The leach and gold scavenger plants no longer used at Equity Silver Mines’ mill near Houston, B.C., will be reported as a writeoff in the fourth quarter. The $33.6-million writeoff will be reported as an extraordinary loss of $18.6 million net of deferred taxes.
As a result annual depreciation after 1987 will be reduced by $9.5 million and the impact on future net earnings will be an annual increase of an estimated $5 million.
The leach plant removed trace elements intially found in the ore which could interfere with smelter processes. Ore produced at a later date had lower levels of these elements and treatment of the concentrate was no longer required after April, 1984. The original cost of the two plants was $69 million.
Equity had 9-month earnings of $3.9 million. This included $7.3 million from the purchase and delivery to Placer Dome of five million oz silver under a silver sale agreement with that company.
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