Denver — Higher gold output, offset by declining silver production, contributed to an improved first quarter for
Gold production during the first three months of 2000 reached 173,470 oz., up 24% from the previous year, due in part to the contribution from the Lupin mine in Nunavut. Meanwhile, silver production dropped 38% to 1.6 million oz., as a result of the discontinuation of mining at the McCoy-Cove operation in Nevada (except the Cove South Deep deposit).
The higher gold sales translated into improved revenue of US$64.5 million, at an average realized price of US$310 per oz.
Echo Bay posted net earnings of US$3.8 million in the first quarter, up from a net loss of US$2.7 million in the corresponding period of 2000. The net loss attributed to common shareholders amounted to US$537,000 (or nil per share) in the first quarter of 2001, compared with an attributable net loss of US$6.3 million (4 per share) a year ago.
The company’s strongest contribution came from its half-interest in the Round Mountain gold mine in Nevada, which posted record production in the first quarter. Echo Bay’s share of production was 100,368 oz., up from 71,954 oz. a year ago. The company attributes the increase to the placement of additional ore on the heap-leach pads during the fourth quarter of 2000, better grades on the re-usable pads, and higher tonnage processed through the mill.
Cash operating costs held steady at US$185 per oz. as higher production offset increased fuel costs. During the quarter, the mine commissioned a new fleet of eight 240-ton haulage trucks, replacing several older, smaller trucks.
Echo Bay completed open-pit mining at the McCoy-Cove gold-silver mine during 2000, while underground mining at the Cove South Deep is expected to finish up in the second quarter.
Production was off considerably as a result of the shutdown. The operation produced 22,303 oz. gold and 1.6 million oz. silver, compared with 43,146 oz. gold and 3.8 million oz. silver in the first quarter of 2000. Cash operating costs jumped to US$247 per oz., as most of the quarter’s production came from low-grade stockpiles.
Reclamation at the site continues. The total number of acres reclaimed now stands at 1,600. Re-contouring waste dumps will continue for the next two years, as will seeding.
The Lupin mine completed its first year of operation after a two-year hiatus, contributing 37,954 oz. at US$217 per oz. Cash costs also benefited from a US$6-million gain (24 per oz.) from closing out certain Canadian dollar contracts. Echo Bay has deferred the gain, recognizing it through the third quarter.
At the underground operation, the company completed a winze that will enable crews to move ore to the hoisting shaft. It will enable them to mine an ore zone 200 metres below the winze. Exploration is returning encouraging values in the upper and lower portions of the mine.
Echo Bay recorded a gain of US$400,000 from the sale of power, having shut down the mill at the Kettle River mine in northeastern Washington during January. The company used the opportunity to perform preventive maintenance.
The operation produced 12,845 oz. in the first three months of 2001, down from 25,070 oz. a year ago, Echo Bay still expects to meet production targets for the year. Cash costs were US$242 per oz.
Echo Bay finished the first quarter with US$14.6 million in cash and equivalents. Total debt decreased by US$3.8 million, and the company retained US$19 million on its revolving credit line. The company also elected to defer interest payment on its US$100-million capital securities.
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