Dickenson boosts first-quarter income

Continuing its “winning” ways, Dickenson Mines of Toronto recorded a net income during the first quarter of this year of $1.2 million (9 cents per share), compared with $431,000 (4 cents per share) for the same period in 1986. Net revenues during the first quarter were $9.7 million.

First-quarter gold production at the Dickenson-Sullivan Mines joint- venture Red Lake (Arthur W. White) mine in northwestern Ontario was 17,800 oz (Dickenson’s share was 11,600 oz), at an average millhead grade of 0.31 oz per ton.

According to President John Kachmar, production at Red Lake was adversely affected during the quarter by a shortage of skilled miners and a reduced milling rate related to the completion of major repairs to a rod mill unit.

Meanwhile, Kam-Kotia Mines of Toronto, which has a 33.3% voting interest in Dickenson, recorded a third-quarter (for the three months ending March 31) income of $208,000, compared with $20,000 a year earlier.

Dickenson, which held its annual meeting jointly with Kam-Kotia, reported a net income for 1986, including extraordinary items, of $4.59 million (39 cents per share), compared with $1.7 million (16 cents per share) in 1985. Total revenues in 1986 were approximately $39 million.

Kam-Kotia reported a net income in 1986, before an extraordinary item, of $469,000 (3 cents per share) compared to a loss of $340,000 (5 cents per share) in 1985. After an extraordinary item, pertaining to an increase in the carrying value of the company’s investment in Dickenson, the company had a 1986 net income of $2 million (22 cents per share), compared to a net loss of $436,000 (6 cents per share) in 1985. Gold production up

Total production at Dickenson’s Red Lake operation in 1986 was 240,000 oz of ore grading an average of 0.32 oz and yielding 67,900 oz (Dickenson’s share, 65%), up 5,200 oz from the 1985 total. Tonnage milled increased 11% from 1985. Total mill recovery was 88.5%. Major mechanical modifications done to the No 1 shaft ore hoist had a negative impact on fourth- quarter production, as did the breakdown of a rod mill.

The per ounce production cost during the year was $347.

The gold production objective for the Red Lake mine in 1987 is 84,000 oz (Dickenson’s share, 55,000 oz).

The company continues its exploration work to further delineate and gain access to the mine’s hangingwall zones. Scheduled work includes 2,500 ft of lateral development and 24,000 ft of diamond drilling.

Current mining and milling facilities at the mine can support a daily production rate of 900 tons per calendar day (the current production rate is 745 tons/day), and management has been studying alternatives for increasing production beyond that level.

One alternative, increasing the daily production to 1,500 tons by sinking a new shaft to 6,000 ft, at an estimated total cost of more than $55 million, is now out of favor, Mr Kachmar told the annual meeting. Other proposals, such as a more modest rate of mine and mill expansion utilizing existing facilities and increasing the daily rate in increments, are being reviewed.

Silver production in 1986 by Dickenson’s Silvana operation near New Denver, B.C., totalled 466,000 oz, down slightly from the previous year. Approximately 24,000 tons of ore grading 19.7 oz silver, 9.9% lead and 7.2% zinc were mined in 1986, with ore reserves increasing by 8,000 tons. The mill recovery factor for silver last year was 98.1% New kiln unit

At Dickenson’s wholly-owned Havelock Lime Works near Moncton, N.B., a new vertical shaft kiln is being built, which the company will lease. The company reports the new kiln unit will result in lower fuel consumption and boost the annual lime processing capacity by approximately 30,000 tons to 100,000 tons per year.

Dickenson’s total exploration expenditures in 1986 amounted to approximately $2.5 million.

Kam-Kotia, which is seeking to become an operating company through the acquisition of revenue producing assets in the industrial mineral field, may be nearing its goal. Mr Kachmar, who is also president of Kam-Kotia, said the company is involved in “sensitive” discussions along these lines.

Elected a director on the Dickenson board was R. P. Douglas, and on Kam-Kotia’s board, R. J. Hicks, the two men filling the vacancies created by the recent death of the president of both companies, P. L. Munro.