Hello William;
More news for the continuing saga??
Placer's Las Cristinas restart gets lift from gold prices
Placer Dome Inc PDG
Shares issued 401,026,082 Sep 28 close $23.00
Tue 28 Sept 99 Street Wire
LIMITED RESUMPTION OF LAS CRISTINAS COULD COME BY LATE OCTOBER
by Stockwatch Business Reporter
Gold's spectacular performance on Tuesday, trading as high as $329 intraday
in New York, has boosted plans by Placer Dome to restart construction of
its Cristinas mine in Venezuela. A Placer official, however, cautioned that
while prices are not stable enough to lead to a resumption of full-scale
construction at Las Cristinas, they do not harm chances of creating a
scaled-down operation in the short term.
An announcement on a scaled-back operation might be made as early as the
end of October, he says.
"There are some alternative scenarios being costed out, and really that's
what it comes down to, whether it's feasible, and that takes a bit of
time," spokesman Hugh Leggatt says. Prompted in part by the disappointment
expressed by Caracas to the suspension of construction made on July 15,
Placer and its joint-venture partner CVG soon began to explore scaled-back
mining possibilities.
Placer cited 20-year lows in the price of gold in its decision to suspend
construction in the summer. At that time, gold was trading at $254.70;
Placer calculates its total cost per ounce of gold mined, including capital
costs, at $240 an ounce. Placer is the majority partner in Minca, the
company created to explore and develop Las Cristinas 4 & 6; state-owned
CVG, or Corporacion Venezolana de Guayana, has a 30-per-cent interest in
Minca.
"There have been meetings and there are meetings carrying on, but it's
really up to the engineers to figure out a reliable plan before we get down
to brass tacks," Mr. Leggatt says, declining to outline any of the possible
mining scenarios. "They (CVG and the government) want to do something, and
so do we, and because we're the technical people, we're trying to figure
out ways that we can keep it happening."
At a total construction cost of $575-million (U.S.), the Cristinas mine
will employ hundreds, possibly thousands, of construction workers and
miners in depressed Bolivar state.
Mr. Leggatt says word on a possible restart of construction could come in a
few weeks. "Probably by the time we report our third-quarter results we
might have a comment on that," he says.
The government of reform-minded President Hugo Chavez, which was elected in
December, 1998, on a platform of anticorruption and economic renewal, was
reportedly bitter about Placer's decision to suspend construction. Mr.
Leggatt conceded that any decision to restart would be made not on purely
economics, but as a gesture of good will toward the country, and to Caracas
in particular. "Precisely," he says. "That's why we're remaining engaged"
in coming up with a way to restart the project.
One of the main objectives of the engineering study is to "keep costs
within bounds," he says.
Mr. Chavez has not had a smooth first year in power (he was elected in
December, 1998, but was not sworn in until a few months later). Among other
controversies, Mr. Chavez has ordered rapid and radical judicial reform.
That prompted the resignation last month of Chief Justice Cecilia Gomez.
Earlier, the country was hit by the effects of the Brazilian monetary
crisis of January.
While Placer would rather do business in a more stable country, Mr. Leggatt
says the company still prefers the present regime to that of its
predecessor. "We've said all along it would be nice to work in a country
that really works, that has some certainty and efficiency and
predictability built into it," he says. "And there's a greater chance of
that happening under these reforms than there was under the old regime."
In the long term, Mr. Leggatt says Placer will require stable and sustained
gold prices "substantially above $300" before it will consider a resumption
of full-scale construction.
New Placer president Jay Taylor is familiar with the project, having been
in charge of local operations when the company made its initial discoveries
of what led to an 11.8-million-ounce deposit at Las Cristinas in the early
1990s.
(c) Copyright 1999 Canjex Publishing Ltd. canada-stockwatch.com
With regards,Frank |
