Profits for the first nine months for Equity Silver Mines rose to $3,916,000 or 13 cents per share on revenues of $60,593,000. This compares to a loss of $583,000 or 2 cents per share on revenues of $51,525,000 in the same period of 1986.
Included in the earnings is an after-tax profit of $7,319,000 resulting from the sale of 4,985,000 oz silver to Placer Development, under a silver sale agreement with Placer. Earnings from operations came to $14,179,000 compared to $14,869,000 in 1986.
During the third quarter, Equity made final payment on its bank loan, which amounted to $10,777,000 at Dec 31, 1986. Quarterly dividends to shareholders were commenced, with an initial payment of 0.05 cents per share for a total of $1,606,000.
The company reports that higher silver and gold prices were offset by increased depreciation and depletion charges as a result of the 1986 expansion of milling facilities, by increased smelter charges and the processing of lower grade ore. Average grade of mill feed was 2.25 oz silver per ton compared to 2.8 oz in 1986, but because of the mill expansion, silver production declined only 5% to 3,798,000 oz.
Gold production was lower than expected because of lower head grades and technical problems in the scavenger circuit which led to reduced recoveries.
Equity has entered into forward sales contracts for production to October, 1988, for 1.2 million oz of silver at an average price of $7.90(US) and 19,000 oz gold at an average price of $434 per oz.
Under Equity’s flow-through funded exploration program, 176 precious metal prospects have been examined to date. Twenty-two projects are under direct ownership, option or joint venture agreements for an expenditure commitment of $4.7 million. Five of these are being evaluated by diamond drilling.
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