Vancouver — Stronger gold and copper prices resulted in a more profitable second quarter for
The company earned US$33 million (or 8 a share) for the recent 3-month period, compared with US$58 million (15 a share) in the second quarter of 2003. This year’s quarterly earnings included a US$34-million charge from foreign-exchange losses on the Misima gold-silver mine in Papua New Guinea, where production was halted.
Placer expects to reach its overall production target of 3.6 million oz. gold for the year. Output in the recent quarter totalled 908,000 oz., compared with 905,000 oz. a year earlier. The average price realized in the recent period was US$386 per oz., versus an average spot price of US$393 per oz., and Placer reduced its hedge book by 310,000 oz., to 9.7 million oz.
Gold production in the first half of the year was boosted by the acquisition of the North Mara mine in Tanzania. Increased gold production at the Porgera and Henty mines in Papua New Guinea and Australia, respectively, partially offset the closure of the Golden Sunlight operation in Montana and reduced production from Kalgoorlie West and Granny Smith in Australia.
Weakness in the U.S. dollar against the foreign currencies in which it operates led to an increase in Placer’s costs. For the six months ended June 30, cash costs were US$230 per oz., up 7% from last year, and total costs were 4% higher at US$284 per oz.
Meanwhile, on the copper front, production rose by 4% to 218 million lbs., from the same period in 2003, owing to increased production from the Zaldivar mine. Stronger production in the first half of the year caused cash and production costs to fall 4% to 51 and 65 per lb., respectively.
At the Cortez Hills project in Nevada, high-grade gold was discovered by drilling west and downdip of known areas of mineralization. Cortez Hills is a joint venture in which
The new zone covers an area 1,800 by 1,000 by 400 ft. and is 350-2,000 ft. deep.
Placer’s share of the Cortez Hills resource is equivalent to about 9 million oz. gold.
Drilling at Cortez Hills is attempting to expand the resource, which is still open along strike to the south and down-plunge. A feasibility study will consider mine development and processing options.
Farther afield, in South Africa, Placer Dome is developing the South Deep Twin shaft. The company’s share of proven and probable gold reserves there is pegged at 27.9 million oz.
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