Losses begin shrinking at Campbell

The first nine months of 1998 have seen an improved financial picture for gold producer Campbell Resources (CCH-T), as falling expenses offset decreased revenues from gold production.

In the three months ended Sept. 30, Campbell posted a loss of $3.2 million (2.1 cents per share) after a one-time writedown of $2.1 million on the sale of surplus equipment from its Santa Gertrudis mine in Sonora state, Mexico. Revenue for the same period was $8.8 million. In the corresponding period of 1997, Campbell lost $3.4 million on revenue of $13 million.

Over the nine months ended Sept. 30, Campbell lost $6.9 million (5.2 cents per share) on revenue of $28.3 million. Over the first nine months of 1997, the company lost $7.9 million from a top line of $38.8 million.

The lower gold price depressed 1998 revenue, as did declining production from Santa Gertrudis, where active mining was suspended in December of last year. Gold is still being recovered from the leach pads at Santa Gertrudis, an operation that the company expects to wind up near the end of the year.

Campbell’s Joe Mann mine, south of Chibougamau, Que., has produced just over 53,000 oz. gold so far this year, slightly higher than in the corresponding period in 1997. Grades declined to 0.26 from 0.3 oz. per ton, but increased mill throughput and better recovery rates maintained production rates.

The Joe Mann shaft has been deepened to 3,700 ft., with some minor work still to be done, but development of the deep levels of the mine has been delayed in the hope that the price of gold may improve. Still, the company has accelerated development of the levels immediately below the existing workings (2,350 ft.) to provide feed for the years 1999 and 2000.

Mine plans for the lower levels are now being examined, and the company expects to reach a decision on development of the deep mineralization at Joe Mann in the early part of 1999.

A number of areas in and around the Santa Gertrudis property are being explored, including targets around the operation’s mined-out pits, several geochemical targets south and southeast of the mine area, and a property adjoining Santa Getrudis held by a bankrupt Mexican firm, Minera Roca Roja. Roca Roja’s bankruptcy trustee is permitting continued exploration on the property while legal proceedings are under way, and Campbell has identified seven targets on the property through soil sampling, mapping and trenching.

Drill targets in the Greta area, southeast of the mine area on Campbell’s own property, were tested during the third quarter, and mineralization is still being outlined on two zones, Tracy North and Tracy East.