Message 19451349
biz.yahoo.com
UPDATE - Placer in talks on restarting Chile gold project
Thursday October 30, 11:51 am ET
By Nicole Mordant
(Adds details, background, share price. In U.S. dollars unless noted)
VANCOUVER, British Columbia , Oct 30 (Reuters) - Placer Dome Inc. (Toronto:PDG.TO - News) gave its strongest signal yet on Thursday that it would kick-start a large, stalled gold-mine development in Chile, saying higher gold and copper prices make it far more attractive.
Bill Hayes, vice-president for Placer's U.S. and Latin American operations, said the gold major had reopened talks with its joint-venture partners and financial institutions on restarting development of Cerro Casale.
The project, also known as the Aldeberan deposit, contains an estimated 23 million ounces of proven and probable gold reserves, making it one of the biggest undeveloped gold deposits in the world.
A feasibility study done in 2000 concluded that a gold price of $350 an ounce and a copper price of 95 cents was needed to make the hefty capital cost, estimated at over $1 billion, worthwhile. But metals prices, especially copper, have wallowed well below these levels. At least, until recently.
"Certainly our interest is heightened. I like this deposit and I like where it is," Jay Taylor, Placer's chief executive, said on a conference call to discuss the Vancouver-based firm's third-quarter results.
CERRO CASALE LEADS PROJECTS
Gold traded at around $388 an ounce on Thursday morning while copper changed hands at a new three-year high of 92 cents.
Placer owns 51 percent of the project and is partnered by juniors Bema Gold Corp. (Toronto:BGO.TO - News), with a 24 percent stake, and Arizona Star Resource Corp. (Vancouver:AZS.V - News), which holds the rest.
Last quarter, Placer said it was looking hard at ways to reduce the capital cost of Cerro Casale but that it was uncertain if the project could be brought forward.
Hayes said Cerro Casale was at the front of Placer's suite of development projects as its environmental impact study had already been approved and water rights secured. Ways to cut the capital investment -- Placer needs to foot up to $1.3 billion -- are still being investigated.
According to the feasibility study, a mine would produce nearly one million ounces of gold a year for 18 years.
Placer's stock rose along with the gold price on Thursday morning, gaining 27 Canadian cents to C$20.27 in Toronto.
The market shrugged off news accompanying the company's results late on Wednesday of a delay in completing the sinking of a shaft at its South Deep mine in South Africa. The commissioning of the shaft, which was due in the fourth quarter of 2003, is delayed until next year.
Placer upped its forecast for full year output to 3.7 million ounces from 3.5 million, helped by recent mine buys and an improvement at its Canadian mines -- a turnaround one analyst said meant the northern operations could no longer be described as the "skunk at the party". |
