Eskay writedown, restructuring prompt Homestake’s 8-month

A net loss of US$111.4 million was reported by Homestake Mining (NYSE) for the 8-month period ended Aug. 31, which includes US$117 million of pretax expenses relating to its recent acquisition of International Corona and subsequent restructuring.

Included as expenses are US$70 million of adjustments made to write down the carrying value of Corona’s Eskay Creek development property, US$39 million of transaction and reorganization costs, and US$8 million in other writedowns and accruals.

The financial information is the first to be published following the merger with Corona this past July, which was accounted for as a pooling of interests. Homestake’s third-quarter results will include an additional charge of US$7 million in September related to a workforce reduction at its Homestake mine in South Dakota. The large gold producer is conducting a mine-by-mine evaluation of reserves and the carrying value of its mineral properties which could result in further writedowns.