Vueltas del Rio Well off Target

The Vueltas del Rio gold mine in Honduras has no chance of meeting its 56,000oz production target this year, an official at owner Geomaque Explorations (TSE: GEO) of Toronto told BNamericas.com.

The mine started producing on March 9 and has since turned out 10,200oz of gold, reaching commercial production in June.

But the company had to make operational changes during the second quarter, including the addition of a larger agglomerator to increase crusher throughput. While the amount of ore being crushed and stacked doubled as a result, gold production did not increase proportionately.

"By producing too much on a small leach pad, the ore was not getting the primary leach it needs," said Geomaque's exploration VP Phillip Walford. He estimated the mine would produce around 30,000oz of gold this year, but stressed that was not an official forecast.

In order to increase available leach pad area a pad expansion, originally scheduled for 2002, has been accelerated, and is expected to be complete by late October.

The company said as a result of the difficulties at Vueltas del Rio, it has deferred payments to several of its creditors. It has also requested, and received, a deferral of payments totaling US$850,000 which were required to be made into the sinking fund. These payments are scheduled to be made during the remainder of this year, the company reported.

SAN FRANCISCO

Geomaque's San Francisco mine in northern Mexico, which has been in leach-only mode since November last year, produced 5,818oz of gold in 2Q01 compared to 20,826oz in same-period last year. Gold production will continue for approximately 12 more months, the company said.

Geomaque posted a consolidated net loss for the second quarter of US$1.2mn compared with earnings of US$600,000 in 2Q00.

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This company is no longer actively traded on any major stock exchange.