Earnings edge lower for Hemlo Gold

Higher spending on international projects resulted in a $1-million decline in first-quarter earnings for Hemlo Gold Mines’ (TSE).

The gold miner earned $12.6 million (13 cents per share) for the quarter ended March 31, compared with $13.6 million for the same period last year.

As activity in Australia and Ghana gathered steam, Hemlo spent $6.2 million on exploration and evaluation, compared with $2.8 million last year. The 1996 figure includes a $1-million charge related to the proposed merger with Battle Mountain Gold (NYSE).

For the quarter, production increased slightly to 110,800 oz. gold, while the company’s realized gold price increased 6% to US$404 per oz. Aggregate operating costs dropped US$2 to US$122 per oz.

The latest results from the Moyagee gold prospect in Australia include a 3-metre intersection grading 32.7 grams gold per tonne and a 4.3-metre intersection grading 14.2 grams. Hemlo has expanded the zone of mineralization to a strike length of 500 metres and a vertical depth of 400 metres and says the zone remains open to the south and at depth.

Meanwhile, at the Dunkwa project in Ghana, Hemlo has outlined a 400-metre-long zone of mineralization that remains open along strike. The latest results from the project, where Hemlo is earning a 65% interest from Birim Goldfields (CDN), include a 40-metre intersection grading 6.7 grams gold. Other geochemical anomalies on the property will be drill-tested later this year.