Vancouver — Improved production at the Rand mine in southern California helped
Earnings for the third quarter totalled US$600,000 (or US1 per share) on revenue of US$15.9 million, compared with a loss of US$7 million (US10 per share) on revenue of US$14 million in the comparable period of 2000.
“The [current] fourth quarter looks to be even better,” says President Kevin McArthur, “and next year is shaping up nicely too.”
The net income was realized after a one-time expense of stock appreciation rights to a former executive of Rayrock Resources (acquired by Glamis in 1999) to the tune of US$800,000. Excluding this charge, Glamis’s net income in the quarter was US$1.4 million (US2 per share). For the first nine months of 2001, the company earned US$2 million, compared with a loss of US$10.6 million in the corresponding period last year.
During the quarter, the miner cranked out 57,295 oz. gold at an average cash cost of US$188 per oz. — US$52 per oz. better that a year earlier. Excluding the Rand mine, which had unusually high cash costs due to low production, total cash costs were US$134 per oz. Production at Rand is improving, now that gold is being recovered during the last phase of the Yellow Aster pit.
Cash flow from operations was US$2.2 million during the quarter, compared with US$500,000 a year ago. Working capital at the end of the period was US$17.1 million, down US$800,000 from the second quarter this year.
In late October, Glamis completed a cross-border equity offering of 10 million shares at C$5 per share. Gross proceeds of C$50 million will be used to finance the Marigold Millennium project in Nevada’s Battle Mountain trend.
Meanwhile, the San Martin mine, in Honduras, produced a record 32,2246 oz. gold at a total cash cost of US$123 per oz. More ounces were placed on the heap-leach pad than were produced, owing to drought-related problems. “However, if rainfall co-operates we could have a really good fourth quarter,” says McArthur. The mine remains on-target to produce 110,000 oz. this year.
At the Rand mine, Glamis poured 10,800 oz. in the second quarter, compared with 25,629 oz. a year earlier. The shortfall is blamed on stripping associated with the final phase of the Yellow Aster pit. Consequently, cash costs rose to US$418 per oz., from US$182 in the second quarter of 2000. Sustained mining resumed in September, and production for the year is expected reach 65,000 oz. However, about 5,000 oz. may be delayed into the first quarter of 2002 because the heap is now 300 ft. high and it takes a long time for solution to percolate through the collection system.
The 66.7%-owned Marigold mine cranked out 14,249 oz. gold (Glamis’s share) during the third quarter, compared with 8,189 oz. a year ago. Total cash costs dropped dramatically to US$160 from US$325 per oz. between the two periods. The increase is attributed to improvements in the leach cycle. Glamis operates the mine, in which
In the new year, Glamis intends to expand the Marigold’s Terry zone. Meanwhile, permitting for the remainder of the Marigold Millennium project, on the same property, is under way. The final feasibility study has been improved and should be released before year-end.
In other news, the Department of the Interior has overturned the decision that allowed the Bureau of Land Management (BLM) to deny Glamis’s plan of operations at the Imperial project, in southeastern California.
“We expect to hear from the BLM as to how the permitting process will be re-started for that project,” says McArthur. “I doubt that things will move rapidly as we have no idea what schedule the BLM has planned. Since we are focused on expanding the Marigold right now, we’re content to take a wait-and-see approach for Imperial.”
The project is envisaged as a run-of-mine heap-leach operation that would process simple, oxidized ores over 10 years. The initial capital investment is pegged at US$57 million, resulting in average annual production of about 120,000 oz. gold at a total cash cost of less than US$200 per oz. The deposit hosts proven and probable reserves of 86 million tonnes grading 0.55 gram gold per tonne.
Company-wide, Glamis expects to produce 230,000 oz. gold in 2001 at a total cash cost of US$170 per oz. Next year’s target is 255,000 oz. at US$172.
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