Earnings up once again for U.S.-based Battle Mtn.

Improving gold prices and operating efficiencies are the chief reasons behind the 60% profit boost found on the latest financial statements from U.S.-based Battle Mountain Gold.

For the nine months ended Sept 30 the company netted $18.2 million or 42 cents per share, up from the $11.4 million earned during the same period last year. Indeed, the current 9-month figure even exceeds the total net income of $15.4 million or 36 cents per share earned during all of 1985.

With its major asset being the 225,000-oz-per-year Fortitude gold mine in Nevada, Battle Mountain posted revenues of $66 million for the current 9-month period compared with $58.7 million in the same period last year.

Looking specifically at the third quarter, earnings were $6.3 million or 15 cents per share on revenues of $23 million compared with $4 million earnings on revenues of $19.6 million during the same period in 1985.

Gold recovery factors remained at about 96 cents during the third quarter at the Fortitude mine, up from 92% in the same period last year. So far this year 191,000 oz of gold has been recovered versus 167,000 oz recovered in the comparable period of 1985. Silver production was also higher at 806,000 oz compared to the 501,000 oz recovered in the same period of 1985. Less waste, higher grade ore

At the Fortitude, less waste was encountered and ore grade was higher than anticipated, says Chairman Douglas J. Bourne. Right now the ore is being mined from areas previously expected to be mostly waste. Mr Bourne says this gain in ore may delay the transfer of mining crews from Fortitude to start development work at the nearby Surprise gold deposit by about six months.

However, production at the Surprise is still expected to begin the first quarter of 1988. Continuing evaluation of the Surprise is under way and a definitive mine plan and reserve estimates are expected by independent mining engineers by the end of this year.

Earlier estimates by the company peg the Surprise to contain 160,000 oz of gold. (N.M., Aug 8/86)

Further metallurgical testing is also being carried out to determine the most favorable plan for treating the higher grade, but deeper, Surprise ore. Mr Bourne explains the options being considered include heap leaching, building a small milling plant at Surprise or hauling the ore to the Fortitude mill, about six miles away.

Right now, it appears the relatively short haul of the high grade ore to the Fortitude may be the most cost effective, notes the chairman. Production in ’88 at Pajingo

Activity is continuing on the Scott lode in the company’s Pajingo prospect in Queensland, Australia, with initial production expected at the beginning of 1988.

An Australian engineering-construction firm has been selected to do the detail engineering, equipment procurement and construction management.

A mine design and mine reserve calculations are expected to be ready by the end of this year. The latest reserve figures for the Scott lode stand at 1.6 million tons grading 0.32 oz gold and 1.17 oz silver per ton.

The company’s mining lease application is still pending and negotiations are continuing with landowners, says Mr Bourne.

Also, the tax laws in Australia remain in a state of flux, Mr Bourne says. At present there is no federal income tax on gold production. If Australia imposes an income tax, it would probably be at a 49% rate and might be phased in over four or five years. Even then, the bottom-line net impact on Battle Mountain of U.S. and Australian taxes on Pajingo production would fall between 25% and 49%, says Mr Bourne.

Battle Mountain expects to spend some $10 million on exploration this year, specifically targetted to the western U.S., Alaska and Australia.