Geomaque bleeds red in 2001

Struggling junior gold miner Geomaque Explorations (GEO-T) has released its year-end financial results, and they aren’t pretty.

The net loss for the year ended Dec. 31, 2001, was US$10.5 million (US17 per share) on revenue of US$9.2 million, compared with a loss of US$13.6 million (US25 per share) on revenue of US$21.2 million in 2000.

At Geomaque’s new Vueltas mine in Honduras, production totalled 27,077 oz. gold for the year (commercial production was attained mid-year).

During the 6-month operating period, Geomaque realized a price of US$275 per oz., with cash costs totalling US$241 per oz. Cash generated from operations amounted to $573,000.

The company has been plagued by operational difficulties at Vueltas and was unable to achieve production targets set out in the feasibility study. The company says the difficulties are mainly related to the production of suitable agglomerates from the oxide ore, which has a high clay content, and to deficient operational procedures related to multiple stacking in an environment of high rainfall.

As a result of these problems, Geomaque failed to meet the terms of its repayment agreements, leading to a corporate restructuring in December.

Geomaque is much more optimistic about the performance of its second leach pad at Vueltas, completed in February 2002, and rising gold prices should also bring some relief.

In addition, Geomaque recovered some gold from its San Francisco mine in Mexico. The operation has been in leach-only mode since November 2000. Heap rinsing commenced in August 2001 and continued into the first part of 2002.

During 2001, 17,092 oz. gold were recovered, compared with 69,100 oz. in 2000.

Geomaque is also exploring the Marathon palladium project in Ontario.

Geomaque ended 2001 with just US$614,000 in cash, compared with US$2 million in the previous year. February 2002 saw the second tranche of a private placement of shares amounting to $998,000.