McWatters reports quarterly loss

With mining suspended at the Sigma-Lamaque open-pit gold mine in Val d’Or, Que., McWatters Mining (MCW-T) has posted a loss of $2.9 million (or 4 per share) on revenue of $13.2 million for the first three months of 2001.

In the corresponding period of 2000, the company earned $396,000 (nil per share) on revenue of $18.9 million. Cash flow from operations in the latest quarter amounted to $427,000, compared with $2.9 million a year earlier.

In the first quarter of 2001, total gold production totalled 28,304 oz. at a cash operating cost of US$255 per oz., down from 41,515 oz. at US$235 per oz. a year ago. Kiena poured 21,751 oz. at US$210 per oz., down slightly from 22,498 oz. at US$230 in the year-ago period.

Following the shutdown and the layoff of 120 workers, production at Sigma-Lamaque fell to 6,553 oz. at US$407 per oz., down from 19,017 oz. at US$242 per oz. in the first three months of 2000.

The company realized an average price of US$275 per oz. for its production, down from US$306 per oz.

In February, McWatters sold the balance of its hedging program (implemented in July 2000) for US$1.5 million. Of the proceeds, US$1.4 million was applied against the term loan and the secured debentures. McWatters has been granted protection under the company’s Creditors Arrangement Act to ensure the completion of a financial restructuring process.