Golden Knight posts $56.1-Million loss for 1996

The $58.8-Million writedown of its 40% carried interest in the Casa Berardi joint venture resulted in a loss of $56.1 million for Golden Knight Resources (GKR-T) in 1996.

The loss is considerably greater than in the previous year, when the company was $4.5 million in the red. Revenue in 1996 amounted to $20 million, compared with $13.1 million in 1995.

The company’s decision to write down its interest in the Quebec joint venture was “due to recent ground problems in the East mine and [to] the earlier suspension of operations.”

In January, it was announced that mining and milling at Casa Berardi would be suspended within three months unless a buyer could be found (T.N.M., Jan.

13/97).

As a result of the suspension, Golden Knight has been served with a notice of overdue cash payments by operator TVX Gold (TVX-T), which owns a 60% interest in the mine.

The amount owed, which neither company would reveal, represents Golden Knight’s share of joint-Venture costs since Jan. 1, according to a spokesman for Golden Knight.

In a statement, Golden Knight says it told TVX it would not pay, and noted “there are certain remedies available to TVX” under the joint-Venture agreement. The spokesman declined to give further details.

Last year, Golden Knight’s share of gold production at Casa Berardi was 30,416 oz., compared with 24,472 oz. in 1995. The cash operating cost per ounce in 1996 was US$360, compared with US$442 in the previous year.