Success at Jamestown mine factor in ABM Gold results

The future of ABM Gold (AMEX) may depend on a Northwest Territories gold project scheduled to produce annually 200,000 oz., starting in September. But for the moment, the financial fortunes of the 50% owned Northgate Exploration (TSE) affiliate ride largely on a California gold mine that has seen something of a turnaround in the past year.

Thanks to improved gold recoveries and higher throughput, the Jamestown mine in California produced 111,300 oz. gold last year at a cash cost of US$267 per oz. ABM owns 42% of Sonora Gold (TSE) which in turn holds a 70% stake in Jamestown.

In 1988, the mine churned out 97,000 oz. gold at a cost of US$292 per oz. Further improvements in both production and recoveries are expected this year.

As a result of the Jamestown turnaround, ABM reported net earnings for the year ended Dec. 31 of $2 million or 12 cents per share, compared with a loss of $22.9 million or $1.72 per share in 1988.

The 1988 results included ABM’s share of a $50.8-million writedown absorbed by Sonora on the carrying value of Jamestown where operating costs had risen to US$400 per oz. a year earlier. ABM’s 1989 revenues increased to $7 million from $6.7 million in 1988.

The company reported a fourth- quarter loss of $823,000 or 7 cents per share, compared with a loss of $12.1 million or 91 cents per share during the identical period in 1988. Fourth-quarter revenues increased to $1.7 million from $1.02 million.

Meanwhile, in the Northwest Territories, ABM is spending $166 million to bring the Colomac gold project into production. With tune- up scheduled for next month, the mine is expected to cost about US$260 per oz. to operate.006 ABM Gold (AMEX) — $000s Year ended Dec. 31 1989 1988 Revenue $7,004 $6,796 Net earnings (loss) 2,040 (22,890 )

per share $0.12 $(1.72 )