About 17,500 ft of waste development was completed in 1988, but this will drop to 14,000 ft this year, he pointed out. Exploration costs, which added $85 to the company’s all inclusive cost of $403 per oz, were also cited. “We are working at bringing costs down to a more reasonable level,” he emphasized.
Commenting on a shareholder’s question about Blackdome’s market performance, Drever conceded the company’s Clinton gold project was viewed as a “short-lived” situation because, like many vein-type gold mines, it doesn’t have a large reserve base.
“This reserve problem will be put to rest with a proven track record,” he insisted. Drever noted that most gold stocks have been hit hard and he agreed the dividend reduction probably had an effect as well.
In any event, gold production of 51,629 oz for the year was a record and the company reported a profit for its third consecutive year. Net earnings were $1.9 million or 22 cents per share compared to $5.5 million or 66 cents the year before. The company has $11.9 million in working capital.
Discussing the proposed merger with MinVen Gold Corp. (TSE) which owns 50.7% of Blackdome, Chairman James Anderson said cash flow from Blackdome will be used to finance the activities of MinVen over the next few years. The Gilt Edge mine in South Dakota, which is scheduled to produce 220,000 oz gold in 1993, will be the flagship for the merged company. At the MinVen meeting held the day after Blackdome, Anderson said the expansion project at Gilt Edge (to conventional milling) is being permitted and feasibility work should be completed in the third quarter.
“Blackdome will be a wholly- owned subsidiary and it will be a very active and growing force in Canada,” he insisted. The merger would see Blackdome shareholders get one share of MinVen plus a cash payment of 42.5 cents for each share held. Details of the cash payment have yet to be worked out.
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