Geomaque bleeds red

Struggling junior gold miner Geomaque Explorations released its year-end financial results today and they weren’t pretty

The company’s net loss for the year ended Dec. 31, 2001, was US$10.5 million (US17 per share) on revenues of US$9.2 million, compared with a loss of US$13.6 million (US25) on revenues of US$21.2 million during 2000.

At Geomaque’s new Vueltas mine in Honduras, production totalled 27,077 oz. gold for the year, with commercial production being achieved in mid-year.

During the six-month operating period, Geomaque realized a price of US$275 per oz. while cash costs amounted to US$241 per oz. Thus, cash generated from operations amounted to $573,000.

Geomaque has been plagued by operational difficulties at Vueltas and has not been able to hit the production targets set out the project’s feasibility study. The company describes the difficulties as being mainly related to the production of suitable agglomerates from the oxide ore with high clay content and deficient operational procedures related to multiple stacking in a high rainfall environment.

As a result, Geomaque has not met the terms of its repayment agreements and a corporate restructuring was carried out in December.

Geomaque is much more optimistic about the performance of its second leach pad at Vueltas, completed in February 2002, and the company hopes to get some relief from rising gold prices.

Geomaque also recovered some gold from its San Francisco mine in Mexico. The heap-leach operation has been in leach-only mode since November 2000. Heap rinsing commenced in August 2001 and continued into the first part of 2002.

During 2001, 17,092 oz. gold were recovered compared to 69,100 oz. in 2000.

Geomaque is also involved in exploring the Marathon palladium project in Ontario.

Geomaque ended 2001 with just US$614,000 in cash compared to US$2 million a year earlier. In February 2002, the second tranche of a private placement of common shares amounting to $998,000 was received.