Record gold production of 318,171 oz. in 1994 generated $33.2 million in operating cash flow for Royal Oak Mines (TSE).
Net earnings for the year amounted to $22.1 million on revenue of $162.1 million, notwithstanding a fourth-quarter loss of $3.7 million on revenue of $39.9 million.
A fire earlier in the year prevented commercial production levels from being reached at the Colomac open-pit mine.
Revenue from the operation, situated north of Yellowknife, N.W.T., was therefore netted against operating costs, and the loss deferred as a pre-production cost.
Cash costs for the fourth quarter and the year averaged US$326 and US$311 per oz., respectively. Production costs in the fourth quarter were adversely affected by a combination of below-average head grades at the Giant mine in Yellowknife and a rise in labor costs at the Hope Brook mine in Newfoundland. Labor rates at Hope Brook fluctuate with the price of gold, and Royal Oak reports that head grades at the Giant mine have returned to normal. Royal Oak has $191 million in working capital and is evaluating several acquisition opportunities.
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