Hemlo gold helps Corona boost income

A net income of $593,000 (4 cents per share) has been reported by International Corona Resources for the three months ending Dec 31, compared with a net income of $387,000 (3 cents per share) for the same period a year earlier. Revenue during the quarter was approximately $7.3 million, attributed to the start of commercial production at the David Bell gold mine at Hemlo in northern Ontario.

At the David Bell mine, in which Corona has a 50% interest (Teck Corp. owns the other 50%), 85,006 tonnes of ore averaging 0.293 oz gold per tonne were milled at an average daily milling rate of 924 tonnes, during the 3-month period ending Dec 31.

The mill recovery of 93% for the quarter was lower than normal because of the nature of the development ore processed during the period, Corona reports. Recovery had risen to 97% by January of this year.

The Hemlo project has achieved its designed capacity of 1,000 tonnes per day. Mine revenues are expected to supply sufficient cash flows for the ongoing underground development, and a small cash surplus is projected for fiscal 1987.

Corona is projecting a target of 101,000 oz gold for the current fiscal year.

Corona also received approximately 2,450 oz gold (averaging 0.35 oz per tonne), and is expected to earn approximately 12,500 oz for the year, from its 25% share in the Hemlo quarter-claim optioned to Hemlo Gold Mines (formerly Noranda-Golden Giant mine).

The Ontario Court of Appeal ruling on ownership of the Williams mine at Hemlo is awaited. Corona was awarded the mine in March, 1986, in return for a payment of $154 million to Lac Minerals. The appeal was heard last November.

In related news, Royex Gold Mining, in which Corona has a 49% interest, reported a loss of approximately $1.4 million (5 cents per share) for the 3-mon th period ending Dec 31, compared with a loss of $742,000 (2 cents per share) for the same period a year earlier. Royex attributes the increased loss to the higher cost of financing the company’s growth.

In February of this year, Royex bought a 36% interest in Lacana Mining for $52.3 million, providing the company with an entry into precious metals mining in Nevada and Mexico, and oil, gas and industrial metals production in Canada.