Montanna tunnels produce gold profits for Pegasus

With its Montana Tunnels project now fully operational, Pegasus Gold (NASDAQ) reported record net earnings for the second quarter of $7 million or 30 cents per share. Those earnings were 63% higher than the $4.3 million or 22 cents per share earned last year, the company noted.

Six-month earnings of $8.7 million or 37 cents per share were also a record and compared with $4 million or 22 cents a year earlier. Gold production in the second quarter totaled 87,225 oz, a 42% increase over 1987, and the 330,601 oz of silver produced represented a 219% increase. In the first half, 130,450 oz of gold were produced and 586,318 oz silver along with significant amounts of zinc and lead from Montana Tunnels.

In the two-month period ended July 15, Montana Tunnels generated 13,790 oz gold at an average mill throughput of 11,778 tons-per- day. Cash cost of gold production was less than $100 per oz when byproduct credits are included, noted Pegasus.

Pegasus, which operates four precious metals mines in the western United States and is developing a fifth, expects to produce 270,000 oz gold, 1.5 million oz silver, 18,000 tons of zinc and 7,000 tons of lead in 1988.