Price gains, lower costs impel Dome group profit

It was a banner first quarter in 1987 for the Dome Mines group of gold-producing companies.

On a consolidated basis, Dome reports net income for the period of $17,126,000, or 19 cents a share, compared to a net loss of $14,132,000 or 16 cents a share in the similar period last year.

The company notes, however, that results of operations in the first quarter this year included unusual items that increased income by $6,084,000 and in 1986 increased losses by $13,436,000.

The first quarter income from discontinued coal mining operations was $6,250,000 in 1987, compared to a loss of $l58,000 in 1986.

Before the unusual items and discontinued coal mining operations, Dome had net income in the latest period of $4,792,000 compared to a loss of $108,000 in the 1986 period, and credits the improvement in operating results primarily to higher gold prices and reduced operating costs.

The company’s bullion revenue climbed to $75,743,000 in the quarter, well up from $67,312,000 last year, even while total production of gold in the latest quarter (from the Dome mine, Campbell Red Lake Mines, Sigma Mines (Quebec), Kiena Gold Mines, and the Detour Lake mine), decreased to 137,604 oz in the period, from 138,577 oz last year.

Production at the Dome mine for the latest three months declined to 32,530 oz, from 33,454 oz, as the result of lower grades of ore milled. Chairman Fraser Fell notes that despite the small production decrease, cash operating costs per oz for the quarter decreased to $362 ($272US), from $368 ($262), in 1986. Campbell Red Lake

Campbell Red Lake had net income for the 1987 first quarter of $22,550,000, compared to a net loss of $11,884,000 in the 1986 first quarter.

Results of operations in the 1987 first quarter included unusual items that increased income by $13,032,000, and in 1986 increased the loss by $18,566,000.

Campbell’s income for the latest period, before unusual items (mainly the sale of a 702,500-common share holding of Lac Minerals, for net proceeds of $28,546,000, together with the elimination of provision for decline in value of the Lac shares) was $9,518,000, up from $6,682,000 in 1986, and again principally due to higher gold prices and lower operating costs.

Bullion revenue for Campbell in the quarter was $47,267,000, against $42,320,000 last year. Gold production was 61,866 oz, compared to 54,359 oz, as a result of treatment of higher grades of ore. Operating costs per oz of $153(C), compared with $158 in 1986.

At Detour Lake (50/50 Campbell and Amoco Canada Petroleum), first-quarter production decreased from 13,067 oz in the first quarter last year, to 7,593 oz in the latest quarter, because of planned reductions in ore grade during the transition period from open pit to underground mining. Sigma Mines

Sigma Mines in the latest quarter reports net income of $2,206,000, almost double income of $1,149,000 in the 1986 period. Bullion revenue from the Sigma mine was $10,505,000 from production of 18,870 oz gold in the 1987 quarter, compared to $7,748,000 from production of 15,993 oz in the 1986 period.

The company reports a conversion/expansion program at the Sigma mine is proceeding on schedule and within budget.

Higher gold prices, increased revenues and lower operating costs also gave Kiena Gold Mines a profit increase for the latest quarter.

The company had net income of $1,690,000, higher by 23% than the income figure of $1,369,000 recorded in the 1986 first quarter.

Bullion revenue this year was $9,229,000 compared to $8,961,000 in 1986. Gold production at 16,745 oz in the latest period was 8% lower than in the 1986 period, with a 4% increase in tonnage being more than offset by lower mine grades.

Forecast gold production at Kiena is now estimated to be 68,000 oz, an increase of 1,000 oz over the original plan, the company says.