River Gold boosts profits

River Gold Mines (RIV-T) continues to prosper from mining two small deposits in the Wawa area of northern Ontario.

In 1998, the junior miner earned $7.5 million (or 24 cents per share) on revenue of $38.7 million, compared with $3.9 million (13 cents per share) on $34.7 million in the previous year.

Cash flow between the periods rose to $13.3 million from $9.6 million; gold production climbed to 88,500 from 75,500 oz.; and cash costs fell to US$174 from US$211 per oz. The company sold its gold for US$294 per oz. in 1999, or $33 less than that realized in the previous year.

River owns and operates the Eagle River mine and periodically mines the Edwards orebody of Vencan Gold (VCG-M) in return for half of that project’s profits. The company also owns the nearby Mishi deposit, which is 2 km from its Eagle mill and scheduled to enter production sometime this year.

At year-end, proven and probable reserves at Eagle River stood at 1.3 million tonnes grading 10.38 grams gold per tonne, whereas those at Edwards totalled 146,000 tonnes grading 18 grams gold. Reserves at the Mishi deposit are pegged at 1.4 million tonnes grading 4.26 grams, nearly half of which is amenable to open-pit mining.

Capital expenditures at Eagle River totalled $8.3 million in 1998, and another $9.3 million is earmarked for the current year. Of this year’s amount, more than half will go toward extending the shaft from the 70- to 640-metre levels. The orebody is accessible by a ramp.

By mid-year, River expects to expand its daily milling rate to 900 tonnes. The extra capacity is expected to improve recovery rates and lower overall operating costs.

River expects to produce 100,000 oz. in 1999. It started the year with an inventory of 198,000 tonnes of broken and stockpiled ore.

River has declared a dividend of 4 cents for 1998, marking the third consecutive year in which it has done so. This year’s payment is 1 cents higher per share than that given in 1997.