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Low gold prices bring down Mesquite Mine, for now

May 25, 2001|By RUDY YNIGUEZ, Staff Writer

After 20 years in operation, the Mesquite Gold Mine is all but closing its doors today because of the low price of gold.

With it comes the layoff of almost 120 workers.

"We mined it to final design," said Robert Harris, Newmont Mining Corp. general manager at Mesquite, adding that expansion plans awaiting permits are predicated on a higher price for gold.

Harris said 16 employees will remain on-site to run heap leach pads to produce gold and that a few workers are being offered employment at a Newmont mine in Nevada.

"They'll continue to get paid for 60 days in lieu of notice," Harris said.

The company is offering out-placement services and will sponsor a job fair in Holtville on June 4.

Harris said the price of gold — trading for about $266 to $279 an ounce — is driven by supply and demand and the strength of the U.S. dollar.


"It's also driven by people's perception of what they think it's worth," he said, adding the perception is based on the potential supply of gold.

He said selling of gold by central banks has resulted in a lower price and for Denver-based Newmont to pursue its mining activities again, the price would have to be in the $400 an ounce range.

Harris said there are about 1 million ounces recoverable in the area slated for expansion.

Meanwhile, county Supervisor Wally Leimgruber said Newmont was a good steward and the source of good jobs.

"The mine has been very good to Imperial County," Leimgruber said.

Harris praised the local workforce.

"We really appreciate the quality of the people who have worked at Mesquite Mine and their contribution to the company," he said. "We appreciate very much what they've done for us."

Across town, Daniel Purvance, geology and environmental coordinator for another gold-mining company, Glamis Imperial Corp., lamented the mine's closure.

"It's a sad day for Imperial County, which is going to lose 125 good-paying jobs," he said.

Exploration drilling for Mesquite began in 1981 by Gold Fields Mining Corp. and mining commenced in early 1985. The mine was acquired by Santa Fe Pacific Gold Corp. in 1993, and acquired by Newmont Mining Corp. following a merger with Santa Fe in May 1997. The mine consisted of two open-pit mines 35 miles east of Brawley.

In 2000, Mesquite produced 130,000 ounces of gold at a total cash cost of $221 per ounce and about 3 million ounces overall. Reserves at the mine as of Dec. 31 were 263,000 ounces.


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Staff Writer Rudy Yniguez can be reached at 337-3440.

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