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--100,000-ounce gold deposit targeted

Omai Gold Mines Ltd (OGML) is on stream to commence a feasibility study for an underground operation at its Omai site by the end of the year after an infill drilling programme is completed.

OGML's parent company, Cambior Inc, has reported that the company has sufficiently dewatered the Fennell pit to allow diamond drilling of the depth extension of the Fennell deposit.

A first drill is already in operation and a second one will be added to this program during the current month.

The first phase of this programme will count approximately 8,000 meters of drilling from the bottom of the pit into mineralized area located under the barren dyke with the objective to confirm the presence of economic resources.

The possibility exists that OGML will restart operations in about a year's time as it seeks to capitalize on the current high gold price by exploiting three high grade gold deposits at its Omai site. The deposits are located in the Fennell pit.

OGML had mined up to a certain point in the Fennell pit and did not go further because of a dyke that blocked the path. The three high grade deposits are located just beyond the dyke.

It was concluded at the time that it would have been uneconomical for OGML to venture into mining beyond the dyke because of the low gold price during that period.

However, the price of gold has risen since and has kept climbing, topping the US$700 per ounce mark this week.

The work to get to the deposits would entail pumping out the pit and digging tunnels to get to the spot to conduct drilling.

Preliminary tests show that the quantity will be between 70,000 ounces and 100,000 ounces per year for seven years.

OGML was mining at 1.7 grammes of ore per tonne in comparison to the new deposits assessed to be 4.25 grammes per tonne.

Meanwhile, Cambior has reported that during the first quarter of 2006, Omai Bauxite Mining Inc (OBMI) incurred a net loss of US$1.9 million.

Cambior said the loss is attributable to lower sales volume resulting from OBMI not being able to compete effectively in certain markets due to the impact of the fuel escalation clause on pricing and higher transportation costs out of Guyana , as well as higher unit operating costs from lower production volume and higher fuel charges.

As a result of lower sales, the production rate had to be slowed down in order to minimize inventory build-up.

Staff reductions are being implemented in order to adapt to this new environment. Committed sales for the remainder of the year have partially recovered at 75 per cent of target and efforts are being deployed to reach targeted sales by year-end.

President and Chief Executive Officer, Louis Gignac, was quoted as saying: “We have instituted measures to return this operation to profitability by reducing costs and developing new products.”

Cambior reported first quarter net earnings of US$9.1 million, a US$7.5 million increase over the corresponding period in 2005.

The substantial increase is due to the gain on disposal of non-strategic investments and the appreciation of the gold receivable from the disposal of the Carlota project in December 2005.

Total revenues for this past quarter amounted to US$87.1 million compared to US$90.5 million during the corresponding quarter of 2005.

Cambior said the decrease in revenues is due to the end of production at the Omai mine since the end of September 2005 and to the reduced gold production of the Rosebel mine partially compensated by higher revenues from the Doyon Division and the Sleeping Giant mine and the non-gold operations.

Total gold production amounted to 123,900 ounces.

Cash position increased from US$15.6 million at the end of the previous quarter to US$26.2 million as at March 31, 2006.

Gignac stated: “The continued appreciation in the gold price impacts favourably on our results in spite of the strong Canadian dollar and robust inflation in energy and other supplies. Fortunately, our production plan in 2006 called for increasing gold production during the year and near-term development of the Camp Caiman project will increase our exposure to the gold price starting in 2008.”

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