By producing their own gold, royalty sisters
During the quarter ended June 30, the two companies jointly cranked out just under 110,000 oz. gold and 1.1 million oz. silver from their equally owned Ken Snyder gold mine in Nevada. The output, which cost a total of US$134 per oz. to produce, represents the first full quarter’s worth since the mine began pouring gold in December 1998 and puts the operation on track to exceeding its fiscal 1999 production target of 250,000 oz.
gold-equivalent.
For the quarter, Franco-Nevada recorded net earnings of $14.9 million (or 19 cents per share) on record revenue of $29.8 million, compared with $10 million (or 13 cents per share) on $17.4 million in the corresponding period of 1998. Also contributing to the better performance was a slight increase in revenue from the Betze-Post royalty, plus a more substantial 31% and 18% gain, respectively, from the Stillwater platinum mine royalty and the oil and gas division.
On the exploration front, Franco increased by 33% resources at its Hemlo gold property in the namesake gold camp of northern Ontario. The resource, pegged at
9.8 million tonnes grading 7.41 grams gold per tonne by independent consultants Watts Griffis & McOuat, represents the downdip extension of the Williams mine of
Those companies have a 6-month right of first refusal on the project and are currently reviewing the data.
Meanwhile, Euro-Nevada posted record net earnings of $10.6 million (or 10 cents per share) on record revenue of $26.6 million, up 82% and 120% from the year-ago period. The recent period, however, was affected by an 8% drop in production from the Meikle mine royalty and lower revenues from several other royalty properties that are susceptible to the price of gold.
On June 30, Franco had $526.7 million in working capital and Euro, $477.52 million. If the two companies amalgamate, as has been proposed (T.N.M., July 15/99), they would become the world’s fifth-largest gold company, with one producing mine and more than 60 royalties spanning six countries with direct or royalty land interests exceeding 2 million ha.
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