Non-recurring charges totalling US$53.1 million during 1990 pushed year-end results into the red for Pegasus Gold (TSE). The company reported a loss of US$38.2 million for the year compared with earnings of US$9.7 million in 1989. The charges include property writedowns totalling US$35.1 million and investment losses of US$18 million.
The property writedown was primarily the result of the writeoff of the entire US$34-million book value of the Basin Creek heap leach gold mine in Montana.
During 1990, mining and exploration indicated the deposit was lower grade and was not as continuous as expected. Despite changes to the initial design and operating practices at the mine, it continued to operate at a loss and as a result, mining operations were suspended.
The investment writedown is related to Pegasus’ holding in Pioneer Metals and Inland Gold and Silver which were carried at US$8.5 million and US$4.3 million respectively.
Despite the closing of Basin Creek and the completion of the mine life at Relief Canyon in Nevada, gold production dropped only slightly to 332,600 oz. from 341,400 oz. in 1989.
Cash operating costs dropped US$7 per oz. to US$217 per oz. at the company’s four remaining operations. *Pegasus Gold 3 months ended Dec. 31 1990 1989 Revenue $42,364 $40,955 Net earnings (loss) (44,473) 1,996
per share (1.81) 0.08 12 months ended Dec. 31 1990 1989 Revenue $169,579 $178,362 Net earnings (loss) (38,172) 9,763
per share (1.55) 0.41
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