Cheni earnings (August 13, 1990)

Net earnings for Cheni Gold Mines (TSE) for the six months ended June 30 totalled $2.5 million or $22 cents per share. The results compare with net earnings for the four months ended June 30, 1989, of $0.9 million (the mine began commercial production in March, 1989).

Cash flow for the 1990 period was about $6 million versus $2.8 million in the previous year.

Although revenues improved, results were adversely affected by falling precious metal prices. Taking forward sales into account, the average price realized for gold and silver was US$385 and US$5.05 per oz. respectively.

These prices compare with average spot prices over the period of US$366 per oz. for gold and US$5.01 per oz. for silver. Cheni has forward sales contracts to the end of 1990 totalling 4,900 oz. of gold at US$414.70 per oz. and 150,000 oz. of silver at US$5.65 per oz.

The company notes that operating costs at the mine continue to come down as a result of increased production and cost-cutting measures. Cash production costs per ton of ore amounted to $83.87 for the first six months of 1990 versus $94.20 in the year-earlier period. The average cash cost per oz. for the current period was US$196 per oz. of gold equivalent versus the 1989 average of US$215.006 0600,0206,0300,0008 Cheni Gold Mines (TSE) $000s except per-share items 6 months ended June 30 1990 1989 Revenue $16,300 $9,400 Net earnings 2,500 900

per share 0.22 0.08004