Pegasus earnings reflect higher gold production

Pegasus also had significant base metal production from its Montana Tunnels mine near Helena, Mont., which last year produced 36.8 million lb zinc, and 16.8 million lb lead.

Average cash costs, net of by- product credits, dropped almost 10% to $234 per oz in 1988, said John Willson, newly appointed president and chief executive officer. He added that costs at Montana Tunnels are “among the lowest of any North American gold mine.”

Fourth quarter earnings of $2.6 million were adversely affected by several non-recurring items. A charge against earnings of $6.1 million related to deferred mining costs at the Zortman/Landusky mine in northern Montana. In addition, $1.7 million in deferred costs was charged to the Buffalo Hump exploration project in Idaho. Both of these charges were partially offset by a gain of $5 million from the sale of the company’s remaining interest in Pan Australian Mining.

Production from Pegasus’ Zortman/Landusky mine last year amounted to 111,700 oz, roughly a 5% increase from 1987. An additional 26 million tons of ore was added to reserves which now stand at 48 million tons grading 0.018 oz gold. The company has extensive holdings surrounding the mine and there is still plenty of exploration potential left.

Exploration expenditures at existing mine sites and at outside properties tripled to $7.2 million and reflected the company’s strategy for continued growth, said Pegasus.

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