Writeoff hurts Amax results

Equity losses and writedowns put a damper on 1990 results for Amax Gold (NYSE) which reported earnings of US$28.3 million for the year, compared with 1989 earnings of US$33.3 million. The losses and writedowns were related to the company’s investment in Canamax Resources (TSE). Amax sold its 10.6 million shares of Canamax to the Amax Inc., the company’s parent, which resulted in a writedown of US$12.6 million as well as an equity loss of US$5 million.

Amax reported a gross operating margin (after depreciation) of US$86.7 million, up substantially from the US$62.2 million reported in 1989. Amax produced 354,859 oz. gold during 1990 at an average cash cost of US$147 per oz. and an average total cost of US$220 per oz. This compares with gold production of 307,387 oz. in 1989 at an average cash production cost of US$132 per oz.

The Wind Mountain mine in Nevada was the primary factor in the company’s increased gold production. The mine produced 81,733 oz. gold during 1990, up from the previous year’s production of 30,903 oz.

The company’s Sleeper mine in Nevada continues to have the largest influence on Amax’ earnings with production of 250,131 oz. gold at an average cash cost of US$125 per oz. Amax Gold (NYSE) 3 months ended Dec. 31 1990 1989 Revenues $44,700 $33,200 Net earnings 12,200 5,100

per share 0.21 0.08 12 months ended Dec. 31 Revenue $149,800 $121,600 Net earnings 28,300 33,300

per share 0.47 0.55


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