Glamis looks to double production
The sharp increase in gold production that Glamis Gold projects during 2005 would mark the successful completion of a major transition for the Reno-based company.
As it reported its earnings for the fourth quarter a few days ago, Glamis said it expects that its gold production will rise to about 400,000 ounces during 2005, nearly doubling the 227,000 ounces it sold during 2004.
About 102,000 ounces of last year’s production came from a Honduran mine called San Martin, but that aging mine is moving into lower-grade ore bodies where recovery costs are higher.
Glamis projects that production at San Martin this year will decline to about 85,000 ounces.
But the new El Sauzal Mine in Mexico, which began operation only in October, is expected to more than make up the slack.
Glamis says that mine will produce about 170,000 ounces of gold this year.
Another boost will come from the company’s Marlin project in Guatemala, which Glamis executives say is running ahead of schedule and is expected to begin production in the fourth quarter.
That project has drawn protests from residents of nearby communities, and mining watchdog groups have pressured the International Finance Corp.
of the World Bank to suspend the processing of a $45 million loan to Glamis for the project.
In a statement that accompanies its earnings report, Glamis executives said the Marlin project continues to be supported by federal officials in Guatemala and said the company is working with government agencies and other groups to resolve the issues.
A third leg of this year’s increased production will come from the Marigold Mine 35 miles southeast of Winnemucca.
Glamis owns two-thirds of that mine Barrick Gold Corp.
owns the other third and Glamis estimates that its two-thirds share of production this year will total 135,000 ounces compared with 94,209 ounces in 2004.
The company reported earnings of $20.9 for 2004 compared with $18.2 million in 2003.
For the fourth quarter, earnings totaled $6.1 million compared with $8.6 million in the same period a year earlier.
Glamis plans to spend $15 million on exploration this year compared with $10.8 million in 2004.
Bryan Wachter of the Retail Association of Nevada said his organization is “very concerned about disruptions to the supply chain.”