Despite loss, Goldcorp proceeds at Red Lake

A 9-month loss for Goldcorp (G-T) has not dampened the company’s enthusiasm for expansion at its Red Lake operation in northwestern Ontario.

Goldcorp’s losses for the nine months ended Sept. 30 were US$2 million (or 3cents per share) on revenue of US$46.8 million. The comparable nine months in 1996 brought earnings of US$8.1 million on revenue of US$62.5 million.

An ongoing strike at the Red Lake mine, which began June 23, 1996, took the relatively high-cost mine out of production and left average production costs lower than in the first nine months of 1996. The Wharf mine in South Dakota also reported lower production costs.

Operating costs to maintain and develop the workings at Red Lake, combined with lower gold prices, are responsible for the loss. Goldcorp realized an average operating cost of US$336 per oz. during the period, down from US$380 in the first nine months of 1996.

For the third quarter, Goldcorp posted earnings of US$1.4 million on revenue of $16.7 million. In the corresponding period last year, the company lost US$40,000 on revenue of US$18.1 million.

A prefeasibility study by consulting firm Dynatech concurred with the company’s previous estimates that the Red Lake mine could produce 200,000 oz. gold per year from newly discovered high-grade zones, at a cost of about US$180 per oz. Dynatech estimated that the cost of sinking a new, 7-500-ft.

shaft and constructing a 1,250-ton-per-day mill would be US$115 million.

The company’s two industrial-minerals divisions, sodium-sulphate producer Saskatchewan Minerals and limestone quarry Havelock Lime, have remained profitable.

Goldcorp has also amended its bid to take Wilanour Resources (wlr-t) private, removing its offer to purchase Wilanour shares at $1.40. Goldcorp’s offer to trade one Goldcorp Class A share, plus a warrant to buy a second at $10, for six Wilanour shares, remains in effect.

Wilanour’s directors expect to table a fairness opinion on the Goldcorp bid this month.