Echo Bay has US$32 m loss despite cost improvements

Echo Bay reported a net loss of US$32 million or 32 cents per share for the nine months ended Sept. 30 compared with earnings of $27.2 million or 28 cents per share in the same period last year. The company’s 9-month revenues increased to US$245.2 million from US$208.7 million in the equivalent 1989 period.

Net earnings for the three months ended Sept. 30 dropped to US$5.1 million or 5 cents per share from US$9.6 million or 10 cents per share in the 1989 third quarter. Revenues during the quarter increased slightly to US$88.9 million from US$84.6 million a year earlier.

Contributing to the drop in earnings was reduced gold production at the McCoy/Cove operation in Nevada where Echo Bay has installed a new treatment facility within its mill. While the facility is designed to neutralize contaminants in the mine tailings pond, third-quarter gold production dropped to 58,799 oz. at McCoy/Cove from 82,964 oz. last year.

As a result, overall third-quarter output from Echo Bay’s U.S. and Canadian mines dropped slightly to 208,507 oz. from 218,597 oz. in 1989. However, consolidated cash production costs were US$244 per equivalent oz. of gold produced in the quarter, up from US$210 in the 1989 period but down from US$251 in the first half of this year.

After producing 5,160 oz. gold this year, Echo Bay’s Borealis mine in western Nevada has been mined out 1993. 3 months ended Sept. 30 1990 1989 Revenue $88,900 $84,600 Net earnings (loss) 5,100 9,600

per share 0.05 0.10 9 months ended Sept. 30 1990 1989 Revenue $245,200 $208,700 Net earnings (loss) (32,000) 27,200

per share (0.32) 0.2804