Amax Gold posts loss for past year

Declining operating costs were not sufficient to stave off a year-end loss for Amax Gold (NYSE).

The company recorded a net loss of US$23.9 million (or 36 cents per share) in 1995, which is nevertheless an improvement over the loss of US$35.5 million (or 47 cents per share) suffered in the previous year.

Gold production from the company’s four mines totalled 238,000 oz., which is essentially unchanged from 1994. Cash operating costs fell to US$326 from US$340 per oz., mainly as a result of increased efficiency at the Hayden Hill mine in California and the Guanaco mine in Chile.

Amax also reported a loss of US$8.5 million (11 cents per share) for the final quarter of 1995, an improvement over the same period in 1994 when it recorded a deficit of US$27.4 million (36 cents per share).

Despite the year-end loss, Chairman Milton Ward is optimistic the company will end up in the black in 1996. He anticipates cash costs will continue to decline throughout this year and next, and that the Refugio, Fort Knox and Kubaka projects will triple total annual gold production to 800,000 oz.

In Chile, Amax and its 50% partner Bema Gold (TSE) completed construction on Refugio in late 1995. Mining has begun, with the first gold pour expected during the first quarter. Amax’s share of the production is expected to exceed 100,000 oz. per year.

In November 1995, the company completed US$250 million in financing, with the help of Cyprus Amax Minerals (NYSE), for the construction of the Fort Knox mine in Alaska. Reserves at the wholly owned project stand at 4 million oz. and annual output is projected at more than 300,000 oz., beginning by year-end. At the Kubaka project in eastern Russia, reserves stand at 2.5 million oz. gold.