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Homestake chases gold glory

THE Homestake Mining Company has a mission to position itself as a major gold producer, and has staked its future squarely on the precious metal, especially in Kalgoorlie where it has expanded operations at the Superpit.

“We continue to believe in gold as a long-term store of value,” Homestake chairman and CEO Jack Thompson said.

Last year the international gold-mining company – which has operations and exploration projects in the US, Australia, Canada and South America – produced a record of 2.4 million ounces.

This was Homestake’s attributable gold and equivalent production, which includes silver. The cash cost was US$192 per equivalent ounce, the lowest achieved in over twenty years.

Mr Thompson said, based on Home-stake’s 124 year history in the industry, periods of low gold prices could only be viewed as short-term fluctuations.

“Our strategy is to use periods of downturn as opportunities to make the company stronger and more competitive for the future,” Mr Thompson said.

“Over the last ten years Homestake has acquired and internally generated a strong complement of low-cost mines which produce 17 million gold equivalent ounces,” he said.

“At the same time, it has increased its reserves by about 7 million equivalent ounces and reduced average costs by US$72 per ounce.”

Even in today’s low price environment, Homestake’s assets generate US$100 million in cash flow annually.

The company is the second-largest producer of gold in Australia. Its operation interests include the 50 per cent-owned KCGM Superpit and Mt Charlotte mines in the WA Goldfields. Other locally owned mines include Plutonic, Darlot and Lawlers.

Last year, three Yilgarn mines carried out significant production developments, which included the southern decline at Darlot and an underground and lateral development at Plutonic and Lawlers.

Exploration at Lawlers, which included a deep exploratory borehole drilled to a depth of 781 metres, has doubled the extent of potential ore grade mineralisation at depth.

In the second half of last year, Homestake and its joint venture partner, Normandy Mining Limited, converted its Kalgoorlie large scale open pit operation from contract to owner miner.

This year the Kalgoorlie operation will undergo another major transition to expand its flotation unit to accommodate addition ore from the Superpit.

This will replace decreased amounts of feed from Mt Charlotte which is scheduled to cease operations this year.

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