Operating improvements boost Homestake’s take

Operating improvements at several mines enabled Homestake Mining (NYSE) to boost earnings and lower production costs during the first nine months of this year.

Net income of US$39.6 million was recorded for the period, compared with a net loss of US$148.5 million a year ago.

Gold production for the period rose slightly to 1.4 million oz. and cash operating costs were US$229 per oz., an 11% decline from year-to-date levels a year ago.

The improved earnings are attributed to three factors: lower production costs; lower administrative and exploration expenses; and higher gold prices. The 1992 loss reflects costs associated with the 1992 third-quarter acquisition of International Corona.

Improvements were made at the mine in South Dakota, where stringent grade control resulted in higher underground grades. This, in turn, increased production by 9% to 111,600 oz. in the third quarter of 1993. The higher grades, coupled with cost-cutting, decreased cash operating costs by 14% to US$267 per oz. for this quarter, compared with a year ago. Improved performances were also reported from the Williams mine in Ontario’s Hemlo camp, the McLaughlin mine in California and the Round Mountain mine in Nevada. Homestake expects to produce 1.8 million oz. gold this year. Cash costs so far have averaged US$229 per oz.

The company also has a 54% interest in the Eskay Creek gold deposit in British Columbia. A feasibility study allows the company to add 1.2 million oz. gold and 55 million oz. silver to proven and probable reserves (54% of the project’s total reserves).

The provincial government is allowing completion of the final 15 miles of the Eskay Creek access road.