Golden Knight Res. takes quarterly loss on chin

Higher exploration and administrative costs, combined with a writedown of the Comidok property in West Africa, have resulted in a third-quarter loss for Golden Knight Resources (GKR-T).

While revenue levels covered operating costs, they fell short of the level needed to cover capital requirements, depreciation and amortization.

The junior posted a loss of $1.3 million for the period (or 9 cents per share) on revenue of $6.3 million, compared with a loss of $1.1 million (9 cents per share) on $3.1 million for the third quarter of 1995.

For the nine months ended Sept. 30, the junior lost $3.9 million (26 cents per share) on revenue of $14.7 million, compared with a loss of $2.2 million (18 cents per share) on $10.2 million for the first three quarters of last year.

Despite the loss, production at the Casa Berardi gold mine has improved as a result of higher mill throughput. The company has a 40% interest in the mine, with the remainder held by TVX Gold (TVX-T).

Golden Knight’s share of production from the mine was 7,536 oz. in the third quarter, compared to 5,516 oz. in the same period last year. Cash operating costs fell to US$353 from US$489 per oz.

Ross Mitchell, vice-president for finance, played down the overall loss, saying: “Our bottom line is not as important to us at this stage. We’re looking at developing and acquiring a resource base.”

The focus of Golden Knight’s exloration efforts is West Africa.

In the Manso Nkwanta region of Ghana, extensive gold soil geochemical anomalies have been outlined on the Essuowim, Mpesetia and Oda River concessions.

Drill results from the Abore North gold zone at Oda River show continuity of mineralization along strike and to depths of up to 90 metres. Highlights include: 2 metres grading 5.22 grams gold per tonne in hole 148; 2 metres at 0.43 gram in hole 151; 4 metres grading 0.54 gram gold, 3 metres of 10.29 grams and 30 metres of 0.31 gram in hole 48; 14 metres of 2.92 grams in hole 83; 28 metres of 0.45 gram in hole 94; 10 metres grading 3.63 grams in hole 118; and 8 metres at 8.59 grams in hole 126.

Earlier results include: 36 metres grading 0.85 gram in hole 84; 52 metres of 0.6 gram in hole 88; 48 metres from surface grading 2.8 grams in hole 89; 40 metres of 2.03 grams in hole 90; and 4 metres from surface grading 4.97 grams and 36 metres of 3.31 grams in hole 125.

The zone, measuring 1.4 km long and up to 40 metres wide, is open along strike and at depth.

Golden Knight recently increased its interest in Gold Fields Ghana to 17.5% from 5%.

Gold Fields Ghana, which is controlled by Gold Fields of South Africa, holds the mining rights to the Tarkwa concession in Ghana, where resources stand at 294.1 million tonnes grading 1.37 grams gold. Open-pit mining is planned.

Meanwhile, in neighboring Burkina Faso, the company is preparing to drill its wholly owned Seguenega concession, where trenching has outlined high-grade gold mineralization.

Closer to home, in the Timmins camp of Ontario, the company has launched a 2,000-metre drill program at its Night Hawk Lake gold prospect.

Induced-polarization surveys there have defined 14 conductors.