It’s been a long difficult struggle for Equity Silver Mines (TSE) since production began over six years ago and things probably aren’t going to change.
But the company is finally earning money ($3.6 million in 1987 before writedowns) and expects to “meet its cash requirements, pay dividends on its preferred and common shares, and make a profit for common shareholders in 1988,” Anthony J. Petrina, president, told the annual meeting. “Operations continued to generate a healthy cash flow amounting to 47 cents a share,” he added.
Citing the marketability of Equity’s unleached concentrate, Petrina said the leach plant “need no longer be maintained” and he confirmed they probably won’t recover their investment in the gold scavenger circuit which has been “unable to operate at design capacity.”
As a result, the leach and gold scavenger assets have been written down to their estimated salvage value which should halve the annual depreciation charges recorded in recent years, he said.
Equity’s cash position increased to approximately $20 million as of March 31 but much of this has been committed. Minor expenditures are expected for equipment and facilities in 1988 and all exploration activities will be funded internally, Petrina noted. Provisions are being made for post-closure treatment of mine waste dumps which are acid- generating.
The company’s off-property exploration budget this year is $3.7 million and to date 26 precious metal prospects have been acquired under direct ownership, option, or joint venture agreements. In addition, $850,000 will be spent on regional exploration and to evaluate newly-defined areas of copper- silver-gold mineralization on the mine property north of the Waterline zone and beneath the Southern Tail pit.
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