Company Press Release
Campbell Resources Announces Discovery of Significant New Ore Zone at the Joe Mann Mine
TORONTO--(BUSINESS WIRE)--Feb. 4, 1999--Campbell Resources (TSE:CCH - news; ME:CCH - news; NYSE:CCH - news) Announces Discovery of Significant New Ore Zone at the Joe Mann Mine and Adopts a New Long Term Mine Plan, Average Cash Operating Cost to Fall to US$245 per Ounce, Union Agrees to Contract Extension
Campbell Resources Inc. is pleased to announce the discovery of a significant new ore zone at the Joe Mann Mine in Northwestern Quebec as well as the adoption of a new long term mine plan that will see Joe Mann operations continue beyond 2004.
Exploration Results from the 2500 Level
Early exploration from the 2500 level, initiated in the fall of 1998, has encountered impressive results approximately 1000 feet east of the shaft. A crosscut driven at 1100E to investigate results from three earlier drill holes drilled from the 2350 level has intersected a zone of high-grade mineralization with a true width of 39.0 feet averaging 0.293 oz./ton gold. Historically, typical mine widths at Joe Mann have been approximately 6.0 feet. At the time of the press release, 21 drill holes had been completed to test the 425 foot section of the 2500 level between 975 and 1400 feet east of the shaft. Results from these holes are tabulated below:
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Section Drill Hole Assay Values (x) Width
No. (oz./ton gold) (feet)
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975E 4654 0.270 38.7
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7747 0.147 37.8
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1050E 7748 0.205 15.7
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4812 0.191 34.2
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1100E Drift 0.222 69.0 (x)(x)
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7896 0.104 45.0
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4745 0.300 48.7
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1150E 7852 0.249 17.8
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5149 0.122 91.6
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7898 0.453 69.5
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7853 0.177 28.4
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7910 0.212 25.0 (x)(x)
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1200E 7851 0.177 51.1
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Section Drill Hole No. Assay Values (x) Width
No. (oz./ton gold) (feet)
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1200E 4895 0.118 37.4
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1250E 4933 0.216 10.0
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5079 0.141 109.2
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1300E 5793 0.252 15.0
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5078 0.196 62.2
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1350E 5765 0.387 13.0
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7847 0.492 40.0
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7735 0.681 28.0
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1400E 4910 0.098 17.3
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(x) - Assay values cut to 2.0 oz./ton gold
(x)(x) - Interval is a true width
It is thought the mineralization is associated with a porphyry dyke and occurs between two of the mineralized orebodies at Joe Mann, namely the North Zone and the Main Zone. Mineralization within the newly discovered ore zone is similar to ore found in the Main Zone and contains numerous occurrences of visible gold. Drilling is continuing in order to define the full extent and grade of the mineralization found in the crosscut and preliminary results from drilling on the 2500 level have confirmed the continuity of the ore zone to at least 175 feet below the 2500 level.
At present the new ore zone is not incorporated into the long term mine plan discussed below. When this zone is fully defined, management expects there will be increased production and lowered costs in the first two years of the plan.
Long Term Mine Plan
The newly adopted long term mine plan (the ''plan'') calls for the immediate full development of the six new levels between the 2350 level, which is currently being mined, and the shaft bottom at 3700 feet. Development of these six levels follows the successful completion of the shaft deepening program in July 1998 at a cost of $13.1 million, approximately $1.4 million less than budgeted. The plan is expected to have significant economic benefits for the company including reduced cash operating costs.
The plan envisages mining approximately 1.8 million tons of ore at an average grade of 0.258 oz./ton gold to produce more than 425,000 ounces of gold over the next 6 years. The average cash operating cost is forecast to decrease to US$245 per ounce, compared to a cash operating cost of US$260 as previously projected. The total cash cost, including all development and sustained capital expenditures, will also fall to US$270 per ounce from US$285 per ounce.
In addition to ore from the Main Zone which is situated east of the shaft, the plan also includes initial production from the approximately 110,000 tons from the West Zone between the 1650 and 1825 levels of the mine. Further exploration and development of the West Zone is contemplated initially above the 2350 level and an increase in reserves is expected.
A key component of the plan includes the adoption of a 7 day per week mining schedule as compared to the current 5 day per week schedule and the elimination of the 2 week summer shut down. The net effect will be an increase in the number of days of mining from 237 days per year to 347 days per year. Due to the excess mill capacity, the mill will operate on average 260 days per year.
The union, representing the hourly mine workers, supports the implementation of the new work schedule and management has been successful in arranging a two year extension to the current labour agreement. The extension calls for a general increase of C$0.25 per hour for the mine workers amounting to an annual cost of C$90,000. In addition, a gold price participation formula has also been approved. For a gold price ranging between C$525 and C$625 per ounce, the employees would share an additional C$120,000 for each C$25 multiple in this range.
The Joe Mann Mine is situated in the eastern portion of the Abitibi Greenstone Belt, approximately 350 miles north of Montreal. Mining is predominantly carried out using shrinkage stope mining method and ore is trucked to the Company's mill facilities near Chibougamau, Quebec where it is processed using gravity and cyanidation circuits to produce dore bars and a floatation circuit to produce a gold and copper concentrate. The Mine has been in continuous production for more than 11 years and has produced in excess of 880,000 ounces of gold. While most of the production has come from the Main Zone, mineralization is also found within the North, South and West Zones.
Forward-Looking Statements
Certain information contained in this release contains ''Forward-Looking Statements'' within the meaning of the Private Securities Litigation Reform Act of 1995 and is subject to certain risks and uncertainties, including those ''Risk Factors'' set forth in the Company's current Annual Report on Form 10-K for the year ended December 31, 1997. Such factors include, but are not limited to: differences between estimated and actual ore reserves; changes to exploration, development and mining plans due to prudent reaction of management to ongoing exploration results, engineering and financial concerns; and fluctuations in the gold price which affect the profitability and ore reserves of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof. The Company undertakes no obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect unanticipated events or developments.
Campbell Resources is a growth-oriented gold mining company with operations in Quebec, Canada and Sonora, Mexico, and a development-stage gold project in Panama awaiting higher gold prices in order to continue development. The Company is currently exploring on its mine properties in Quebec and Mexico and is actively seeking additional acquisitions in Latin America.
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Contact:
Campbell Resources Inc.
Steven Dawson, 416/366-5201
416/367-3294 (FAX)
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