Higher gold prices combined with lower exploration and accounting expenses to keep
Net earnings topped US$3.5 million (or 2 per share) on revenue of US$19 million in the three months ended Sept. 30, compared with US$2.4 million (2 per share) on US$19.8 million in the corresponding period of 2002. Exploration and accounting charges were a third less than a year earlier.
Glamis sold 51,110 oz. in the recent period, or 10,952 oz. less than in the third quarter of 2002. Offsetting the shortfall was a 17% increase in realized gold prices, to US$371 from US$318 per oz.
Cash flow remained steady at US$7.5 million, though changes to non-cash working capital knocked US$600,000 off the amount.
Three mines — San Martin in Honduras, Marigold in Nevada, and Rand in California — produced a total of 51,707 oz. at an average cash cost of US$201 per oz. Output was down by 7,290 oz. and costs were up by US$26 per oz., compared with the year-earlier quarter, reflecting leaching problems at San Martin (which have since been rectified).
San Martin poured only 20,344 oz. at a cash cost of US$211 per oz., and by year-end it is expected to have produced 105,000 oz., or 20,000 oz. less than anticipated at the start of 2003.
Marigold, on the other hand, had a stellar quarter, contributing a record 25,270 oz. at a cost of US$173 per oz. Production has been steadily rising since the final months of 2002, when the mine began to be expanded.
Glamis and partner
Results from recent drilling in the Section 7 area suggest that even higher production rates are possible. Crews are focusing on the newly discovered TZN zone, where they have intersected deep but oxidized material above the water table.
Results from a US$1-million program of infill and delineation drilling will be incorporated into a scoping study. Although the study is not scheduled for completion until later in the year, Glamis predicts that the zone’s inclusion will support annual production of more than 200,000 oz.
Glamis holds a 66.7% stake in Marigold.
Residual production at the Rand mine totalled 6,093 oz. in the recent quarter at a cost of US$285 per oz. That’s less than half the amount produced a year earlier, owing to the cessation of mining some months ago. Leaching will continue to the end of 2005.
Meanwhile, Glamis remains on budget and schedule at its El Sauzal development project in Mexico. The open-pit mine is slated to pour its first gold by the end of 2004. Annual production at El Sauzal is pegged at 190,000 oz. over 10 years, based on a daily milling rate of 5,500 tonnes.
Infill drilling and optimization studies continue at the Marlin project, and an updated feasibility study will be tabled shortly.
Marlin is expected to contribute 200,000 oz. to Glamis’s annual production at less than US$100 per oz., net of silver credits. Both open-pit and underground mining will be employed.
Glamis is awaiting receipt of an exploitation licence, having had its environmental impact assessment approved.
For all of 2003, Glamis expects to produce 235,000 oz. at a cost of US$175-185 per oz. By presstime, it had produced 173,582 oz. at US$180 per oz. (US$259 when depreciation and amortization charges are included).
At Sept. 30, Glamis had US$170.7 million in current assets and US$9.8 million in current liabilities for a working capital of US$161 million.
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