Troubled Quebec miner McWatters Mining (MWA-T) limped to a net loss of $5.9 million for the three months ended Sept. 30.
The loss translates to a penny per share, and compares with a year-ago net loss of $467,000. Conversely, revenue between the two periods climbed by $3 million to $8.1 million. Cash consumed by operating activities was $2.4 million, a stark contrast to the $2 million generated a year earlier.
For the first nine months of the year, McWatters’ loss piled up to $10.6 million (or 3 per share) on revenue of $16.5 million. Operations ate through $3.2 million.
During the third quarter, McWatters squeezed 14,866 oz. of gold out of 338,337 tonnes of ore. Ore grades during the period averaged 1.44 grams gold per tonne; cash costs came in at US$432 per oz., and gold recovery at the mill remained at 95%. The company realized an average US$360 per oz. for its gold production, up from US$319 per oz. a year earlier.
During the quarter, the company replaced some senior management, changed its sampling procedures and introduced the use of reverse circulation drilling as a grade control tool. The moves helped improve production levels by quarter’s end.
Still, mining at the money-losing Sigma-Lamaque mine was suspended in early October. Milling of stockpiled ore continued until Oct. 21 to produce 3,124 oz. of gold. The mill has been put on care and maintenance pending a resumption of operations.
Mining consultant RSG Global says the complex could be restarted at a profit pending optimization of the mine’s operation. RSG also suggests a $2-million drill program in anticipation of a revised resource estimate. At last report, reserves stood at 10.4 million tonnes grading 2.67 grams gold per tonne.
McWatters notes that a revival at Sigma-Lamaque would require additional financing. To that end, the company has agreed to sell the nearby Kiena mine complex on Parker Island, west of Val d’Or, Que., to Western Quebec Mines (WQM-T) for $3 million. WQM would fork over another $1 million once the Kiena mill resumes commercial production.
McWatters’ cash position at the end of the third quarter stood at $1.2 million.
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