Selling part of an Australian subsidiary boosted Placer Development’s net earnings to $113.7 million for the period ended Sept 30. The sale of a 21.4% interest in Placer Pacific, which represented a net gain of $90.1 million for the company, was the most important factor in the earnings improvement,” according to President John Walton. Earnings for the comparable period last year were $20.5 million or 47 cents per share compared to $2.63 per share this time. Mr Walton said the contribution by Kidston and other gold mines was assisted by higher prices and sales volumes.”
As of Sept 30, Placer and its subsidiaries had committed to sell forward 389,000 oz gold at an average price of $386(US) over a period of 17 months and 700,000 oz silver at an average of $5.78(US) over a 2-month period.
Mr Walton said earnings were adversely affected by lower oil and gas prices which were partially offset by increased oil production in Canada and a reduct ion in the petroleum and gas revenue tax. In the U.S., higher sales volumes for oil and gas helped offset the lower prices. The deregulation of gas in Canada Nov 1 should lead to lower prices in the short term but he said it was difficult to predict what would happen in the medium or long term.
Subsidiary Gibraltar Mines posted a 9-month loss and Placer’s share of that was almost $2.5 million. Harder and lower grade ore were the main reasons for the loss, he said. Gibraltar’s $14-million solvent extraction plant produced its first metallic copper on Oct 7 and is expected to generate an additional 10 million lb of low cost copper each year. The Endako molybdenum mine started production at one-third capacity in early August.
Mr Walton said substantial progress has been made on preparation of a feasibility study for the Misima gold property in Papua New Guinea. Negotiations are continuing with the government there on a mine development agreement which must be completed to finalize the feasibility.
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