Nelson mired in red ink

Despite higher production and lower costs, Nelson Gold (NLG-T) reported a net loss of US$421,000 on revenue of US$3.4 million for the three months ended June 30.

In the comparable period of 1999, the company incurred a loss of US$674,000 on revenue of US$3.3 million.

At the Jilau gold mine, in Tajikistan, 435,354 tonnes grading 1.74 grams per tonne were processed in the recent quarter. Both the volume and grade were higher than budgeted. Mill throughput in the current (third) quarter is expected to drop, owing to maintenance of the carbon-in-leach tanks. Cash operating costs averaged US$208 per oz. in the second quarter — an improvement over the US$239 recorded a year ago, when 481,762 tonnes grading 1.56% gold were treated.

Nelson owns a 44% interest in Zeravshan Gold Mining, which owns the Jilau mine, as well as the nearby Taror and Chore deposits. The remaining stake in Zeravshan is divided between the Tajikistani government, with 51%, and International Finance Corp, with 5%.

Nelson’s losses for the first six months of 2000 totalled US$1.1 million (or 1 per share) on revenue of US$6.1 million, compared with a loss of US$803,000 (1 per share) on $7 million in the first half of last year. The company attributes the difference to a reduction of income from the joint venture.