Major reduction in ore processing nets $1.6 million loss for

A loss of $1.6 million or 12 cents per share — the first quarterly loss since 1977 — has been realized by Agnico- Eagle Mines (TSE) for the second quarter ended June 30. The loss is attributed by management to a major reduction in ore processed at the company’s gold mine near Joutel, Que.

Operating reductions are due to on-going renovations to the bulkhead on the main ore pass and the replacement of the underground crusher, Agnico says.

The result of the development work, which was also compounded by a shortage of experienced miners, resulted in only 75,314 tons of rock being processed during the quarter. During the same period last year, the mine processed 136,932 tons of rock.

Despite a higher grade, the reduced tonnage hindered gold production which totalled 12,337 oz compared to 18,010 oz in the same period last year.

Gold output, which came in at a cash operating cost of $512(C) per oz during the period, is expected to improve during the second half. A return to a 7-week mining schedule combined with sublevel retreat mining, resulted in gold production of 6,700 oz in July. During that month, the mill processed 31,170 tons grading 0.23 oz gold per ton. A similar performance is expected for the remainder of the year, Barry Landen, financial officer at Agnico told The Northern Miner.

“Although we’ll continue to have mining problems, we have rectified a lot of them,” Landen said.

At the company’s silver division at Cobalt, Ont., a mine operating loss of $236,000 was realized during the quarter. The division produced 359,513 oz of silver from 16,616 tons of rock grading 21.6 oz of recovered silver. However, silver mining costs of $8.82 per oz exceeded revenues of $8.16 per oz. Agnico says that the new Penn mill is improving operating efficiency since beginning operations in July, 1987.