Low gold prices take toll on Glamis

Low gold prices caused Glamis Gold (GLG-N) to rack up a US$2.7-million loss in the recent second quarter (or 3 cents per share), compared with a loss of US$131,000 (nil per share) in the corresponding period of 1998.

The Reno, Nev.-based company nonetheless retains a strong financial position, having pulled in US$14.8 million in revenues during the quarter, mostly as a result of its merger with Rayrock Resources.

Cash operating costs at Glamis’s five gold mines averaged US$223 per oz., while the company realized a gold price of US$267 per oz.

The Rand mine in California showed the greatest improvement, with second-quarter cash costs falling to US$236, compared with US$256 in the first quarter. However, the 15,375 oz. produced during the second quarter of 1999 represents a 30% decline from year-ago levels.

At the Marigold mine in central Nevada, Glamis’s 67% share of production amounted to 9,628 oz. at US$256 per oz. in the recent quarter. However, production was lower than a year ago, owing to lower ore grades.

At the Dee mine, in Nevada’s Carlin trend, minor production from the new decline began, though production from the open-pit amounted to 10,441 oz. at US$241 per oz. Glamis expects full-scale production from underground by the fourth quarter.

The Daisy mine in southern Nevada poured 7,353 oz. at US$212 per oz. during the 3-month period, while, at the Picacho mine in California, a shutdown caused gold production to drop to 1,462 oz.

In all, Glamis racked up 44,451 oz. gold during the second quarter.

At the Ivan copper mine in Chile, operators boosted the daily mining rate at the Zar-Catalina open pit to 13,000 tonnes. Production climbed 65% between the first and second quarters, reaching 2,530 tonnes.

In Central America, Glamis expects to make a production decision on the San Martin gold project in Honduras in late 1999 or early 2000.

Glamis has US$37.4 million in working capital, including US$31.7 million in cash.