RD, As requested (sorry just saw that Robert Dydo posted same NR):
William Resources Inc -
Gold hedges closed; new operating plan
William Resources Inc WIM
Shares issued 13,484,715 1998-10-09 close $0.135
Tuesday Oct 13 1998
Mr. Stan Bharti reports:
The company has recently financially settled (closed) its gold hedges for net proceeds of $7.7-million (U.S.). William was hedged with put options and forward sales for its remaining 1998 and 1999 gold production. The proceeds have been used to improve the company's liquidity position and to reduce bank debt.
At the same time, William has developed new operating plans for its three gold mining operations, Bjorkdal in Sweden, Pahtavaara in Finland, and Jacobina in Brazil. Future gold sales will be at the then spot price of gold.
Bjorkdal Mine (Sweden)
For the past several years, the processing plant at Bjorkdal has been screening off a coarse fraction of the mined ore feed. This screened off material made up about 30 per cent of the 1.8 million tonnes of ore delivered to the plant, but was initially at a low grade. As a result, the ore entering the mill was significantly upgraded by
this screening process. The stockpiled material was set aside for possible treatment at a later date.
Test work completed earlier this year has shown that the grade of screened off material is higher than estimated. This could have been caused by changes in the mineralogical character of the ore which may be occurring with increasing depth in the open pit. Consequently, the operation is no longer gaining a benefit from the screening procedure.
As a result, this has allowed William to make significant revisions in the Bjorkdal mine plan. The mill will now process the stockpiled screened off material for the next few months, followed by elimination of screening in 1999.
The total mining rate of ore and waste will be reduced from 10 to 5 million tonnes per year. Operating costs will be reduced because this new plan requires less equipment and fewer employees.
All exploration outside the mine concession will cease and the Stockholm office will be closed on April 1, 1999.
The company believes that with the above plan the operation is economic at current gold prices. In 1998, the mine is expected to produce 70,000 ounces of gold and is forecast to produce approximately 80,000 ounces in 1999 at a cash operating cost of $206 (U.S.) per ounce and at a total cash cost (including waste stripping, capital, refining, and bank interest) of $283 (U.S.) per ounce.
Jacobina Mine (Brazil)
Performance of Jacobina has been disappointing throughout the year. With new equipment in place, the mine met its tonnage production targets but the grade was lower than expected, resulting in unacceptably high per ounce cash costs.
Difficulties at the mine were further compounded by a breakdown of the main ball mill in September. The ball mill has been repaired and the mine is again fully operational.
Significant employee and cost reductions have been implemented at Jacobina and the mine will be placed on care and maintenance on or before July 1999.
All development and capital have been curtailed and the mine has been placed on a ten month wind down plan, which will be monitored on a monthly basis. The mine will be put on care and maintenance at the end of the ten months. This could happen earlier if operating costs are not in line with the ten month operating plan.
The ten month operating plan is expected to generate positive cash flow from the production of about 50,000 ounces of gold at a cash cost of approximately $265 (U.S.) per ounce.
Pahtavaara Mine (Finland)
Pahtavaara was originally scheduled for temporary closure in June 1998. Additional exploration and the combination of cost reductions and productivity improvements have generated sufficient resources for the mine to continue through to the end of this year. In the first six months of 1998, the mine produced 12,782 ounces at a cash cost of $296 (U.S.). For the remaining six months, the mine is expected to produce over 15,000 ounces at a cash cost of under $200 (U.S.) per ounce.
The exploration potential at Pahtavaara is considered to be exceptional and William believes that there is a good probability that additional resources will be developed, which would allow the mine to continue operating into 1999.
William has engaged the services of a Finnish investment bank, EVLI, to place a private offering of between $3-million (U.S.) and $5-million (U.S.) in Terra Mining Oy, a wholly owned subsidiary of William through which all the assets in Finland are held. The funds would be used for exploration at Pahtavaara, with the expectation of listing Terra Mining Oy on the Finnish Stock Exchange.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com
Comments from the broker types?
Cheers Winzer |
