Higher revenues were somewhat offset by higher cash operating costs and lower total gold production for Pegasus Gold (TSE) during recent months.
For the third quarter, Pegasus earned US$832,000 on revenues of US$66.1 million, compared with US$381,000 on US$59.1 million over the same period in 1993.
For the 9-month period, the gold producer posted a loss of US$58 million on revenues of US$167.1 million, compared with earnings of US$4.5 million on US$153.1 million over the same period last year. The loss reflects non-recurring and non-cash charges of US$52.9 million.
Higher revenues for both 3-month and 9-month periods were the result of the increased average realized gold price. In the third quarter of 1994, the price was US$422 per oz., compared with US$376 per oz. in 1993. Over the 9-month period, the price was US$406 per oz., compared with US$381 per oz. in the corresponding period last year.
Cash operating costs were also up, having risen US$20 between the third quarters of 1993 and 1994, and US$28 between the 9-month periods. The rise was due to four factors: a higher stripping ratio at the Zortman mine in Montana; higher processing costs at the Beal Mountain mine in the same state; slower recoveries at the Florida Canyon mine in Nevada and the Black Pine mine in Idaho; and crusher difficulties at the Mt. Todd mine in northern Australia.
Earnings were also affected by increased exploration expenditures. The company spent US$5.2 million searching for deposits over the third quarter and US$13.4 in the recent 9-month period, compared with US$3.1 million and US$7.1 million, respectively, in the corresponding 1993 periods. These higher expenditures reflect the company’s increasingly international focus. Total gold production dropped slightly during the quarter from 127,925 oz. in 1993, compared with 127,060 in 1994 quarter. A more significant drop was observed over the 9-month period, to 318,733 oz. in 1994 from 325,860 oz. last year.
The company experienced lower silver production but a higher output of zinc and lead.
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