Lower metal prices cut FMC earnings

FMC Gold, which last year ranked first in North America in terms of return on investment, said it realized an average of $369(US) per oz for its third-quarter gold sales, compared with $427 per oz during the third quarter of 1988.

As a result, net income of $11.6 million or 17 cents per share for the three months ended Sept 30 was down significantly from the $17.6 million or 27 cents per share reported in last year’s third quarter.

Third-quarter sales were also down substantially to $38.4 million from the $47.1 million reported in 1988.

FMC, which has interests in three gold and one silver mines, sold 85,000 oz gold and 1.5 million oz silver during the quarter, compared with 91,000 oz gold and 1.3 million oz silver at the same time last year.

Due to an increased net proceeds tax in Nevada and start-up costs at FMC’s 30% owned Jerritt Canyon, Nev., mine, third-quarter production increased to $131 per gold equivalent oz from $114 last year.

For the nine months ended Sept 30, net income was $39 million or 59 cents per share, compared with $46 million or 70 cents per share a year ago, FMC says. “These results reflect a 14% decline in the price of gold to $379 per oz, compared with $442 per oz last year; and a 15% decline in silver prices, compared with 1988 levels,” the company said.

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