Callahan loss $1.2 million

In the latest interim report, President Charles Snead noted that consolidated silver revenues from the Galena and Coeur mines were down by approximately 62%. Galena mill throughput showed a modest increase to 50,725 tons, but the average grade was slightly lower at 15.7 oz, he said.

Significant new reserves have been added to inventory by Asarco Inc. (NYSE) in the past few years and diamond drilling has generated attractive results northwest of the Galena shaft on the 5,200 level. “Numerous veins have produced attractive tonnage and grade in this area at higher levels in the mine,” he pointed out.

Production at the Ropes mine was hampered by lower grades, reduced tonnage, and lower gold prices. Head grades were down by approximately 10% (to 0.07 oz) because of limited access to better grade areas. Indeed, higher grade production from the lower reaches of the mine has been halted pending completion of shaft sinking to the 1,620 level by mid-year.

“The higher grade ore between the 1,152 and 1,548 levels is drilled, blasted and ready to be pulled following completion of the 1,620 facilities,” he added.

Gold production during the quarter was 8,882 oz and the average price realized during the period was $395.54 per oz, down 13% from last year.

Callahan recently concluded an agreement with Round Mountain Gold, Homestake Nevada Corp., and Bargold Corp. to purchase their interests in the Corcoran Canyon silver-gold project in Nye Cty., Nevada. The property consists of 225 unpatented lode mining claims covering approximately 4,000 acres. It includes the Silver Reef claims under lease from Landmark Resources (VSE).

Callahan has committed to spend $300,000 within a year for exploration work on the property. During this period, the company will have an exclusive option to purchase the property for a total of $2 million.

“Callahan has ample cash to pay for the programs and management and the board of directors feel that these expenditures must be made to build for the future despite their effect on current results,” he emphasized.

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