Metallica pulls in horns

The curtailment of exploration staff in South America and the writedown of deferred exploration costs have resulted in a net loss of US$570,000 for Metallica (MR-T) in the 1998 third quarter.

The Denver-based company is in the midst of a program aimed at decreasing general and administrative costs and exploration staff. At Sept. 30, the junior had cash and cash equivalents of US$5.3 million, plus US$1.5 million in securities.

In the first quarter of 1999, Metallica and partner Cambior (CBJ-T) are expected to complete a revised feasibility study and minable reserve figure for the Cerro San Pedro gold-silver project in San Luis Potosi state in central Mexico.

Cambior is required to spend US$20 million on exploration to earn its 50% interest. To date, the partners have spent more than US$12.8 million, including the purchase of a used, 3-stage crushing facility with a capacity of 8 million tonnes per year.

During the latest quarter, 29 holes were drilled underground while 13 holes totalling 1,425 metres were drilled from surface. About half of this drilling was intended to increase reserves in previously untested areas.