While it reported a slight decrease in first-quarter profits recently, Hemlo Gold (TSE) continues to discuss the possibility of purchasing the gold assets of affiliate Noranda (TSE).
If Hemlo was to acquire Noranda’s interest in a number of projects including Freewest Resources’ (TSE) project at Harker Holloway, Ont., and Silidor mine in Quebec, they would provide an impetus for future growth, says Hemlo President John Harvey.
Hemlo’s Golden Giant mine at Hemlo, Ont., produced 105,479 oz. gold in the first three months of 1991, at an operating cost of US$144 per oz., compared with 99,357 oz. at US$138 per oz. in the same period last year.
However, it expects overall gold output to be down this year to 424,000 oz. from 441,300 oz. in 1990.
Hemlo’s average realized price in the first quarter was US$390 per oz., down from US$415 a year ago.
As a result, the company’s first-quarter earnings dropped slightly to $8.2 million or 9 cents a share from $9.1 million or 10 cents a share in the equivalent 1990 quarter. Revenues in the quarter were also down marginally to $47.5 million from $48.9 million last year.
Hemlo says its search for possible extension of the Golden Giant ore zone at depth has been unsuccessful so far. “The first hole encountered the Lower zone ore formation at about 800 metres below the current mining horizon but the zone did not contain significant mineralization,” the company said. Hemlo Gold is 50.8% owned by Noranda. Hemlo’s 87.6 million issued shares traded recently at $7.88 in a 52-week range of $15.25 and $7.38. Hemlo Gold (TSE) 3 months ended Mar. 31 1991 1990 Revenue $47,491 $48,891 Net earnings $8,228 $9,090
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