Miramar writes down Con mine

Sustained low gold prices have forced Miramar Mining (MAE-T) to write down the carrying value of several mineral properties, including the Con gold mine in the Northwest Territories, to the tune of $16.8 million during the third quarter.

Before the write downs, Miramar earned $1.6 million (or 3cents per share) in the third quarter, compared with $3.4 million in earnings (6cents per share) for the corresponding period a year ago.

The third quarter earnings reflected an improvement in the operating results at the Con mine over the second quarter. Situated in Yellowknife, the Con mine produced 28,363 oz. gold during the third quarter at a cash cost of US$294 per oz. gold. This compares with 31,993 oz. at a cash cost of US$275 per oz. for the same period in 1996.

During the first nine months of 1997, Miramar produced 72,021 oz. gold from 293,466 tons of milled ore grading 0.29 oz. gold per ton, compared with 85,395 oz. from a milled 303,989 tons grading 0.3 oz. for the same period last year. Gold recovery averaged 83.7% for combined free-milling and refractory ores, down from 89.6% in the same period of 1996, reflecting lower-than-expected sulphide recoveries.

At the end of 1996, proven and probable reserves at Con stood at 3.5 million tons grading 0.33 oz., with a further possible reserve of 1.3 million tons grading 0.31 oz. Material still in the resource category is estimated at 1.7 million tons grading 0.22 oz.

For the first nine months of 1997, Mirimar posted a loss of $15.6 million (28cents per share) on revenue of $48.9 million, compared with earnings of $6.1 million (12cents per share) on $56.8 million in revenue for the same period in 1996. During last year’s fourth quarter, Miramar wrote down $37.5 million related to its investment in the Talapoosa gold project in Nevada and other mineral properties.

As of Sept. 30, Miramar had 56.7 million shares outstanding and working capital of $122.4 million.

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