Gold miner in the red $37.6m
Northern News Services
Yellowknife (Dec 06/00) - Revenues are up at Miramar Mining, but only amount to half of expenses, according to the company's nine-month financial report.
"During the third quarter we continued to focus on our northern platform," Miramar President and CEO Tony Walsh said.
"Operational improvements continue at our Yellowknife operations and recent resource estimates confirmed our view of the significant potential of the Hope Bay project.
"To support the advance of Hope Bay, we continue to examine alternatives to realise on our investment in Northern Orion," he said.
Miramar holds a 50 per cent stake in the Hope Bay gold property near Bathurst Inlet.
For the three quarters ended Sept. 30, the company which owns and operates the Con and Giant mines in Yellowknife, reports losses deepened to $37.6 million, or 66 cents per share, compared to $14.2 million, or 25 cents per share, for the same nine months in 1999.
Revenues of $37.6 million beat last year's $20.3 million but expenses jumped to $75.7 million from $40.4 million.
Driving costs up was a $31.9-million hit related to subsidiary Northern Orion. Miramar estimates its investment in Northern Orion exceeds expected proceeds from sale of the company by the $31.9 million figure.
Miramar continues to look at disposal of its controlling interest in Northern Orion, a copper exploration company with copper resources in Latin America.
Miramar's consolidated loss from operations, before write-downs and the provision for the potential disposition of its controlling interest in Northern Orion, was $4.4 million or eight cents per share for the nine months of 2000, compared to a loss of $6.2 million or 11 cents per share for the same period in 1999.
The reduction in the loss reflects the operations at the Con mine and the effect of ore contributed by the Giant mine in the period, as well as lower general and administrative costs.
At Sept. 30, 2000, the company had consolidated working capital of $24.9 million (June 30: $26.9 million). Working capital at Sept. 30, 2000 includes the net proceeds from the private placement in September of $3.6 million.
Capital expenditures at Con and Giant will diminish significantly for the balance of the year as a majority of the capital programs for the year were completed in the third quarter.
In the third quarter, Miramar realized an average selling price of $285 US per ounce of gold, which compares favourably to the average spot price of $277 US for the quarter.
Miramar expects 2000 gold production from its Yellowknife operations to be about 120,000 ounces. For the nine months to Sept. 30, Yellowknife operations have produced 86,206 ounces at an average cash cost of $270 US per ounce. Cash costs are forecast to be about $265 US.