Placer posts US$148-million Q3 profit

Vancouver – It gold mines on track for 2004 operational targets, Placer Dome (PDG-T) saw third quarter earnings of US$148-million, or 36 per share, up substantially from the US$27 reported in the corresponding quarter of 2003.

Despite a drop in third quarter gold production to 888,000 ounces, from 1,014,000 ounces in 2003, the company enjoyed significant tax gains in Ontario and Australia that contributed strongly to its Q3 profit figure.

Placer Dome’s mine operating earnings of US$109-million was off slightly from the US$113-million reported in the third quarter of 2003. Earnings were impacted by a drop in gold division production and sales, despite the major gains in copper earnings realized from higher metal prices.

Along with the drop in output, the company saw gold cash production costs, for the period, of US$235 an ounce, compared to US$217 in the previous year. Placer’s realized price for its bullion sold was US$382 per ounce over the quarter, slightly below last year’s comparative quarter price of US$392 and this year’s average-to-date of US$389 an ounce.

Copper performed well for the Vancouver-based gold company over the quarter, with 101 million pounds produced from operations at a cash production cost of 56 per pound, comparable to the 52 per pound seen last year. Placer Dome realized US$1.16 per pound for its copper sales, up substantially from the 81 per pound seen in 2003.

Gold production for the year-to-date sits at 2.725 million ounces, off 3% from the previous year’s tally. The drop in output is attributed to the temporary closure of the Golden Sunlight mine, closure of the Misima mine, increased stripping operation at Bald Mountain, as well as reduced production from Kalgoorlie West and Granny Smith in Australia. Meanwhile, copper production this year is at 319 million pounds, up 2% from 2003, with the boost attributable to Zaldivar and Osborne mine output increases.

In this year’s third quarter, a favourable ruling from the Ontario Court of Appeal gave Placer an after-tax gain of US$76-million through the reversal of a previously accrued tax and interest liability for mining taxes in that province. The company also recently realized a US$37-million non-cash tax gain for previously unrecorded Australian tax benefits.

At the end of the third quarter, Placer announced its effort to finance the Cerro Casale gold-copper project in Chile. Under an agreement, it is required to arrange the US$1.3-billion to develop the operation. The company has also recently commenced a feasibility study on the much focused Cortez Hills gold project in Battle Mountain trend of north-central Nevada, and is expected to make a decision by year-end on possible advancement of other properties including its Mount Milligan copper-gold project in north-central British Columbia.