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Silver Wheaton Corp. Message Board

  • hrj4330 hrj4330 Nov 19, 2005 12:15 PM Flag

    jc---SRR.v OT

    I see your friends out in full force this
    morning!!
    Here's a nice little writeup On San Gold from a local paper.(edited for length)

    The biggest mine to open in Manitoba in 15 years will pour its first gold brick in Bissett next month, making for a golden Christmas in that part of Manitoba.
    San Gold Corp., the Bissett mine's new owner, has already begun paying more than $1 million a month in salaries to 110 new employees. That is sprinkling gold dust across the region that stretches as far as Pine Falls and Lac du Bonnet.
    It's the latest chapter in the boom-and-bust history of mining town Bissett, since gold was discovered in 1911. The San Antonio mine in Bissett opened in the 1930s. The gold mine was most recently run by Harmony Gold of South Africa from 1998 to 2001. Harmony closed the mine when gold prices crashed to $250 US an ounce.
    When gold climbed to $300 an ounce two years ago, Harmony put the mine up for sale. San Gold bought it for $3.5 million in cash, and $4 million in stock.
    Today, that sale price looks more like a heist than a steal -- perhaps the biggest gold robbery since Ken Leishman lifted 12 gold bars worth $4 million from Winnipeg International Airport.
    San Gold's break-even point -- the price of gold needed to cover operating costs -- is just $285 US an ounce, he said.
    The Bissett gold mine and mill has also undergone $120 million in upgrading of equipment and infrastructure since 1996 by previous owners Rea Gold and Harmony.

    There are many reasons why gold has rebounded, but a main reason is the sell-off of gold reserves ran its course, and now central banks in China, Japan and India are buying up gold. At the same time, global gold production has fallen to its lowest level in 75 years.
    The latest Bissett mine opening is far bigger than what Harmony ran, and seems certain to operate much longer. San Gold has already identified enough gold in the ground to keep the Bissett mill running for 13 years, "and we'll definitely find more," said San Gold president Dale Ginn. The company has a second mine in the development stage, and plans to open a third mine by next summer.

    San Gold also pays good wages. Between 75 and 80 employees are drill miners. Drilling rock is hard work, but miners typically make from $70,000 to $90,000 a year, with incentives, Wynn said.

    But perhaps most important is that San Gold is mainly hiring local staff. It implemented a training program for local residents last summer without the benefit of any government funding. Today, 80 out of its 110 employees are local people.

    That's the exact opposite of the hiring practices of previous owner Harmony.

    "The previous company brought in experience workers from all over the continent and most of the salaries went out of the community and province. It's our intention to see that most of the money stays in the community," said Wynn, who has lived in Bissett all his life.

    "It's supplying jobs for just about everyone who's interested in a regular job," said Grapentine.

    Mines minister Jim Rondeau said new mines pay good salaries, and typically open in regions where unemployment is high. "It's a wonderful economic boom for that area," he said.

    Meanwhile, Manitoba is undergoing the biggest mineral exploration program ever, Rondeau said at yesterday's annual Manitoba Mining and Minerals Conference.

    Mining companies will spent $52.7 million searching for minerals in Manitoba this year, almost 50 per cent more than a year ago. In recent years, mining companies have typically spent in the $30-million range annually.
    One of the biggest exploration programs is being conducted by diamond company DeBeers, which has staked 20,000 square kilometres in northeast Manitoba. DeBeers is searching for kimberlite, the host rock for diamonds.

    bill.redekop@freepress.mb.ca

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