Glamis posts record gold output

Vancouver Glamis Gold (GLG-T) managed to lower production costs while ramping up production in 2002.

The Reno-based company posted net income of US$13.7 million, or US$0.14 per share for 2002, compared to net income of US$4.8 million or US$0.07 per share in the 2001. The fourth quarter of 2002, added US$4.7 million or US$0.04 per share in revenue to Glamis, compared to the US$2.8 million or $0.04 per share received in the fourth quarter of the previous year.

“Glamis had a record year in 2002," says President, Kevin McArthur. "We surpassed both our production targets and our total cash cost projections and, in the process, doubled our earnings per share and increased cash flow from operations by 83%"

Glamis produced 251,919 oz at total cash cost of US$160 per oz. in 2002. This marks a signifcant improvement over the 230,065 oz cranked out last year at a total cash cost of US$172 per oz. Operating cash flow surged to US$33.8 million (before working capital changes and reclamation expenditures), compared to US$18.5 million in 2001.

Gold sales for the year came in at US$80.8 million, compared to US$64.3 million in 2001. For the fourth quarter, the company sold 68,784 oz at US$326 per oz, compared to slaes of 69,600 oz at US$277 per oz in the corresponding period of 2001.

The San Martin mine in Honduras continued to be the star perfomer, cranking out 129,435 oz of gold during the year, compared to 114,216 oz in 2001. Total cash costs to produce an oz. of gold rang in at US$106, compared to US$120 per oz in the previous year. As of Dec. 31, 2002, reserves at San Martin stood at 34 million tonnes grading 0.75 gram gold per tonne for 803,725 contained ozs.

Glamis’ 66.7% owned Marigold operation in Nevada added 55,550 ozs of gold at a total cash cost of US$180 per oz., compared to 56,525 oz at a total cash cost of US$179 per oz in 2001. Production during the year was constrained by a pre-stripping program in advance of the Marigold expansion. The company did start to see the benefits of the expansion in the fourth quarter when production came in at 22,878 ozs at a total cash cost of US$138 per oz, compared to 11,600 ozs of gold at a total cash cost of US$221 per oz in the corresponding quarter of 2001. At the end of 2002, the Marigold deposit held 52.7 million tonnes grading 0.81 gram gold for 1.36 million contained ozs.

"During the year, we made excellent progress in advancing the Marigold expansion project which will result in substantially higher gold production and reduced total cash costs in subsequent years," adds McArthur.

At the nearly depleted Rand mine in California, production increased to 66,934 oz of gold at a total cash cost of US$247 per oz, compared to 59,324 oz of gold at total cash cost of US$265 per oz in 2001. Active mining was completed in January but leaching operations will continue for another two years.

On the development front, Glamis completed a feasibility study on its El Sauzal project in Mexico. The study envisions a 190,000 oz per year operation over a ten year mine life. The final environmental review and permitting work is underway. Construction is slated to begin in the fourth quarter of 2003 with commercial production expected early in 2005. Reserves at El Sauzal stand at 20.5 million tonnes grading 3.05 gram gold for just over 2 million contained ozs.

At Marlin project in Guatemala, the company nearly tripled the mineral resource to more than 4 million oz of gold equivalent ozs, with 2.8 million oz in the measured and indicated resource categories. There are currently five drills on the property to further delineate the mineralization.

"We have made excellent progress in furthering our El Sauzal gold development project in Mexico and have transformed our Marlin property in Guatemala into a major gold discovery and possibly discovered an important new mining district in the process," says McArthur.