Glamis on track to reach targets

With gold production of over 35,000 oz. for the first six months of fiscal 1992, Glamis Gold (TSE) is well on the way to meeting output projections of 75,000 oz. for its 1992 fiscal year.

Second-quarter production for the period ended Dec. 31, totalled 17,509 oz., up 56% from the 11,213 oz. produced in the same period last year. Despite the increase in production, earnings for the six months and second quarter were down from the same period a year earlier.

Glamis reported net earnings of $1.1 million for the 6-month period, and $528,000 for the second quarter ended Dec. 31. This compares with earnings of $1.9 million in the first six months of fiscal 1991 and $892,000 for the second quarter.

The company notes that a drop in average realized price of gold to US$382 per oz. in the second quarter from US$413 a year earlier was a major factor in drop in profitability.

Cash cost of production during the second quarter averaged US$180 per oz. while total production costs were US$255 per oz. This compares with cash costs of US$189 per oz. in the second quarter of fiscal 1991 and total production costs of US$260 per oz.

Operating cash flow for the 6-month period totalled $4.6 million or about 27 cents per share and about $2.1 million for the second quarter. Glamis notes that expansion plans are on schedule to produce 100,000 oz. gold during fiscal 1993. The company started construction of the Site No. 5 heap leach pads at the Picacho mine in southern California in December and final permits were received in January.

The company has also received permits for the expansion of the Yellow Aster leach pad in central California and permits for the nearby Baltic mine are expected by July, 1992.

Glamis’ future production profile will likely receive a further boost from its Imperial Cty. gold project in southeastern California.

The project is a joint venture, 65% owned by Glamis and 35% owned by Arizona Star Resource (VSE).

A prefeasibility study has started on the project as a result of continued positive drilling results.

Minable reserves at the Indian Rose were last stated at 5.1 million tons grading 0.023 oz. gold per ton with a strip ratio of 2.7-to-1. Prior to the start of the current 25,000-ft. drilling program, preliminary estimates of reserves on the Ocotillo deposit were 7.5 million tons grading 0.028 oz. gold with a strip ratio of about 4-to-1.

Infill drilling on the Ocotillo deposit returned a 120-ft. intersection grading 0.12 oz. gold in Hole 0-60 at the southeast end of the deposit. A hole 200 ft. south of 0-60 intersected similar zone of mineralization, returning a 170-ft. intersection grading 0.031 oz. gold. The deposit remains open to the south.