Gold Mine To Operate Again
A Whitehorse Star Archive story originally published January 15, 1998
BYG Natural Resources Inc. is back on solid footing. Its Mount Nansen, Yukon gold mine will be fully operational during the first week of February, says the company's president.
Graham Dickson said this morning that BYG now has its water treatment problem under control. The mine, he said, will begin discharging from its tailings pond next week. There are plans to restart the milling operation in the first week of February.
The $2 million in arrears the company owes to suppliers of goods and services will be paid up by the middle of March, he vowed.
"Things are good, you know," Dickson said in an interview from the minesite, 60 kilometres east of Carmacks. "We just have to get going again and show everybody we can make those gold bars. We made 157 last year."
With an expected reduction in staff from what was close to 100 employees to an estimated 64 when the mill is fully operational, it can produce gold at $150 US an ounce, he said.
With what he called low production costs, Dickson dismissed current gold prices as a fatal circumstance.
Mount Nansen was forced to halt production in November when its tailings pond filled sooner than expected. The company was unable to lower the pond because the quality of treated water did not meet discharge standards. It therefore it had to stop using water in its mill.
As a result, BYG laid off 60-plus employees, and has spent the last month and a half beefing up its treatment system with 30-plus staff on-site.
Dickson said results from two reputable laboratories in Edmonton both show the company now meets discharge standards.
Of the 10 fish used in the three separate toxicity tests, seven survived, he said. (Federal standards for this particular test require survival of 50 per cent, or five of the 10 fish.)
David Sherstone, the Yukon's regional manager for water resources, said this morning his branch has been notified by the company of the test results. The company can discharge, but federal officials will be doing their own sampling to verify BYG's results, he said.
Through the shutdown, the company has cut its senior executive staff in half, and reduced middle management. It will give 20 or so mill employees permanent layoff notices, Dickson said.
As part of streamlining, he added, BYG offices were closed in Whitehorse, Vancouver and Orangeville, Ont. The company's operation is now managed from Mount Nansen.
"It is a lot more efficient," said Dickson. "I think everybody was a little shocked when it first happened, but my feeling is everybody understands why it was done, and everybody is happy with it."
Ketza Construction, the mining contractor, was back mining the Brown-McDade open pit last week, with its nine or 10 employees.
The company estimates nine months of ore reserves in the Brown-McDade, and an additional two years in the nearby Flex deposit that's currently under exploration to pinpoint paydirt. There are several other nearby deposits the company has identified for future exploration.
BYG stock nosedived this week from a high of 30 cents to 24 cents by Wednesday. It was up a penny this morning, to 25 cents. Its high over the last 52 weeks was $1.22, and its low was 21 cents.
Dickson said the drop earlier this week was due to a sell-off in Quebec.
He's not sure what prompted the sell, but the stockholder must have lost faith, because there's no uncertainty with the operation, Dickson said.
"We needed to do a bit of financing to see us through this shutdown," he said. "We raised $1 million, and that will see us through until we get up and running, until we start producing gold again."
Other than the outstanding accounts payable, Dickson noted, the company is relatively debt-free.
"We are in a reasonably strong position."
He said a number of suppliers owed money have been patient, and they can expect to get more BYG business. |
