Balance sheet improves in ’89 for Giant Yellowknife Mines

Earnings of $3.6 million (43cents per share), before unusual items, on revenue of $119.5 million were reported by Giant Yellowknife Mines (TSE) for 1989. After providing $3.8 million for an unusual after-tax loss related to the writeoff of amounts owed by ERG Resources (TSE), an affiliated company, and the decline in value of a joint venture interest, the net loss for the year was $189,000 (2cents per share).

For 1988, the gold producer had a loss of $757,000 (9cents per share) before extraordinary items and a net loss of $30.4 million ($3.62 per share) after writing down the carrying value of the company’s Timmins division.

Total gold production in 1989 was 198,013 oz., compared with 187,354 oz. the previous year.

The company reports improved operating performance during the second half of 1989. The production cost for conventional operations for the second half of 1989 was US$344 per oz., compared with US$468 for all of 1988.

During the fourth quarter last year, the company reported a consolidated net loss of $3.1 million on revenue of $29.4 million, compared with a loss of $32.7 million on revenue of $27.8 million for the same period in 1988.

Cash flow from operations in 1989 totalled $18.3 million compared with $2.1 million the previous year.

Under its forward sales policy, the company is committed to sell a total of 325,600 oz. for delivery up to October, 1992, at an average price of $545 per oz.

The company says preliminary estimates of the mineral inventory at the end of 1989 for conventional operations stood at 12.5 million tons grading 0.13 oz. gold per ton, compared with 13.1 million tons averaging 0.12 oz. at the end of 1988.

A further decrease in the production cost is expected this year because the company says it is entering into higher-grade mining areas. Because of new operating procedures implemented in 1989, the company says it expects to be able to maintain gold output at 1989 levels for at least the next three years. Giant Yellowknife Mines (TSE) Year ended Dec. 31 1989 1988 Revenue (000s) $119,505 $123,896 Net loss (000s) 189 30,377 Net earnings (per share) (0.02) (3.62)