Campbell continues losses

Care and maintenance costs at operations in Quebec, Mexico and Panama continued to drag Campbell Resources through red ink during the second quarter.

During the three months ended June 30, the company spent $476,000 on care and maintenance, up from $80,000 a year earlier. So far this year, expenditures have totalled more than $1.8 million, up from $217,000 during the same period of 2000.

The company’s second-quarter net loss was $931,000 (or 6 per share) on zero sales revenue, compared with a loss of $4.7 million (30 per share) on revenue of $3.5 million during the corresponding period last year. So far this year, the loss tallies $3 million (19 per share) on nil revenues, compared with a year-ago loss of $6.5 million (14 per share) on $4.8 million in sales.

Second-quarter work by Campbell included the completion of an internal feasibility study at the Joe Mann underground gold mine, south of Chibougamau, Que.

The study contemplates a $10-million investment for development and exploration. This would be aimed at restarting the mine at 1,040 tons per day. Cash flow is pegged at $14.3 million over 2.5 years, with cash production costs (excluding pre-production development, exploration and reclamation costs) of about US$195 per oz.

A decision on restarting operations should be made by the end of the third quarter. Production at Joe Mann was suspended in November 2000.

In late July, Campbell acquired an additional 10% interest in Corporation Copper Rand (CCR) giving it 26% of the capital in CCR, through its merger with MSV, which remains the operator of the project in Chibougamau.

Work will wrap up in a few weeks on modifying Copper Rand’s hoisting system and preparations for the deepening of shaft no. 4. The contract for the deepening has been awarded to Val d’Or-based Ross Finlay.

Campbell’s merger with MSV Resources and GeoNova Explorations became effective June 30.

The company pegs 2002 production at about 67,600 oz. gold and 4 million lbs. copper. The levels could be increased to 72,000 oz. gold and 23.2 million lbs. copper by adding MSV’s Corner Bay copper project, which is also in Chibougamau.

At the end of June, the company had cash and short-term deposits of $3.4 million. This includes restricted cash of $836,000, which secures Campbell’s contingent obligations on outstanding calls for 16,600 oz. gold maturing during 2001 at US$350 per oz.

The company notes that, with the merger, its total assets increased by $15 million to $44.6 million.