was warranted to preserve the value of the remaining resource.
Bill Myckatyn, president and chief executive officer, said: "It is most
unfortunate that we have had to make this decision, but this is the best
alternative available in the short to medium term. We met with our major
suppliers of goods and services in Chile but were unable to come up with
sufficient cost savings to make enough of a difference. The operating group
at the mine have done an outstanding job on reducing costs, but there is
not much more that can be done. We are mining a low-grade deposit in an
environment of record low gold prices. By stopping mining and crushing now
and conserving our equipment and resources we will be in the best position
to restart operations when economic circumstances improve."
WARNING: The company relies on litigation protection for "forward-looking"
statements. |
