Placer Dome earns $284M in 2004; $11M for Donlin Creek in 2005

Mining giant Placer Dome Inc. announced a 24 percent growth in earnings in 2004 to $284 million, partly due to "a number of tax items resulting in a net tax recovery of $130 million," the company said in a press release in mid-February.

Sales revenue increased 7 percent to $1.89 billion on gold production of 3.65 million ounces and copper production of 413 million pounds. Gold cash and total costs were $240 and $298 per ounce, respectively, while copper cash and total costs were 55 cents and 70 cents per pound, respectively.

Placer Dome's mine operating earnings increased 19 percent to $484 million.

The Vancouver-based company hopes to begin construction of the Donlin Creek hard-rock gold mine in southwest Alaska no later than November 2007. Placer Dome owns 30 percent of the project and is earning an additional 40 percent by funding $32 million of exploration and development, completing a feasibility study, and making a decision to build a mine to produce at least 600,000 ounces of gold per year (on a 100 percent basis).

Assuming a 70 percent ownership, Placer Dome's share of the project's measured and indicated gold mineral resource and inferred gold mineral resource is 7.8 million ounces and 10.0 million ounces, respectively, the company said in the February release.

Based on work in 2004 by Donlin Creek partner NovaGold, which consisted of a preliminary assessment on the viability and economics of the project, Placer Dome said it is committing $11 million to the development of the project in 2005.

"About half of the funds will be used for drilling to reclassify a portion of the inferred gold mineral resource to a measured and indicated gold mineral resource. Work on design concepts, infrastructure planning, power supply and geotechnical requirements are also ongoing. Baseline environmental studies are being completed in order to commence the permitting process later this year," Placer Dome said.

Pre-feasibility study for B.C. Mount Milligan project

In north-central British Columbia, the company said, a pre-feasibility study is expected to commence shortly on the Mount Milligan project, a large gold-copper porphyry deposit containing "estimated measured and indicated mineral resources of 5.6 million ounces of gold and 1.7 billion pounds of copper."

During 2005, the focus of activities at the Mount Milligan project will include additional conventional metallurgical test work and an investigation of new concentrate processing options.

Placer Dome said a decision will be made this year on whether a feasibility study is warranted.