Glamis ready to close U.S. facility,has high hopes for Mexican mine

As Glamis Gold Ltd.

of Reno is expected to report its earnings early this week, the company is in the midst of a major transition.

Its second largest mine is winding up operations, and a Mexican mine that the company expects to be its new showpiece is expected to begin operation in the first quarter of 2005, says Mike Steeves, the company's vice president of investor relations.

Glamis' Rand Mine in California's Kern County is expected to wrap up production late this year.

The mine, operated by Glamis in the century-old mining district since 1986, produced about 25 percent of the 230,065 ounces of gold Glamis sold during 2001.

Looking to replace that production, Glamis last month completed its merger with Francisco Gold Corp.

of Vancouver, British Columbia.

Among the big attractions of Francisco Gold was its El Sauzal project in Mexico.

When the merger plans were announced in March, Glamis President and Chief Executive Officer Kevin McArthur said he expects El Sauzal to produce 170,000 ounces of gold for more than 10 years.

The Mexican mine's projected cash production costs less than $120 an ounce compare with cash costs of $265 an ounce Glamis reported at the Rand Mine last year.

The San Martin Mine operated by Glamis in Honduras is its biggest, producing 114,216 ounces at an average cash cost of $169 last year.

The company's third major property is the Marigold Mine about 30 miles east of Winnemucca.

Glamis owns 66.7 percent Homestake Mining Co.

owns the other third - and the mine produced 56,525 ounces of gold at a cash cost of $179 an ounce last year.

Along with the El Sauzal property, Glamis' deal to acquire Francisco Gold for stock also brought it a prospect in Guatemala that McArthur estimates may have the potential to produce several million ounces of gold.

Glamis plans to spend $3 million drilling test holes at the prospect known as Marlin - during the next year.