Whereas in its 1997 financial statement, the company used a gold price of US$350 per oz. to calculate the carrying values of its assets, Greenstone is using US$300 per oz. for 1998.
Management expects to book writedowns against two high-cost projects: Hemco in Nicaragua and Santa Rosa in Panama. At the Hemco properties, which include the Bonanza mine, the writedown is expected to be about US$40-45 million; at Santa Rosa, US$30-40 million.
As well, Greenstone is recording a US$3-million writedown of the carrying value of its investments.
Greenstone says the writedowns will be of a non-cash nature. They are not expected to result in a breach or default under any of the company’s existing credit or other obligations.
No writedowns are anticipated for the Cerro Mojon mine in Nicaragua or the San Andres project in Honduras. Both projected low operating costs.
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