Lac posts loss in second quarter

Citing lower realized gold prices and a decrease in production, Lac Minerals (TSE) reported a loss of US$800,000 for the quarter ended June 30 compared with second-quarter earnings of US$4.4 million (US3 cents per share) in 1992.

Gold production in the second quarter was 265,000 oz. compared with 291,000 oz. in 1992. A 4.8% increase in production at the Bullfrog mine in western Nevada was more than offset by a 27,000-oz. decrease in production at El Indio mine in Chile. Cash costs for the quarter were US$205 versus US$230 over the same period last year.

Lac’s gold revenue averaged $356 per oz. for the quarter ended June 30 compared with $396 per oz. in 1992. In the second quarter, the company became better able to participate in a rising gold price by unhedging the balance of its 1993 production.

Exploration is continuing on the Nevada project in Chile and the Red Mountain property near Stewart, B.C. (See separate story on Stewart area exploration.) At the former, a new preliminary resource is being calculated for the Esperanza block following 22,000 ft. of drilling. Lac hopes to bring the deposit into production by late 1996 or early 1997.

At Red Mountain, surface and underground exploration is aimed at doubling the 1-million-oz. gold resource. The US$6-million program, which is to end in October, consists of 1,000 ft. of drifting and 19,700 ft. of diamond drilling. Environmental permitting is also under way.