Campbell’s loss widens in 2005

Quebec-based gold miner Campbell Resources (CCH-T, CBLRF-O) posted a loss of $21.3 million (20 per share) on revenues of $19.9 million in 2005, a loss that was inflated by accounting writedowns.

In 2004, Campbell lost $3 million on revenues of $21.8 million.

Campbell remains in financial trouble despite improved cost performance at its Joe Mann mine south of Chibougamau, Que., and it has been granted creditor protection under the Companies’ Creditors Arrangement Act until the end of May. In addition, it faces difficulty in recovering debts owed to it by purchasers of a royalty from production at Joe Mann.

Fully $18.5 million of the past year’s loss came from reductions to the carrying value of the company’s major properties. It took a $16.7-million writedown on the Copper Rand copper project near Chibougamau, and another of $1.8 million on the Discovery gold property northwest of Lebel-sur-Quevillon, Que.

The Joe Mann mine produced 29,431 oz. gold and 407 tonnes copper in 2005, against 39,175 oz. gold and 366 tonnes copper in 2004. Costs fell to US$412 per oz., from US$451 the year before. Campbell expects the mine to remain open through 2006 and “possibly into 2007,” and plans resource drilling campaigns this year.

At Copper Rand, development continued into the fourth quarter, but was suspended. Production of 921 tonnes copper and 1,903 oz. gold from about 31,500 tonnes of development ore was credited against development expenses. Since the beginning of 2006, development has resumed.

Campbell agreed to sell Discovery to Strateco Resources (RSC-V, SRSIF-O) for $1.5 million in shares and cash in February.

Campbell also suspended work on its Corner Bay copper project south of Chibougamau to conserve cash. In 2005 it defined a measured and indicated resource of 1.2 million tonnes at 4.64% copper, plus an inferred resource of 1 million tonnes at 5.76% copper at the deposit, a figure based on a cutoff grade of 2% copper.