Coniagas struggles to show a profit in 1987

With a new gold mine expected to be up and running next year and a resumption of production at Bachelor Lake, the Coniagas Mines group is looking ahead to better things in 1988.

As reflected in a mixed bag of third quarter results, 1987 won’t go down as a banner year but it could prove to be a watershed for the Toronto-based mining group.

Coniagas reported earnings for the 9-month period of $239,916 or 52 cents per share compared with $431,775 or 94 cents per share during the same period last year.

Last year’s 9-month results included $155,106 from a share issue and a writedown of $160,000 on a property sale.

Coniagas said revenues during the first nine months of 1987 came mostly from a gain on the sale of $362,749 in investments, and a gain of $214,280 on the sale of an interest in the McFinlay joint venture.

On Sept 30 Coniagas reported a deficit of $59,131, down substantially from $383,319 during the same period last year.

Coniagas is slowly earning its way into Garrison Creek Consolidated’s 40%-owned Michaud property near Matheson, Ont., by spending $1.34 million over two years.

As operator and 60%-owner of the property, Falconbridge Ltd. is carrying out the 2-year exploration program which it regards as a second look at Michaud.

Through its 20% equity interest in Quebec Sturgeon River Mines, Coniagas has an indirect position in a number of companies. They include St Andrew Goldfields which is attempting to bring its Stock Twp. gold property near Timmins, Ont., to production by late 1988.

An 8,200-ft drill program was also completed at the company’s Taylor Twp. property seven miles further east.

After spending $4.1 million by Sept 30 on the Stock Twp. property, St Andrew has completed some 4,285 ft of underground diamond drilling on the N-2 zone. St Andrew said that program confirmed the downward continuity of the zone to at least 1,000 ft from surface.

Around 495 ft of drifting on the 2nd, 3rd and 4th levels and 166 ft of raising above the 4th level was completed during the period.

“The raise above the 4th level completed during September, encountered sections of high grade ore especially in the last 30 ft where muck samples averaged 0.234 oz gold per ton cut and 0.406 oz uncut,” St Andrew said.

A 56%-owned subsidiary of Quebec Sturgeon, St Andrew reported net earnings of $129,399 or 11 cents per share in the first nine months of 1987 compared to $159,041 or 14 cents per share in the same period last year.

On Sept 30, the St Andrew cash position was $8,801,774, up slightly from $8,468,777 on the same date last year.

Anglo Dominion Gold shipped 5,160 oz (equivalent to 36,917 tons averaging 0.161 oz) to the Kidd Creek smelter from its Missinabie mine near Wawa, Ont. during the recent 9-month period. Net earnings during the same period amounted to $129,640 or 49 cents per share compared to a net loss of $433,317 or 16 cents per share for the 6- month period ended June 30.

Anglo Dominion said its 6- month losses were due to the cost of a 61,300-ton underground mining program completed on April 25. The company also reported net earnings of $137,519 or 58 cents per share in the first nine months of 1986.

Anglo Dominion raised its interest in the Little River, Nfld., project to 50% by acquiring Coniagas’ 25% joint venture interest in early November. A winter diamond drilling tested a stratabound gold mineralization discovery along a strike length of more than three km. Operator Westfield Minerals has targeted some new areas for a 7,000- ft follow-up drill program, the company says.

During the 9-month period ended Sept 30, Phoenix Gold Mines sold its 42.8% interest in the McFinlay joint venture near Red Lake, Ont., for $4,285,720. However, it retains an 8.6% net profits royalty interest.

As a result, the company reported a cash position of $5,311,279 on Sept 30 compared to $1,065,176 at the same time last year.

Phoenix also reported a net loss of $1,227,418 or 29 cents per share in the recent 9-month period which compares with net earnings of $33,374 during the same period in 1986.

Phoenix Gold is 77% owned by Quebec Sturgeon which reported a net loss of $1,336,155 or 14 cents per share during during the 9-month period. That compares with a loss of $5,710 or 1 cents per share last year.

Quebec Sturgeon said the loss was largely attributable to a shut- down at the Bachelor Lake gold mine in Desmaraisville, Que. As reported (N.M., Dec 7/87), production has since resumed at Bachelor Lake where dillution problems are apparently being overcome.