Echo Bay in black despite lower output

Despite lower production levels, Echo Bay Mines (TSE) managed to turn a profit in 1994.

The company earned US$8 million (or 7 cents per share), compared with US$3.6 million (or 3 cents per share) in the previous year.

Total gold production declined 6% to 818,000 oz. from 874,000 oz. in 1993, although the average selling price realized by the company rose to US$387 from $360 per oz.

Silver production declined, as well, by 16%, to 10.4 million oz. from 12.5 million oz..

Mining of deeper ore levels at two of the company’s four mines is blamed for the decline. At the McCoy-Cove mine in Nevada, deeper sulphide ores have lower mill recovery rates than shallower, oxide ores. Similarly, at the Lupin mine in the Northwest Territories, deeper ores have poorer grades. Total gold reserves dropped by 3% to 11.3 million oz., while silver dropped by 21% to 82.7 million oz.

However, the company was able to offset the decline in production by holding the line on costs. At US$214 per oz., the consolidated cash production cost was unchanged from the previous year.

Exploration expenditures doubled to US$27.1 million, compared with US$13.5 million in 1993. Forty per cent of the budget was spent outside Canada and the U.S., with major programs undertaken in Mexico, Latin America and West Africa. This portion is expected to rise to 60% in 1995.