Galactic posts second quarter loss as Summitville output drops

Gold producer Galactic Resources (TSE) reported a loss of US$630,000 or 1 cents per share for its 1990 second quarter, compared with a loss of US$1.36 million or 4 cents per share for the 1989 second quarter. The company’s 1990 first-half results show net income of US$6.9 million or 16 cents per share, compared with net income of US$0.5 million or 1 cents per share for the same period in 1989.

Cash flow from the company’s producing mines reached US$7.56 million for the first half of 1990, compared with US$8.4 million for the same period in 1989.

The first-half results include the gain of US$7.41 million, after tax, from the sale of 75% of the company’s interest in the Far South East copper-gold project in the Philippines. The Ridgeway gold mine, a joint venture between Galactic (48%) and RTZ (52%), contributed US$6.94 million to Galactic’s first- half operating income.

Ridgeway shipped 88,554 oz. gold during the period, up from 78,184 oz. in 1989. The cash production cost averaged US$170 per oz. in the 1990 first half. Reduced gold bullion prices in this period were offset by benefits from forward sales at US$460 per oz. and deliveries at US$453 per oz. under its gold loan.

The continued strong performance of Ridgeway and the gain from the sale of the Far South East project interest were offset, however, by reduced results from the Summitville mine in Colorado resulting from the customary seasonal startup expenses and delayed gold recovery.

Summitville produced 6,963 oz. gold in the 1990 first half, compared with 17,848 oz. in the 1989 first half. Galactic expects that the mine’s 1990 second half production results will substantially exceed 1989 second half.

Galactic also reported that construction of its 50% owned Hollister oxide gold mine in Nevada is nearing completion and targeted to pour its first gold in the 1990 fourth quarter.

Galactic Resources (TSE) $000s except per-share items* 3 months ended June 30 1990 1989 Revenue $3,604 $3,189 Net earnings (loss) ($630 ) ($1,364)

per share (1 cents ) (4 cents) *US dollars