Belmoral looks for turnaround

Kenneth Dalton, addressing shareholders at the annual meeting, said, “most of our projects have been disappointing.”

The Toronto-based company, with two producing gold mines near Val d’Or, Que., turned out 45,174 oz last year, down from 52,830 oz in 1987.

Belmoral also reported a net loss of more than $7 million for 1988, compared to a net gain of $3.54 million in 1987. The size of the 1988 loss is attributable in large measure to a $6.45 million write- down of investments.

Rising production costs have also hurt the company. The unit operating cost (including administration) for 1988 was $425(C) per oz. Chief Financial Officer Rene Galipeau said the unit operating cost for the first quarter of this year, during which production totalled 13,352 oz, was $503. Gold production

Belmoral, which has cut back on its 1989 exploration and development programs pending suitable financial arrangements, is projecting gold output of 57,000 oz for 1989, although President Steven Harapiak said that estimate may be high. Since ore processed during the first quarter had a lower-than-expected grade, which resulted in a lower output, he said production may be closer to 52,000-53,000 oz this year.

Dalton said he remains optimistic his company will be producing 100,000 oz gold from its existing properties by 1991.

Flow-through financing for junior-mining exploration is dying a slow death under the new federal government regulations, the chairman said, although he quipped there are no problems “$600 gold wouldn’t cure.” He said his company needs $5 million to have all of its programs up and running this year.

He said Belmoral’s hedging program will see the company receive more than $400(US) per oz for its gold to the end of 1989.

One of Belmoral’s more recent problems is a lawsuit it faces from Canamax Resources (TSE) over a proposed takeover by Belmoral of the Ketza River gold mine in the Yukon. Belmoral terminated the deal to purchase the mine earlier this year. Dalton said Belmoral has filed a statement of defence and launched a countersuit.

A decision by the Quebec Court of Appeal ordering a new trial in connection with a fatal cave-in in 1980 at the company’s Ferderber mine was recently upheld by the Supreme Court of Canada. The company was originally acquitted of criminal negligence charges. Dalton said Belmoral is reviewing its alternatives. “Hopefully, we’ll be able to resolve that situation,” he said.

In Arizona, where associated company Roddy Resources (TSE) operates a small heap leach gold mine, Belmoral has acquired additional property. Harapiak said exploration of these claims is contingent upon Belmoral finding partners willing to finance the work.

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