Meridian loses $8.2m

Analyst darling Meridian Gold (MNG-T) lost US$8.2 million (or 11 cents per share) in the third quarter as production and gold prices dropped and costs edged up.

The company cranked out 52,620 oz. at a cash cost of US$199 per oz., compared with 56,415 oz. at US$194 in the third quarter of 1997, when losses totalled US$46.9 million. The average realized gold price between the two periods dropped to US$285 from $323 per oz. between the two periods.

However, Meridian is expected to meet or exceed its 1998 projection of 200,000 oz. gold produced at an average cash cost of US$215 per oz. from its Beartrack and Jerritt Canyon mines in the U.S.

Exploration spending was US$4 million, compared with US$9.9 million in the third quarter of 1997.

Most of the funds were spent on the El Penon gold-silver property in Chile, where underground development work is under way. The company is currently trying to secure debt financing for next year’s program. Merdian has extended by 300 metres the newly discovred, high-grade Quebrada Colorada zone at El Penon. The structure now measures 1.4 km and remains open along strike.