Sale of shares boosts earnings for CoCa Mines

The sale of shares in a major silver producer boosted first-half earnings of CoCa Mines to $1.76 million(US). This figure compares to an $858,000 loss a year earlier. CoCa has an 8% interest in Equity Silver Mines and its shareholding had a market value of $19.1 million as of Aug 6.

The capital was used to strengthen CoCa’s financial position, Hugh Matheson, president, said in an interim report. Another $1.7 million was invested in its gold and silver properties, the company’s $1.4-million bank debt was retired, and working capital was increased by $1 million, he added.

The Cactus Gold Mines project in California yielded 16,400 oz gold during the first half. Sales totalled $7 million and a gross operating profit of $2 million was earned after charges for depreciation, depletion, and exploration. CoCa expects to complete payout to its funding partner during the third quarter of 1987 which would be 11 months after production began. The company’s share of earnings and cash flow from the heap leach operation will then increase from 32.7% to 52.5%.

Wright Engineers has completed a feasibility study for the Shumake Pit at the Cactus operation. Mineable reserves have been increased to 5.3 million tons grading 0.04 oz gold and 0.4 oz silver and development work should begin later this year. Output is expected to average 30,000 oz annually into 1994, said Mr Matheson. The cost of constructing heap leach facilities will be approximately $9.1 million, including $1.4 million for preproduction stripping.