Homestake Mining Company Reopens Underground Operations

Strategic Insights -

Homestake Mining Company has announced the gradual reopening of its underground operations at the Homestake mine in Lead, South Dakota, following a major restructuring of underground activities. The new mine plan aims to recover better quality ore through the increased use of mechanized cut-and-fill mining methods, resulting in considerable cost savings and increased gold production. The company expects to invest between $20 and $30 million by the end of 1999 to implement the new operating plan, which is expected to lead to annual gold production of 150,000 to 180,000 ounces.

Key Takeaways:

  • The Homestake mine in Lead, South Dakota, will be reopened with a limited workforce on March 26, 1998, with remaining employees phased in by April 23, 1998.
  • The new mine plan is designed to recover better quality ore through mechanized cut-and-fill mining methods, resulting in cost savings and increased gold production.
  • Once fully implemented, the new plan will generate annual gold production of 150,000 to 180,000 ounces and reduce the total cash cost from underground mining to $280 per ounce.
  • Homestake Mining Company expects to invest between $20 and $30 million in the project by the end of 1999.
  • The company's new operating plan is expected to increase earnings and cash flow from the mine and result in a more efficient and profitable operation.
  • Homestake Mining Company is an international gold mining company with operations in the United States, Canada, Australia, and exploration programs in Latin America and development/evaluation projects in Chile and Bulgaria.

Statistics:

  • 150,000 to 180,000 ounces of annual gold production expected from the new operating plan.
  • Total cash cost from underground mining projected to decline to $280 per ounce, compared to the current cost of $335 per ounce.
  • Indicated investment of $20 to $30 million to implement the new plan by the end of 1999.
  • Expected reduction in costs due to the new operating plan.

Sources:

  • Homestake Mining Company press release, March 24, 1998.