Vancouver — Higher production from the large Pipeline gold complex in central Nevada drove Royal Gold (RGLD-Q) to a profit of US$372,299 or 2 per share in the latest quarter ended Sept. 30.
This compares to a profit of US$629,084, or 4 per share recorded by the Denver-based royalty company in the corresponding period of 2000. The decrease is the result of a US$1.07-million loss on its equity investments. Excluding the charge, net income came in at US$1.45 million or 8 per share in the first quarter of fiscal 2002. Revenues nearly doubled coming in at US$2.8 million from the US$1.5 million recorded in the first quarter of fiscal 2001.
“We are pleased to report an 84% increase in revenues from the same period last year,” says Royal Gold’s CEO, Stanley Dempsey. “Because the price of gold for the quarter averaged above US$170 per oz., our royalty rate at the pipeline complex went up to 2.25%.”
Pipeline produced 295,518 oz. of gold in the quarter, compared to 188,172 oz. in the same three-month period one year ago. Held 60% by Placer Dome (PDG-T) and 40% by Kennecott Explorations, a subsidiary of mining giant Rio Tinto (RTP-N), the Pipeline mining complex is expected to crank out more than 1 million oz. of gold in fiscal 2002.
In White Pine cty. Nevada, the Bald Mountain mine added 18,000 oz. of gold to Royal Gold during the quarter. The company holds a 1.75% net smelter royalty over a portion of the mine, which is operated by Placer.
Hurting the company’s bottom line during the quarter was a non-cash charge related to the company’s equity investment in stock of Yamana Resources (YRI-T). Royal Gold holds a 2% net smelter royalty on all mineral production from Yamana’s properties in Santa Cruz province of Argentina.
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