Continued low gold prices, suspension of mining operations at the Joe Mann underground gold mine in northern Quebec and writedowns totalling $45.7 million all resulted in a considerable loss for
The company posted a loss of $63.6 million (or $4.04 per share) on revenue of $15.7 million, compared with a year-ago loss of $12.7 million (81 per share) on $22.5 million. Cash consumed by operations increased to $13.8 million in 2000 from $10.3 million in 1999. The last positive cash flow reported was $3 million, in 1998.
Operations at Joe Mann, south of Chibougamau, were temporarily suspended in mid-November, following problems with the adoption of cut-and-fill mining. What’s more, gold mining at the Santa Gertrudis operation in Mexico were suspended in mid-October, owing to limited reserves and lower-than-expected production.
Overall, the company poured 38,400 oz. gold in 2000, down considerably 53,700 oz. in 1999, while cash costs swelled to US$463 from US$292 per oz. The higher costs reflected the low level of production and high fixed costs at the mines. Campbell realized a price of US$279 per oz. for its production in 2000, which is equal to the year’s average market price. By comparison, the company realized US$276 per oz. in 1999, which was lower than the then-average market price of US$279 per oz.
The bulk of production came from Joe Mann, which operated from April until mid-November and turned out 26,300 oz. at US$465 per oz., down from 51,300 oz. at US$292 per oz. in the previous year. Head grades and recovery rates were little-changed between the two periods.
In the second quarter, Campbell hopes to arrange financing to begin development between the 2,350-ft. and 3,400-ft. levels at Joe Mann.
Through the end of the fourth quarter, Santa Gertrudis contributed 12,300 oz. from limited mining and heap leaching. Cash costs came in at US$449 per oz.
The company continues to seek a buyer for the property, which boasts considerable near-surface potential.
In light of the depressed gold price, the company took a writedown of $45.7 million on the carrying value of its mining properties.
At the end of 2000, working capital stood at $7.4 million, down from $31.4 million a year earlier.
In late March, the company announced plans to merge with two other struggling juniors active in the Chibougamau camp, namely
The merger is expected to result in savings of $4.5 million annually, while ensuring that the Chibougamau operations remain profitable at current gold and copper prices.
Since the suspension, Campbell has prepared a plan that would permit operations to resume when development and exploration work is completed below the 2,500-ft. level. Resources at Joe Mann stand at 1.7 million tons grading 0.326 oz. gold per ton (548,299 contained ounces) and 0.28% copper.
MSV owns a 16% interest in the Copper Rand 5000 project, also near Chibougamau, where resources are pegged at 1.9 million tons grading 1.55% copper and 0.097 oz. gold per ton. The junior’s other Quebec properties are Corner Bay (copper) and Eastmain (gold).
GeoNova holds interests in 17 properties, most of which are in the Lebel-sur-Quevillon and Chibougamau areas.
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