A drop in grades, coupled with lower gold and silver prices, helped push Cheni Gold Mines (TSE) into the red with a loss of $3.7 million or 33 cents per share for the nine months ended Sept. 30.
The loss compares to net earnings of $2.5 million or 23 cents per share in the first nine months of 1990.
Operating costs for the period increased to US$346 per oz. gold equivalent from US$199 in 1990. The increase is related to a drop in feed grades to 0.21 oz. gold and 4.68 oz. silver from 0.28 oz. gold and 7.68 oz. silver last year. In addition, the final development of the Cliff Creek zone resulted in higher mining costs.
Cheni recently announced that it may be forced to suspend mining operations at its Lawyers mine in north-central British Columbia due to a downgrade in ore reserves as well as the current low gold and silver prices. If mining is suspended at year-end, milling of stockpiled ore would continue to mid-1992.
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