Record earnings, despite a decrease in gold sales, pushed Meridian Gold‘s (MNG-T, MDG-N) shares up nearly 3%.
In Toronto on July 25 the Reno-based company was up 84 to $32.10 on roughly 450,000 shares traded.
The company set record quarterly net earnings of US$18.8 million, or 19 per share and set a record operating cash flow of US$25.1 million for the quarter.
In a release, Meridian’s president and chief executive, Brian Kennedy, credited high gold and silver prices for the record earnings and cash flows.
The higher prices compensated for a decrease in gold ounces sold.
Gold sales were down by 24% compared with the previous year’s quarter due to a 23% decrease in gold grade to 8.5 grams per tonne from 11 grams per tonne in the second quarter of 2005.
But a higher realized price US$629 per oz, compared with US$425 per ounce for the same period a year earlier helped the company reach a total revenue of US$57.3 million. That represents a 40% increase or US$16.4 million over second quarter revenue for 2005.
The company also increased cash investment balances to US$330 million, including cash, restricted cash, and short and long term investments.
On the mining side of the things, Meridian made two new high-grade vein discoveries for the quarter within its El Penon camp in northern Chile.
Highlights include 4 metres at a depth of 290 to 294 metres grading 16.23 grams gold per tonne, and 831.1 grams silver; and 4 metres at a depth of 333 to 337 metres grading 46.91 grams gold per tonne and 533.3 grams silver.
Gold production at El Penon was at 57,800 oz. at a cash cost of negative $124 per oz. as credits from its 1.8 million oz. of silver cut into costs.
The company says, on a gold equivalent basis, it produced 92,400 oz. at a cash cost of $155 per oz.
Meridian wasn’t quiet on the M&A side either for the quarter, as it acquired Minera Florida in Chile, effective July 1 and expanded the two new discoveries at the project. The acquisition gives the company two operating mines in Chile.
Kennedy also says the company is expanding plant capacity at El Penon.
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