Brigus Gold Corp. (NYSE MKT: BRD; TSX: BRD)(“Brigus” or the “Company”) provides a corporate update for the third quarter of 2012.
Brigus Gold has revised and optimized production and development priorities at the Black Fox Mine. Gold production continues to increase, but the Company is making adjustments to mining and development plans in order to develop new ore zones which will enable growth and higher production levels for the long term. Brigus is currently in the process of allocating more resources and work crews for the development of a large ore block on the western side of the underground mine. This ore zone extends deeper and is larger than indicated by historical drilling and therefore requires more resources in the short term to meet current development schedules. While development of this zone is progressing, mining in other areas will be marginally reduced. Production will commence on schedule during quarter four, as previously reported. To compensate for reduced tonnage from underground in the short term, the Company is processing lower grade stockpiled material from the open pit. Grades from the underground continue to meet expectations.
As a result of revisions to the Company’s work plan, gold production in quarter three will be incrementally higher than quarter two but will be less than previous estimates. Cash flows and operating profitability will increase in quarter three and cash costs per ounce will continue to trend lower.
The ore zone under development on the western side of the orebody has an average grade of approximately 6.0 grams per tonne. To properly develop the long-hole stope it is important to begin mining from the bottom of the zone to prevent a significant quantity of ounces from being sterilized. While the development of the long-hole stope is very positive for the future of the Black Fox Mine, there is a modest impact on gold production in the short term. Brigus made the decision to allocate more time and resources to develop this ore zone in order to maintain its production timelines for quarter four as planned. The long-hole mining method will result in lower costs and higher ore recovery rates than traditional cut and fill mining methods. It is expected to provide 400 to 500 high-grade tonnes per day for at least 18 months once it is fully operational.