New Island acknowledges disappointing year

ST. JOHN'S - It was a disappointing year for New Island Resources - and it wasn't the shareholders saying so during the company's annual meeting Thursday.

One disappointment has been the Pine Cove gold mine on the Baie Verte Peninsula that produced its first ounce of gold in July.

New Island holds a 70 per cent stake in the mine operated by its Toronto-based partner, Anaconda Mining Inc.

The St. John's-based mineral exploration company said the mine's mill hasn't performed as expected.

"It has been disappointing," said Harold Wareham, president and CEO of New Island Resources.

Record gold prices this year likely haven't helped to diminish that disappointment. Gold surpassed US$1,225 per ounce earlier this month.

In September, Anaconda announced a $2.7-million redevelopment of the Pine Cove mill, which was producing 100 tonnes of ore daily at the time. Included in those upgrades is replacement of the Gekko gravity unit with a more traditional concentrator.

"We understand the work will be finished by June," said Wareham.

He'll get an update next week during scheduled meetings with Anaconda.

In November, New Island reported the Pine Cove mill had experienced operating difficulties because of a "design deficiency." In the meantime, the company said ore would continue to be trucked 50 kilometres down the road to the Nugget Pond mill owned by Rambler Metals and Mining.

New Island also holds a gold exploration property, Glover Island, with partner Crew Gold. Exploration activity has been slow.

The company aims to regain control of that western Newfoundland property and look for another joint-venture partner.

As usual, New Island's annual gathering was a small one with just nine company shareholders in the room.

In all, the company received proxies from shareholders representing 35.7 per cent of the company's 47.2 million outstanding shares.

A majority of those shareholders voted for the company's proposed five-man slate of directors - 13 million in favour, while three million voted against.

Re-elected were board chairman Sam Walters; company president Wareham; and directors Eric Jerrett of Bay Roberts, James O'Reilly of St. Catharines, and Leo Power of St. John's.

The vote was a little closer when it came to approving the stock-option plan for directors, officers and employees of the company.

Of the more than 16.8 million proxies cast, eight million voted in favour of the plan and six million voted against it. Another two million withheld their vote on that issue.

Company auditors, Deloitte and Touche, were also re-appointed for another year.

The Telegram