Piedmont chalks up loss due to lower gold price

A drop in gold prices as well as a decrease in ore grade pushed Piedmont Mining (NASDAQ) into a US$394,000 loss for the first quarter ended March 31.

Piedmont reported net income of US$406,000 in the first quarter of 1990.

The company produced a total of 3,316 oz. gold during the quarter at its Haile heap leach gold mine in South Carolina. The mine processed and stacked 116,900 tons during the period at an average grade of 0.031 oz. gold per ton. This compares with 98,368 tons grading 0.074 oz. gold during the first quarter of 1990.

The average price received for first-quarter production was US$370 per oz. compared with US$403 per oz. in the year-earlier period.

Earlier this year, Piedmont signed an option and earn-in agreement with Amax Gold (NYSE). Amax can earn a 62.5% interest in the Haile mine by paying Piedmont US$1.75 million in cash and issuing the company one million shares of Amax common stock by May 1, 1992.

Amax is funding all exploration costs on the project until the earn-in and covering certain property holding costs and reclamation bonding requirements. Amax will also fund a preliminary feasibility on the property before exercising the option.

The companies are now drilling on the property with 15 holes completed to date to depths averaging 400-500 ft. Piedmont said drilling will continue through the summer with the current drilling rate equivalent to about 12,000 ft. per month.