While others struggle Corona doubles earnings

At a time when high interest rates and the strong Canadian dollar are sending corporate profits on a downhill slide, Corona (TSE) has managed to buck the trend, doubling its first-quarter earnings to $10.5 million (7 cents per share) from $4.4 million (3 cents per share) in 1989. The increase reflects record gold and gold-equivalent production of 193.2 million oz. from Corona’s 10 North American mines. At an average operating cost of US$192 per oz. of gold, 19% less than for the first quarter of 1989, Corona has become the lowest-cost gold producer in North America, according to President Peter Steen.

Much of this success can be attributed to Corona’s 50% interest in the Williams and David Bell mines in Ontario, which together account for more than 60% of Corona’s production. Costs of production at these two Hemlo mines are down to $198 and $88 per oz. respectively for the quarter.

Corona has also improved its balance sheet, reducing its debt-to- equity ratio to 0.9-to-1 as of March 31 from 1.54-to-1 at the end of 1989. Analysts say that with a lower debt burden, Corona is in a better position to make worthwhile acquisitions.

Through the recent merger of Prime Resources Group (VSE) and Stikine Resources (TSE), Corona has also taken control of “perhaps the most exciting gold deposit in North America today,” said Steen at the company’s annual meeting.

The Eskay Creek project will add more than 200,000 oz. to Corona’s annual gold production, estimates Steen. Reserves on the rich deposit are based on a cutoff grade of 0.25 oz. per ton, higher than the grade currently being mined at Canada’s largest gold producer, the Williams mine, noted Chairman Ned Goodman.

In gratitude to six people who helped Corona win the court battle for the Williams mine, Corona has awarded the group a 1% smelter return royalty from Williams. The return is expected to bring in approximately $2 million per year for the group, before their share of the smelting expenses. The recipients, who will receive unequal shares, are lawyers Lawrence Page, Alan Lenczner and Donald Slaght (who refused his share); former Corona president, Nell Dragovan; company geologist at the time of the find, David Bell; and former Corona chairman Murray Pezim.

A dividend of 5 cents per share will be paid to all Class “A” subordinate voting and class “B” common shareholders on May 31. Corona (TSE) $000s except per share items Quarter ended Mar. 31 1990 1989 Revenue $91,100 $69,300 Net earnings 10,500 4,400

per share 0.07 0.03