Bond reports loss of $1.9 million (US)

The loss, the company says, is primarily a result of unrealized foreign exchange losses totalling $2.77 million during the quarter, compared with $77,000 a year ago.

First-quarter revenue was $54.4 million, compared with $44.2 million in the earlier quarter. Income from operations fell to $4.88 million from $7.74 million for the comparable quarter last year. The decrease was due to a gold price of $367(US) per oz compared with $409 realized a year ago.

The company’s North and South American gold production increased to 116,565 oz, up from 86,512 oz produced in the year’s earlier quarter. That total includes the first month’s production from BIG’s new Bullfrog open pit mine in Nevada which began commercial operation in September.

During the quarter, the company entered into a gold loan agreement for 215,000 oz worth a maximum value of $80 million. The company borrowed and sold 110,805 oz of gold for $40 million to be repaid in semi-annual instalments from Dec 31, 1990, to Dec 31, 1993. The provisions of the Bullfrog gold loan agreement require the company to maintain minimum hedging positions for production from the new mine.

BIG’s previous 48% equity interest in Gold Mines of Kalgoorlie (GMK) was reduced to 11% during the quarter. The company’s share of GMK’s results from operations will not be included in its results in future periods.

Average cash cost of production for BIG’s North and South American operations was $215 per oz for the quarter, including byproduct credits, compared with $144 per oz for the year’s earlier period. Costs increased because a larger share of BIG’s gold production is coming from its North American mines, which have higher average costs than the El Indio mine in Chile. Costs also increased as a result of lower copper byproduct credits from lower production at the El Indio mine.

Production for the current fiscal year is expected to reach 650,000 oz, the company says.

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