Black ink turned to red for Piedmont Mining (NASDAQ) in its third quarter ended Sept 30. The company reported a loss of $411,925(US) for the period, pushing 9-month results into a loss of $399,583 or 3 cents per share.
The company cited a 16% drop in gold prices as well as exploration costs of $420,000 and environmental/reclamation costs of $400,000 as the principal reasons for the loss.
Piedmont operates the Haile heap leach gold mine near Kershaw, S.C., producing 11,006 oz gold for the 9-month period. A total of 284,000 tons of material grading an average of 0.05 oz per ton was added to the leach pads during the period.
Boding well for future profitability, the company plans to begin mining from a new zone containing 165,000 tons grading 0.085 oz per ton with a strip ratio of 1:1. Leach tests on the material indicate that gold recoveries will exceed 90%.
Piedmont also purchased a $52,500 option giving it the right to buy all the assets of MMC Holding for $3.5 million.
The option has a 6-month life which can be extended a further six months at a cost of $70,000. MMC is Piedmont’s mining and hauling contractor at Haile. It also holds the mining lease under which it receives a 3% royalty on a portion of the gold production to a maximum of $100,000. MMC produces about 14,000 tons of sericite a year which the company sells at $72-150 per ton depending on grade.
Piedmont’s major shareholder is Corona Corp. (TSE), which holds 11.4% of the 14.3 million issued shares. The company has no debt and $3.3 million in working capital.
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