Gold output and earnings during the first half of the year slipped for Falconbridge Gold (TSE), which has unveiled a new policy of selling forward.
Production during the first six months of 1991 totalled 36,525 oz. compared with 45,768 oz. for the same period last year. Net earnings for the same period amounted to $100,000 compared with $4.2 million for the first half of 1990.
The company attributed the lower earnings and revenue in part to the drop in gold production resulting from suspension in January of processing Owl Creek mine stockpiled ore in northeastern Ontario. Also, lower market prices for gold affected the balance sheet.
As a form of price protection, Falconbridge Gold reported selling forward 27,000 oz. at an average price of US$450 per oz. to December, 1994. “It has now become our policy to sell forward, as price levels dictate, approximately 50% of our future production for up to three years,” Chairman Brian Ferguson told shareholders this year. Earlier corporate thinking saw the company enter into forward sales contracts for about one-third of its planned 3-year output at prices averaging US$442.
The company’s total gold output in 1990 was 64,573 oz.
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