Hemlo Gold lowers operating cost, increases production in

Gold production in 1992 increased to 492,000 oz. at an average cash operating cost of US$125 per oz., compared with 469,000 oz. in 1991 at US$133 per oz., Hemlo Gold Mines (TSE) reports.

Gold output from the Golden Giant mine in the Hemlo camp of northwestern Ontario was 451,000 oz., up 8,000 oz. The company attributes the increase to higher average head grades.

The company’s 55% share of production from the Silidor mine just outside Rouyn-Noranda, Que., increased to 41,000 oz., compared with 26,000 oz. in 1991, reflecting a full year’s ownership compared with only eight months in 1991.

The company says that earnings for 1992 increased to $41.9 million (43 cents per share) compared with earnings of $13.7 million (15 cents per share) in 1991. The company says the operating results were its best since 1988. The company’s 1991 earnings were adversely affected by after-tax charges of $28.2 million relating to investment losses and writedowns.

The reduction in Hemlo Gold’s unit operating costs was mainly attributable to the weaker Canadian dollar. The company’s average realized price, including hedging, was US$359 per oz., down 7% from the previous year. During 1992, capital expenditures were $14.8 million, including $7.7 million at the New World project (60% indirect interest) in Montana and $1.6 million at the Holloway project (58% direct and indirect interest) east of Timmins, Ont.

At the New World project, the principal activity during the fourth quarter was the permitting process. The company says activity is proceeding well and it anticipates that the “operating permit application” will be accepted by the end of the first quarter of 1993, when work will commence on the “environmental impact statement,” which is expected to take at least 12 months to complete.

The $12-million Holloway underground validation program, designed to confirm the deposit’s viability, should be completed in the fourth quarter of this year.