Glamis enjoys record production

Reno, Nevada-based Glamis Gold (GLG-T) has posted fourth-quarter earnings of US$2.8 million and record gold production of 230,065 oz. during all of 2001.

The earnings, which translate into US4 per fully diluted share, compares with a year-ago loss of US$37.5 million (or 54 per share). Revenues climbed to US$19.4 million from US$15.7 million. Cash flow from operations was US$2.8 million, a dramatic turnaround from the US$38 million consumed by operations in the same period a year earlier.

For all of 2001, Glamis earned US$4.8 million (7 per share) on revenue of US$64.2 million, compared with a year-ago loss of US$48.7 million (70 per share) on US$61.6 million.

During the fourth quarter, Glamis produced 72,312 oz. of gold at a total cash cost of US$159 per oz. compared with the year-earlier 57,957 oz. at US$194 per oz. Gold production for 2001 reached a record 230,065 oz. at a total cash cost ofUS$172 per oz., compared with year 2000 production of 218,390 oz. at US$222 per oz. The cost reduction reflects the first full year of production at San Martin mine and operating improvements at the Marigold mine. The company’s average realized gold price for 2001 was US$272 per oz., US$8 per oz. off the pace set in 2000.

The bulk of production came from San Martin in Honduras, which spat out 114,216 oz. at US$120 apiece during 2001, its first full year of operation. The mine’s original feasibility study pegged production at 85,000 annually, but in late 2000 Glamis decided to expand annual production to 120,000 oz.. The expansion was completed during the third quarter of 2001, and in the fourth quarter the mine produced 39,668 oz. at US $102 each. In 2002, the mine is expected to churn out more than 120,000 oz. at US$120 per oz.

At the 66.7%-owned Marigold mine in Nevada, production amounted to 56,525 oz. at US$179 per oz., up from the year-ago 43,655 at US$240 each. The expansion project at Marigold is underway with major purchase orders placed, and equipment already arriving on site for assembly. The expansion plan calls for a production to climb to an average of 180,000 oz. gold annually (on a 100% basis).

Work planned for Marigold in 2002 includes additional in-fill drilling aimed at converting in-pit resources to reserves and drilling to test a recently discovered extension of a mineralized dike in Section 25.

In 2002, Glamis expects to produce some 255,000 oz. of gold at a total cash cost of US$172 per oz.

The unhedged and debt-free company ended 2001 with working capital of US$55.4 million, including US$45.9 million in cash and equivalents.