Black Hawk reports mixed results

Despite record output and lower cash costs, Black Hawk Mining (BHK-T) failed to turn a profit in 1999.

Net losses totalled US$12.3 million (or 10 per share) on revenue of US$31.7 million, compared with a loss of US$5.88 million (6 per share) on US$28.72 million in 1998. Both periods included writedowns on properties; losses last year would have been US$4.8 million were it not for the writedown, which reflects a combination of lower realized gold prices plus higher reclamation costs and exploration.

Black Hawk produced a record 117,608 oz. gold, up 32% from a year ago. Operating costs, on the other hand, fell 15% to US$230 per oz.

The El Limon mine in Nicaragua produced a record 65,483 oz. at US$226 per oz. A total of 361,416 tonnes grading 6.67 grams per tonne were milled.

In 2000, the mine is expected to yield 84,000 oz. at US$170 per oz. A switch to the richer Talavera Sur and Footwall veins accounts for the projected increase.

Production at the Keystone mine, in Manitoba, topped 52,125 oz., and operating costs averaged US$236 per oz. The mill treated 462,291 tonnes grading 3.76 grams during the year.

Keystone is now idle, pending an improvement in the price of gold. A total of 9,100 oz. was liberated from stockpiled ore prior to the shutdown.

Meanwhile, exploration continues in the vicinity of the El Limon mine and at the Manantial Espejo gold-silver project in Argentina. Funding at the latter is being provided by Silver Standard Resources (SSO-V), which can earn half of Black Hawk’s 80% interest by spending US$4.5 million on exploration and paying US$1.5 million by the end of 2001. Barrick Gold (ABX-T) holds the remaining interest in the project and, upon completion of a feasibility study, must either sell its stake to Black Hawk or double it at a predetermined price.