High River cuts costs, boosts production

A $3.7-million charge related to the sale of properties in Nicaragua pushed High River Gold Mines (HRG-T) out of the black and into the red for the quarter ended June 30.

The Toronto-based company reported a net loss of $3.6 million on revenue of $8 million for the latest quarter, compared with a net loss of $1.4 million on $7.6 million a year ago. Without the one-time charge, High River would have posted a modest profit of $70,782.

The New Britannia mine in Manitoba turned out 24,660 oz. in the latest quarter at a cash cost of US$239 per oz. This compares with 24,096 oz. produced a year earlier at a cost of US$276 per oz.

High River holds a 50% interest in the mine, where, in the latest quarter, 185,685 tonnes were mined grading 4.55 grams gold per tonne. The company realized a gold price of US$450 per oz., owing to a hedge program.

High River also holds a 23% interest in the Russian company Buryatzoloto, which reported a profit of US$394,000 for the 6-month period ended June 30 (compared with a loss of US$916,000 a year earlier). The improved performance was attributed to higher gold production, lower production costs and reduced general and administrative costs. Gold production for the first six months totalled 43,502 oz. (up 27% over the 1997 period) at a cash cost of US$225 per oz. (well below US$251 per oz. a year earlier). Gold sales in the second half are expected to total 60,000 oz., while costs are anticipated to be US$10 lower, owing to the carbon-in-pulp plant now being commissioned at the minesite.

In West Africa, High River is awaiting a revised calculation for the Taparko gold project in Burkina Faso. A US$2-million feasibility study is under way and scheduled for completion by year-end. The company holds a 61.5% interest in Taparko, plus a right of first refusal on a 18.5% stake held by a partner.