U.S. REPORT Low silver prices bring Callahan loss

Low silver prices are continuing to hurt Callahan Mining (TSE), with both its Galena and Coeur mines in Idaho operating at a loss. The company reported a loss of US$2.5 million for the year ended Dec. 31, compared with a loss of US$13.2 million in 1989.

The 1989 loss included a writedown of US$8.5 million on the company’s Ropes mine in Michigan after that operation was shut down indefinitely because of severe ground problems and low gold prices.

Consolidated silver revenues dropped to US$563,000 from US$673,000 in 1989, largely as a result of a drop in silver prices to US$4.52 per oz. from an average of US$5.33 per oz. in the previous year.

Callahan received US$87,000 in revenue from the Galena mine as a result of minimum royalty payments of US50 cents per ton of ore milled. The mine is leased to Asarco (NYSE) which must cover Callahan’s 50% share of operating losses. Asarco has the right to recover US$2.05 million from Callahan’s share of any future operating profits.

Callahan’s manufacturing subsidiary reported pretax income of US$1.06 million, down slightly from the US$1.24 million reported in 1989. Manufacturing revenues were US$11.3 million in 1990, compared with US$11.9 million in 1989. Callahan Mining (SSE)* 12 months ended Dec. 31 1990 1989 Revenue $13,841 $28,006 Net earnings (loss) (2,451) (13,251)

per share (0.32) (1.73)