Placer Dome gold production tops 1.4 million oz.

Contributions from two new gold mines helped boost Placer Dome’s (TSE) share of gold production to just over 1.4 million oz. in 1990, from 1.18 million oz. produced in 1989 (net of minority interests). The Granny Smith mine in Australia began commercial production in Feb., 1990, followed by the Porgera mine in Papua New Guinea in September. The new mines contributed a total of 163,600 oz. to the company’s share of total gold production last year.

The company’s average cash production cost declined to US$232 oz. from US$245 oz. in 1989. But total production cost increased to US$306 per oz. from US$299 per oz., primarily as a result of higher depreciation charges at new mines.

Gold earnings in 1990 were $106.5 million, $20.9 million higher than in 1989. Gold sales totalled $859.3 million at an average realized price of US$417 per oz., taking into account forward contracts.

Earnings from other metals declined to $25.4 million from $51.4 million in 1989 largely because of lower metal prices.

Despite a third-quarter loss, Placer Dome reported consolidated net earnings in 1990 of $191 million, or 81 cents per share, which includes net non-recurring gains of $70.9 million. This compares with net earnings of $125.1 million, or 53 cents per share, in 1989.

The fourth-quarter loss of $8.8 million was attributed to a $32.7 million writedown at year-end, the largest component being a $20-million ($30.2-million for the year) writedown of the Big Bell mine.

At year-end, Placer Dome calculated gold reserves of 16.5 million oz., a decrease from 18.9 million oz. reported at the end of 1989. However, several advanced exploration properties controlled by the company are reported to contain more than five million ounces gold not yet defined as reserves.

By the third quarter of 1991, Placer Dome expects to complete a feasibility study and reserve estimate for the Mt. Milligan copper-gold property in British Columbia.

And construction of a 16,500-ton-per-day plant at the La Coipa mine in Chile is expected to be completed under budget and on schedule this summer. Placer Dome is operator and has a 50% interest in the mine which is expected to produce 175,000 oz. gold and 16 million oz. silver during its first full year of operation.

Later this year, Placer Dome expects to start up a pressure oxidation circuit to process refractory ore at the Porgera mine.

Progressive expansion of the plant and mining rate will continue until 1993. Placer Dome (TSE) 3 months ended Dec. 31 1990 1989 Revenue $298,200 $296,100 Net earnings (loss) (8,800) 34,800 per share (0.04) 0.15 12 months ended Dec. 31 Revenue $1,172,800 $1,011,300 Net earnings 191,000 125,100 per share 0.81 0.53