Despite higher gold production, Consolidated Nevada Goldfields (TSE) reported a year-end loss.
Three factors — lower-than-expected grades, US$5.2 million in writedowns and other expenses totaling US$5.1 million — contributed to a fiscal year-end loss of US$11.6 million (or US29 cents a share). This compares with a loss of US$7.3 million (US64 cents a share) for the same period in 1993. The company sold more than 31,000 oz. gold produced from its two mines, compared with just under 26,000 oz. in the same period last year. Revenues were US$14.9 million in 1994, compared with US$10.4 million in 1993. At the Aurora mine in Nevada, gold production was up. However, the grade was lower, which caused an increase in the cost per ounce. The increase forced the company to adopt a new mine plan which, while increasing the grade by 200%, has had the effect of reducing reserves by 29%.
As a result, Consolidated Nevada has suffered a US$3.3-million writedown on the carrying value of Aurora. Exploration is ongoing in an attempt to prove up reserves.
Meanwhile, at the Barite Hill mine in South Carolina, severe weather and lower-than-expected grades caused gold production to fall 25% below expectations, to almost 20,000 oz. Mining will end in October, but the company expects to produce about 6,500 oz. gold from the leach pads in 1995. A $1.9-million writedown is reported for the Barite Hill.
At the Nixon Forks project in Alaska, summer exploration has ceased and a new reserve calculation is pending. By next September, the company hopes to put the deposit into production at an annual rate of 60,000 oz.
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