Dickenson production down but earnings slightly better

While gold production at Dickenson Mines’ (TSE) Red Lake, Ont., operation is down slightly from last year’s levels, the company reported a slight increase in first-quarter earnings.

Dickenson said earnings for the three months ended March 31 were $1.5 million or nine cents a share compared to earnings of $1.3 million or seven cents a share in the same period last year. Revenues during the quarter declined to $13.5 million from $15.4 million in the year-ago period.

Dickenson attributed the earnings increase to a 9% reduction in overall expenses, a $530,000 gain realized from a gold trading transaction in January and lower income and mining taxes.

Gold output at Dickenson’s Red Lake mine dropped to 16,939 oz. in the quarter from 21,389 oz. a year ago. But the company is still expecting production to increase in 1991 to 78,000 oz. from the 76,644 oz. extracted in 1990.

The company said mine operating costs have eased considerably to $459 per oz. from $515 in the fourth quarter of 1990.

Meanwhile, Dickenson’s 36.2% owned affiliate Wharf Resources (TSE) says its first-quarter profits increased by 43% to $1.7 million or nine cents a share from $1.2 million or six cents a share during the same period last year.

Revenues during the quarter were also up 6% to $7.1 million from $6.7 million in the year-earlier period. Despite severe weather conditions, Wharf extracted 15,773 oz. gold from its South Dakota heap leach mine, compared with 16,378 oz. in the 1990 quarter. But with production costs at US$219 per oz., Wharf says the mine is in a good position to meet its 1991 target of 90,000 oz.