MINNG NEWS: A shut and open case for gold mine

Gary Park

Mining News Calgary correspondent

Spurred on by robust prices, Kinross Gold has decided to squeeze the remaining value out of the Lupin gold mine in the Nunavut Territory, just seven months after suddenly closing the facility.

The mine, just east of the Northwest Territories border, will restart on March 1 and is expected to yield another 140,000 ounces over the next two years.

The company will then “call it a day,” said Gord McCreary, vice president for corporate affairs with Kinross.

Reopening the mine will need 150 workers, about half the payroll when Lupin was closed in mid-August and the price of gold was US$40 an ounce less than it is today.

With about 300 employees, Kinross estimated its operating costs of US$410 an ounce were uneconomical. By reducing staff and supply requirements, the company said its break-even price is now US$315 an ounce.

Toronto-based Kinross acquired Lupin a year ago when it merged with Echo Bay Mines and TVX Gold to move into seventh spot among the world’s gold producers, with a goal this year of mining about 1.75 million ounces.

Lupin opened in 1982 and was instrumental in opening an ice road that now serves a number of mining projects in Canada’s North, notably the Northwest Territories’ two diamond mines, Ekati and Diavik.

But its performance has declined over the years to 6.5 grams of golf per ton of ore, compared to 10 grams in its early years.