Low gold prices have taken their toll on
Losses in the third quarter totalled $758,000 (2 cents per share) on revenue of $4.3 million, compared with a loss of $138,000 on $5.8 million in the corresponding period of 1998.
The company, which has only 5% of its reserves hedged, realized US$308 per oz. for its production, for a premium of US$49 over the spot price but a loss of US$24 over that realized a year ago.
For the nine months ended Sept. 30, Geomaque lost $1.3 million (3 cents per share) on $15.9 million, compared with a loss of $212,000 on $14.7 million in the year-ago period.
Production at the San Francisco mine is up 18% year-over-year and costs, down 3%. The mine cranked out 14,027 oz. during the recent quarter at a cash cost of US$279 per oz., bringing 9-month output to a record 50,859 oz. at US$256 per oz.
In total, 2.2 million tonnes grading 1.1 grams gold per tonne were crushed and placed on the leach pad. Reserves at the beginning of the year stood at 18.7 million tonnes grading 1.03 grams gold, with stripping ratios forecast at 3.2-to-1.
Geomaque now expects to have produced 65,000-70,000 oz. by year-end. Mechanical problems experienced in the primary crusher have been solved, and throughput met budget in October and November.
Drilling continues to delineate the Chicharra deposit just west of the mine, where stepout drilling earlier this year intersected up to 3.7 grams over 31.5 metres. Having been permitted for mining, the deposit is expected to be incorporated into reserves shortly.
Meanwhile, development continues at the Vueltas del Rio heap-leach gold project in Honduras, where reserves stand at 5.1 million tonnes grading 2.51 grams gold. Production is slated to begin in March, with 40,000 oz. expected by year-end. Life-of-mine annual output is expected to average 60,000 oz., with cash costs pegged at US$169 per oz.
During the quarter, 71 pits dug immediately south of the San Roberto zone added a strip of oxide mineralization measuring 700 metres long and 30 metres wide. The pits were dug no more than 5 metres deep, with the highest grade encountered being 9.41 grams over 4 metres, followed by 27.12 grams over 1 metre.
Oxide mineralization at San Roberto is flat-lying, and thus, its stripping ratio is expected to be low. The newly discovered zone, though is excluded from reserves, is nonetheless expected to have similar recovery rates (88%), owing to its similar characteristics.
Also, exploration continues at the South zone, 200 metres south of the main deposit. Prospecting, trenching and drilling have outlined that zone over a strike length of 1.5 km, trending southwesterly towards the El Zapotal gold-zinc prospect.
On Sept. 30, Geomaque had $6.2 million in working capital, excluding $3.1 million subsequently gained from a rights offering. Proceeds from the offering are earmarked for Vueltas del Rio.
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