Placer Dome’s earnings benefit from sale of Canadian oil and gas

The sale of Canadian oil and gas assets gave Placer Dome (TSE) a large boost to its 1990 third-quarter and 9-month earnings. The major company received $288.5 million from the sale of its oil and gas assets and recorded a gain of $54 million in the third quarter. As a result, earnings for the third quarter were $83.9 million compared to $21 million in the corresponding year-earlier period.

Earnings for the nine months ended Sept. 30 were $119.8 million, or 85 cents per share including non-recurring gains of $113.9 million from the asset sale.

Earnings from continuing operations were $85.9 million, an increase of $3.3 million from the first nine months of 1989.

The increase in profitability is tied to a drop in operating costs, and an increase in both the price of gold and the amount of gold produced.

The average cost of production per oz. of gold for the nine months ended Sept. 30 was US$242 compared to US$250 in the 1989 period, while gold production jumped to 1.037 million oz. from 850,000 oz. The price realized for gold produced rose to US$421 per oz. from US$413 per oz.

Placer reports that the Porgera mine in Papua New Guinea, in which Placer Dome holds a 22.7% interest, commenced commercial production on Sept. 1. The mine is projected to produce in excess of 900,000 oz. of gold per year for the first six years of its life at an average cost of US$105 per oz.