Higher production made it possible for
The company incurred a net loss of US$3.5 million (or 2 per share), compared with a loss of US$14.5 million (6 per share) a year earlier.
Gold production between the two periods rose 13%, to 199,000 oz., while cash operating costs improved 4%, to US$168 per oz. Total costs amounted to US$253 per oz. in the recent 3-month period.
The company realized a gold price of US$290 per oz., slightly better than US$286 per oz. a year ago. Cash flow from operations improved to US$5.5 million as a result of increased prices. This left the company with US$62.2 million in cash at the end of the quarter, including US$40 million in restricted cash related to its loan facility. The money will be applied to its long-term debt in 2003.
The Golden Giant mine, east of Marathon, Ont., turned in a strong performance, contributing 89,000 oz. gold at US$149 per oz. Production has begun at the Block 5 area, with shaft-deepening scheduled for completion my mid-year.
In Bolivia, the 88%-owned Kori Kollo gold mine produced 62,000 oz., slightly down from 64,000 oz. in the year-ago period. Cash operating costs were below target at US$201 per oz., up from US$189 per oz. a year ago.
The 84.65%-held Holloway mine, also east of Marathon, contributed 23,000 oz. at US$209 per oz., up from 20,000 oz. at US$206 per oz. Depreciation, depletion and amortization pushed total costs to US$347 per oz.
Battle Mountain’s 50% stake in the Vera-Nancy mine in Queensland, Australia, performed slightly below plan, though it is expected to be on target for the year. The mine contributed 25,000 oz. to the company’s account at US$121 per oz.; total costs were US$175 per oz.
Under a new mine plan at the Phoenix gold project in northern Nevada, Battle Mountain will increase the mining rate by 40% to 30,000 tons per day, which should have the effect of boosting production to 385,000 oz. gold annually while lowering cash operating costs to US$175 per oz.
The company also increased reserves to 159 million tons grading 0.039 oz. per ton, equivalent to 6.2 million contained ounces. The stripping ratio fell to 2.1-to-1.
Capital costs for the operation stand at US$189 million. The final feasibility study is due in the second quarter, and, assuming permitting goes smoothly, the mine could be up and running by the first quarter of 2002.
In the process of developing the Llallagua resource at Kori Kollo, Battle Mountain has received encouraging recoveries from bio-oxidized ore run through the mill. Recoveries ranged from 65% to 70%, compared with 18% to 39% without bio-oxidation. Resource drilling, completed during the quarter, will be incorporated into mine planning, which began in March.
Also, Battle Mountain has received positive drill results from the Blacktop deposit, near the Holloway mine. To date, drilling on a portion of the mineralization has outlined a resource of 445,000 tons grading 0.23 oz. gold per ton, which will be placed in the proven and probable category. The company is also testing three satellite deposits, which have the potential to total 750,000 oz. within 1,650 ft. of underground workings.
In April, the company signed a processing agreement with
Elsewhere, Battle Mountain reports that it has encountered significant mineralization at the Copper Basin area, 7 miles north of the Phoenix project, and that it has resumed drilling at the Casposo exploration project in Argentina.
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