River runs red in quarter

Higher production costs left River Gold Mines (RIV-T) with a loss of $1.6 million (or 5 per share) in the three months ended June 30.

River, which took in revenue of $8 million during the quarter, lost $770,000 on revenue of $7.7 million in the second quarter of 1999. For the six months ended June 30, the company lost $2.1 million (7 per share) on revenue of $17 million, compared with a loss of $484,000 on revenue of $16.8 million in the first half of 1999.

At the Eagle River and Edwards mines in north-central Ontario, unit production costs have increased as a result of higher fuel prices and a mining plan that, in recent months, has been exploiting lower-grade stopes.

Production of 19,200 oz. in the quarter was down slightly from the 21,200 oz. poured in the first quarter, but it was identical to first-quarter production in 1999. Average recovered grades were 7.4 grams per tonne in the second quarter and 8.4 grams in the first quarter. They were substantially lower than the average of 10.9 grams in the first half of 1999 but were offset by higher tonnages put through the mill.

River is currently developing the No. 6 ore zone at Eagle River. The company is sinking a 550-metre production shaft for better access to the new ore.

Proven and probable reserves down to a vertical depth of 500 metres and inside a 250-metre radius around the new shaft are estimated at 693,000 tonnes with an average grade of 13.5 grams gold per tonne. Other mineralization is known to exist in the immediate area, and River hopes to increase the reserve figure with additional drilling and drifting.