Emperor's new focus

By Sophie Foster Hildebrand

WHEN the gold price

fell below US$3OO/oz, at least 100 mines had to call it a day. Emperor Gold Mine, nes tled in the cup of an old volcano in Tavua, Fiji, went into damage control.

The company, which had promised shareholders a cash surplus of As2o million per annum in better times, now had focus on cost minimisation.

Chief executive Colin Patterson says

exploration stopped, discretionary spending

stopped, and the capital replacement sched ule was cut. But the damage control, he said, only reduced “bleeding”. Instead, “a fundamental change in philosophy” was needed.

The Emperor of today is now looking towards not just surviving, but prospering in a climate of low gold prices.

Patterson says to focus on bonnes and ounces was “not the solution”.

“The profit margin on each ounce had to be the new focus,” he says. As a result of this change in mindset, access and develop ment of higher grades accelerated.

In early April, the company commis sioned its newly deepened Smith Shaft. A $9 million investment project, the Smith Shaft will now allow Emperor access to additional high-grade gold ores - the lowest being at 714 metres below surface.

Emperor chair, Gordon Toll, says “the mining of these ores will not only ensure that we continue to generate a profit, and therefore continue in business while other gold producers are falling by the wayside, but will also allow us to get back on track with plans to greatly increase the level of gold production at Vatukoula”.

Toll says that the drive to survive brought pain. “We had to make a difficult

decision in November 1997 after the gold price fell. Either we ceased operations until gold returned to the heyday levels of US$4OO an ounce, or we reviewed our oper ating efficiencies, restructured the organisa tion and continued profitably producing gold”. Emperor chose the latter option which meant the loss of some jobs.

Patterson says that over the last 18 months the company successfully re-organised to counter the effects of a severe drop in the world gold price.

“Our cash flow is now positive and Emperor is moving forward with ambitious plans for the future of the Vatukoula mine”.

Toll says the company is poised to expand gold production quite significantly

and already over 30 per cent of the 476 employees who took voluntary redundan cies in 1997 have

been re-employed.

In 1991/92, gold production at the mine stood at less than 100,000 ounces.

The projected pro duction for 1998/99 is 120,000 ounces at a cash cost below US$2BO per ounce.

The company’s tar get for 1998/99-2000 is to increase group production from Fiji operations to 200,000 ounces and to reduce production costs to below US$25O per ounce.

Over the past 12 months. Emperor’s exploration pro

gramme has focused on its prospects in Tuvatu, its newest acquisition.

The Tuvatu deposit is located 50 kilo metres south of the company’s gold mine in Vatukoula and 20 kilometres from Fiji’s international airport and supporting infra structure.

“Tuvatu,” says Toll, “has all the poten tial and promise to be the next Vatukoula for Emperor and Fiji”.

"The Emperor Gold Mine at Vatukoula is nestled nestled in the Tavua valley

Emperor says the style of deposit at Tuvatu is similar to the Emperor gold mine, with numerous flat lying to vertical and sub-vertical orebodies cutting across each other.

Emperor still does not know the full value of the deposit at Tuvatu because drilling was confined to a small area. Emperor is hoping to have a better idea of the full potential of Tuvatu by the end of the year.

Emperor, -Toll says, is aggressively pursuing a strate gic approach which states that every ounce of gold mined is profitable.

“This strategic approach leaves us with large areas of

lower grade resource that can be mined later without further development costs when gold prices improve,” he says. “In short, we are maximising the opportunity to earn a profit by mining the right gold, in the right location, in the right way, at the right time. And we are now poised to do so in increasingly significant quantities”.

Fiji’s prime minister, Sitiveni Rabuka, who launched the completed deepening project, says the mine never ceases to sur prise, with discoveries of significant new orebodies or extension to existing ones.

“At an age when most mines are in their final days, the rejuvenated Vatukoula is looking forward to at least 20 more years of

life,” he says. According to the Emperor Mine general manager Martin Jacobsen, gold was discovered at Vatukoula in the early 19305. During the next 20 years, three companies dominated gold production in the Vatukoula region but Emperor eventu ally secured ownership of the whole field in the 19505. ■

F[?]me minister Sitiveni Rabuka cuts the ribbon to open the newly de[?]