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The quarterly loss is attributed to several factors, including: weak gold prices; low grades at the Keystone mine in Manitoba; increased exploration costs at the El Limon mine in Nicaragua; and a one-time administration charge of US$300,000 related to Black Hawk’s merger with Triton Mining.
By comparison, the company earned US$1.3 million on revenue of US$8.1 million in the third quarter of 1997.
The 9-month figures include four months of operating results from Triton (former owner of the El Limon mine), which became a subsidiary of Black Hawk in May. Profits over this period, which are based on sales of US$21.2 million, translate as 1 cents per share.
In the comparative period in 1997, Black Hawk earned US$3.2 million (or 4 cents per share) on sales of $17.1 million.
Production at El Limon increased to 16,251 oz. over the third quarter, compared with 12,710 oz. under Triton in the corresponding period last year. The increase is due to higher grades, greater throughput and an increased recovery rate. Production also was up over the 9-month period, to 42,412 oz. from 35,011 oz. a year ago. Cash costs between the two 9-month periods fell to US$244 from $274 per oz.
At Keystone, the company produced 12,299 oz. in the recent quarter, down from 16,717 oz. a year ago, while costs escalated to US$232 from US$204 per oz. The production shortfall is attributed to poor grades recovered in the Wendy pit during the final phases of mining. Work is now focused on the adjacent East pit.
For the year to date, Keystone has produced 44,954 oz. at a cost of US$209 per oz., compared with 49,746 oz. at US$192 per oz. at this time last year.
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