Black Hawk remains in the black during quarter

Toronto-based Black Hawk Mining (BHK-T), owner and operator of the Keystone gold mine in Manitoba, has posted a strong first quarter.

During the 3-month period ended March 31, the company earned $1.33 million (or 2cents per share) on revenue of $7.64 million. This compares with a net profit of $1.37 million (2cents per share) on revenue of $7.52 million during the corresponding period in 1997.

During the quarter, Black Hawk produced 15,735 oz. gold and sold it at an average price of US$346 per oz. During 1997’s first quarter, the company produced 14,684 oz. gold and realized an average price of US$376 per oz.

First-quarter 1998 bullion revenue included US$755,000 of deferred revenue realized when the company’s hedge program was closed out in December 1997.

Cash operating costs for the quarter were US$202 per oz., down from US$205 per oz. a year earlier.

During the quarter, Black Hawk sold its 100% interest in the Redstone nickel mine near Timmins, Ont., to privately held Sanca Gold. In return, Sanca is paying a total of $500,000 in three installments and issuing 1 million of its shares to Black Hawk at 30cents each. Black Hawk also has an option to buy 350,000 units of Sanca’s capital stock, exercisable at 30cents each and expiring April 7, 1999. Each unit comprises one share and one share purchase warrant entitling the holder to buy another Sanca share for 40cents until Oct. 7, 2000. Black Hawk also retains a 5% net-profits interest in the mine, capped at $250,000.

Black Hawk reports that the mining permit application for its Bald Mountain gold-silver project in Maine is still under review by state and federal agencies, and that public hearings are expected to be held during the second quarter of 1998.

The company says that completion of its proposed merger with Triton Mining (TTM-T) hinges on the approval of Triton’s shareholders, who will vote on the deal at Triton’s annual meeting on May 25.

Black Hawk has advanced to Triton loans totalling US$2.35 million, of which US$1.5 million is repayable on March 31, 1999 and the balance on Oct. 22, 1998.

The advance of US$1.5 million was made to enable Triton to secure the Manantial Espejo project in Argentina from Barrick Gold (ABX-T). Subsequent to making the payment to Barrick, Triton entered into a preliminary agreement to sell a 50% interest in Manantial Espejo for US$1.5 million and a commitment to spend US$2 million on exploration and development in the next 12 months.