EXPLORATION 1998 — Royalty sisters report reserve boost at Ken Snyder

Low gold prices translated into lower earnings for Franco-Nevada Mining (FN-T over the 9-month period ended Dec. 31, 1997.

The royalty company reported income of $37.9 million (or 50cents per share) on revenue of $63.7 million, compared with $48.9 million (69cents per share) for the corresponding period in 1996.

Cash flow, however, was down only 6% over the nine months. And while Franco has spent more than $35 million on its mineral properties and paid $28 million in dividends, its working capital actually increased by 5%, to $377.6 million from $358.9 million.

In January, the company announced a 58% increase in reserves, to 2.17 million tons grading 1.04 oz. gold and 1.65 oz. silver per ton, at its 50%-owned Ken Snyder mine in the Carlin trend of Nevada. The mine, which is scheduled to enter commercial production by May, is expected to crank out 250,000 oz. gold-equivalent per year.

Franco’s sister company, Euro-Nevada Mining (EN-T), holds the other 50% interest in Ken Snyder.