Northgate group results mixed as Colomac gold pour awaited

As it waits for the first gold pour at the potentially huge Colomac gold project in the Northwest Territories, Northgate Exploration (TSE) and its group of affiliates reported some mixed first-quarter results. Northgate’s net income of $3.3 million, or 15 cents a share, in the three months ended March 31 was down substantially from $7 million or 31 cents a share during the same period last year. By contrast, the acquisition last year of a 35% stake in a Chilean gold mine from Westfield Minerals (TSE) drove the company’s first- quarter revenues up to $10.5 million from $3.9 million in the equivalent 1989 quarter.

However, analysts are still waiting for Northgate’s 50% owned affiliate ABM Gold (AMEX) to bring the 200,000-oz.-per-year project into production before drawing any conclusions regarding the group’s financial results. The first gold pour is expected by the end of this month. After full production is achieved in September, Northgate may consolidate the mine on to its balance sheet by acquiring 100% of ABM.

For the moment, Northgate is still regarded as a holding company with interests in a handful of companies including ABM, Campbell Resources (TSE), and Sonora Gold (TSE).

ABM reported a first-quarter net loss of $446,000, or 1 cents per share, compared with net income of $1.5 million or 11 cents per share during the same period last year. The earnings decline was attributed to lower investment income due to a reduction in the company’s cash position and to higher general and administrative expenses relating to Colomac. First-quarter revenues also dropped to $1.2 million from $1.9 million in 1989.

ABM holds a 42% stake in Sonora Gold which in turn has a 70% stake in the Jamestown gold mine in California. First-quarter production at Jamestown dropped to 27,800 oz. at a cost of US$276 per oz. from 30,100 oz. at a cost of US$247 per oz. in the first quarter of 1989.

“Higher unit costs were directly attributable to lower gold production which was a function of lower grades in the north part of the Harvard pit where a large percentage of ore is currently being mined,” the company said.

Sonora reported a loss of $822,000, or 4 cents per share, on revenues of $9.4 million in the three months ended March 31, compared with net income of $1.7 million, or 8 cents a share, on revenues of $10.3 million in the equivalent 1989 quarter.

Meanwhile, due to higher gold production and higher income from an asbestos operation, Campbell Resources managed to report slightly higher first-quarter net income despite a reduction in gold prices.

The 27% owned (fully diluted) Northgate affiliate had first-quarter net income of $801,000, or 1 cents per share, compared with $666,000 or 1 cents per share during the same period last year. Campbell produced a record 18,240 oz. gold and 707,000 lb. copper at its three Chibougamau, Que., mines in the 3-month period, compared with 17,000 oz. gold and 956,000 lb. copper in the same period last year.

As a result, first-quarter revenues were up slightly to $12.4 million from $11.7 million in the 1989 quarter.

Campbell attributed the production increase to its Joe Mann gold copper mine where higher output more than offset any production decline’s at the S-3 mine. Due to high operating costs, the Cedar Bay mine is expected to be placed on care and maintenance by June 15. It produced 2,000 oz. gold in the first quarter of 1990 at a cost of US$400 per oz. Northgate Exploration (TSE) $000s except per-share items* Quarter ended March 31 1990 1989 Revenue $10,472 $3,995 Net earnings 3,310 6,961

per share 0.15 0.31004 Campbell Resources (TSE) $000s except per-share items* Quarter ended Mar. 31 1990 1989 Revenue $12,415 $11,789 Net earnings 801 666

per share 0.01 0.01004 Sonora Gold (TSE) $000s except per-share items* Quarter ended Mar. 31 1990 1989 Revenue $9,385 $10,389 Net earnings (loss) 822 (1,661 )

per share 0.04 (0.08 )004 ABM Gold (AMEX) $000s except per-share items* Quarter ended Mar. 31 1990 1989 Revenue $1,259 $1,954 Net earnings (loss) (446 ) 1,514

per share (0.01 ) 0.1104