Rayrock companies show losses for half-year (September 04, 1995)

Six-month losses have been reported for Rayrock Yellowknife Resources (TSE) and subsidiary Minera Rayrock (TSE).

The former reported a loss of US$907,000 for the first half of 1995, compared with earnings of US$7.5 million for the same period in 1994. Minera Rayrock, the group’s Latin American arm, lost US$1.4 million versus US$913,000 in the first half of 1994.

Lower revenues from gold production and higher expenses at Rayrock’s Nevada gold mines (Pinson, Dee, and Marigold) accounted for most of the change in Rayrock’s earnings. Its mineral-fertilizer unit, Western Ag-Minerals, had steady results. The Ivan mine in Chile has been in commercial production since the beginning of the year, during which time it provided an operating profit of US$2.8 million (despite some teething troubles reported in the first quarter). However, depreciation and interest swallowed Minera Rayrock’s operating profit on Ivan.

Underground drilling at Ivan detected strike extensions to the deposit, and surface exploration in the immediate area discovered a new zone, known as the Zarina, where four drill holes cut mineralization of the same type. The best result was a 48-metre intersection grading 1.36% copper, including a 17-metre interval with 2.68%.

At Rayrock’s Dee mine in Elko Cty., Nev., drilling has tested the depth extensions of the deposit below the existing open pit, though results have not yet been released. Other Nevada prospects are being investigated, including the Dry Canyon property where geophysical and geochemical surveys are under way.

The Daisy gold project in Nye Cty., Nev., is at the final feasibility stage, with a minable reserve of 11.4 million tons grading 0.018 oz. gold per ton. Rayrock operates and holds a 25% interest in Daisy.

Minera Rayrock continues delineation drilling on the Sierra Valenzuela copper project, 40 km northeast of the Ivan mine. At its Bellavista gold-silver project, 110 km northwest of San Jose, Costa Rica, a final feasibility study continues and an environmental impact statement should be submitted to the Costa Rican government in September.

The two companies, in joint venture, have taken an option on a 120-sq.-km property 80 km southwest of Panama City, Panama, where there are several gold showings. They can acquire the deposit by conducting at least US$1 million in exploration work and paying US$430,000 over three years. The vendor, a private Panamanian company, retains a 3% net smelter return.