Dickenson posts higher gains despite drop in gold output

Net earnings in 1987 for Dickenson Mines, which operates the Arthur W. White gold mine in northwestern Ontario, were $6.4 million (44 cents per share), compared with $4.59 million (39 cents per share) in 1986 (which included an extraordinary gain of $450,000).

Revenues in 1987 totalled $44.1 million compared with $35.6 million last year.

During the fourth quarter of 1987, the company recorded net earnings of $1.5 million (10 cents per share), compared with $1.8 million (14 cents per share) for the same period in 1986.

Total gold production at the White mine in 1987 was 64,000 oz, down from 67,900 oz in 1986. Dickenson has a 66% interest in the mine (Cambior Inc. holds the remaining 34%) and its share of the gold production in 1987 was 41,600 oz compared with 44,100 oz the year before. During the fourth quarter of 1987, gold production totalled 16,900 oz, of which Dickenson’s portion was 10,900 oz.

The company says production at the mine last year was adversely affected by a month-long strike and a shortage of skilled miners.

Towards the end of 1987, Dickenson started buying shares in Wharf Resources, eventually ending up with a 26.5% interest and control. Wharf operates a heap-leach mine in South Dakota. Dickenson says it will “equity account” for its Wharf holdings in 1988.

In other news, Kam-Kotia Mines, which holds about 33% of the voting shares of Dickenson, recorded earnings in 1987 of $1.2 million (10 cents per share) before an extraordinary item and $2.2 million (25 cents per share) after an extraordinary item. (The extraordinary item pertains to an increase in the carrying value of the company’s investment in Dickenson arising from theissue of shares by Dickenson.)

In 1986, Kam-Kotia reported earnings of $2 million (22 cents per share) after a similar extraordinary gain of $1.5 million.

Dickenson has a 47% interest in the common shares of Kam-Kotia and a 29% interest in its sister company’s preferred shares.