Higher gold output boosts Corona earnings in 1989

Earnings of $49.1 million (32cents per share) for 1989 before unusual and extraordinary items were reported by Corona (TSE), compared with restated earnings, before unusual and extraordinary items, of $36.6 million (26cents per share) for the previous year. The company attributes the hike in earnings mainly to a 34% increase in gold production to 680,986 oz. from 507,942 oz. in 1988. The company’s production cost last year averaged US$209 per oz.

Earnings in 1989 after unusual and extraordinary items (including a writedown on the Nickel Plate mine) were $12.7 million (6cents per share), compared with $70.4 million (58cents per share) in 1988. Revenues in 1989 totalled $318.2 million, compared with $257 million the previous year.

Operating cash flow at the end of 1989 stood at $133.4 million, compared with $110.3 million at the end of 1988.

Corona has written down the carrying value of its troubled Nickel Plate gold mine in British Columbia by $53.2 million to nil to reflect what it says is the marginal nature of the mine’s ore grades at current gold prices. Last year the company wrote down the carrying value of the mine by $108 million (to $51 million).

Operating costs at Nickel Plate have been reduced dramatically and during the last quarter of 1989 the mine recorded an operating profit of $1.4 million, the company says. Corona estimates output this year from Nickel Plate of 81,000 oz.

A recent offering of shares and warrants raised about $92.8 million for the company. The proceeds were used to reduce debt, which currently stands at $305 million. The financing leaves the company with A and B shares outstanding in the amount of 150.3 million.

Meanwhile, Corona recently acquired an additional 2,972,690 shares of Dolphin Explorations (TSE), raising the senior’s interest in Dolphin to about 48.6%, or about 60.6% on a fully diluted basis. Corona (TSE) Year ended Dec. 31 1989 1988 Revenue (000s) $318,200 $257,000 Net earnings (000s) 12,700 70,400 Net earnings (per share) 0.06 0.58004