Equity Silver anticipates continuing profits in 1988

A buoyant precious metal market will keep profits high in 1988, Equity Silver President A. Petrina tells shareholders in the annual report.

British Columbia’s largest silver producing mine located near Houston produced 46,600 tons of concentrate in 1987 containing 5,128,000 oz silver, 32,600 oz gold and 13,683,000 lb copper.

Silver production will likely remain the same in 1988, Petrina says. “Provided silver prices remain at the 1987 average level, the company should make a profit.” Equity Silver paid dividends to shareholders for the first time this year and Petrina expects sufficient cash will be generated in 1988 to continue this.

Earnings in 1987 were $3.6 million, before an extraordinary writedown of $18.6 million. This writeoff produced a net loss of $14.9 million for the year (N.M., Feb 15/88).

A total of 16.5 million tons of ore and waste was mined in 1987, all coming from the Main zone pit at a strip ratio of 3.5 tons of low grade and waste to one ton of ore. In addition, 733,000 tons of ore was reclaimed from stockpiles.

Mineable reserves at year-end were 16.2 million tons averaging 2.52 oz silver, 0.032 oz gold, 0.25% copper.

The concentrator processed 3,979,000 tons of ore at a daily rate of 10,900 tons. Average mill head grade was 2.3 oz silver, 0.024 oz gold and 0.26% copper. Over-all silver and gold recoveries, including dore production from the scavenger circuit which treats the mill tailings, were 56.3% and 42.1% respectively.

Based on current outlook for metal prices, Petrina anticipates no trouble in marketing the company’s 1988 and 1989 production of concentrate. “Agreement was reached with the company’s traditional customer in Japan for the majority of 1988 concentrate and little difficulty is anticipated in placing the remaining production at favorable terms,” he says.

An aggressive on-site exploration program, including 42,000 ft of diamond drilling, was carried out in 1987. Significant copper-silver- gold mineralization was defined at depth in the North zone area of the Waterline zone and this is being further evaluated in 1988. High grade mineralization was also intersected down dip of previously known zones beneath the Southern Tail pit.

About $4.9 million was spent on exploration last year, much of it going towards acquiring or optioning 23 new precious metal properties. In total, 178 precious metal prospects across Canada were examined during the year.