Three new mines Echo Bay more than doubles revenues and net

Three new gold mines in Nevada and higher bullion prices have had a dramatic effect on the bottom line of Echo Bay Mines, one of this continent’s premier gold producers.

Revenues during the second quarter of 1987 totalled $55.8(US) million compared to just $25.1 million a year ago.

Combined with a two-for-one stock split in July, the increase resulted in a 13 cents -per-share profit in the 3-month period, compared to 6 cents in the same year-ago period.

The three new mines — the McCoy, Borealis and Manhattan — added 40,114 oz of the yellow metal to the company’s 123,383-oz total in the quarter. Output from all the company’s other mines is on the increase as well.

Production from the company’s seminal mine — the Lupin, north of Yellowknife — was up 3% and 15% more gold was poured at Round Mountain than in the same period last year.

By late next year the annual rate of gold production from the Round Mountain mine will be 300,000 oz — more than double the present rate. Echo Bay will be putting up $70 million for the expansion.

The mine is 50%-held by Homestake Mining of the U.S.

More gold will likely be coming from another, albeit smaller, mine in Nevada. Called the Illipah mine, it is expected to be in production in the third quarter.

Looking further ahead, Echo Bay could be pouring gold by 1990 from a deposit in Alaska, called the Kensington deposit. The company acquired a 50% interest in the ground last month for $10 million. Coeur d’Alene Mines Corp. of Idaho is the joint-venture partner.

And in the state of Washington, Echo Bay, as operator, can earn up to a 60% interest in the Kettle River property where open pit drill- indicated reserves on two separate properties are estimated at 3.5 million tons grading 0.127 oz gold per ton. Underground reserves are 472,000 tons grading 0.247.

Feasibility studies are under way.

The feasibility of bringing a small mine in Arizona back into production is also under way.