Third-quarter earnings of Royal Oak Mines (TSE) reflect problems at the company’s three Canadian gold mines, particularly the Hope Brook operation in Newfoundland.
The company said both tonnage and grade were below budget in the quarter ended Sept. 30. As a consequence, cash costs on a per-ounce basis increased by 3% to US$321 from the second quarter, and were nearly 6% higher than in the third quarter of 1992.
Royal Oak noted, however, that production of more than 25,200 oz. in October (302,000 oz. annually), showed a marked improvement, as technical problems are being resolved.
The company produced 66,408 oz. from its three operations during the third quarter, slightly above the 65,287 oz. produced in the comparable period in 1992.
Production for the first nine months of this year totaled 202,405 oz. at an average cash cost of US$313 per oz., compared with 164,006 oz. at an average cash cost of US$307 a year earlier.
The company’s net earnings for the 9-month period were $8.5 million, compared with $9.3 million in the first nine months of 1992.
Some new developments were announced regarding the prolonged and bitter labor dispute at Royal Oak’s Giant mine at Yellowknife, N.W.T. Several union members were charged with various offences related to the strike, including a union member charged with the deaths of nine miners during an explosion in September, 1992.
In recent months, the Canada Labor Relations Board became involved and required Royal Oak to make an offer to the union. The company responded by tabling the same offer made before the labor dispute began, less a number of outstanding issues.
Union members accepted that offer by about 96%. Nevertheless, the union and the company were not able to agree on four outstanding issues. Both sides are now required to make submissions to a panel which will resolve the issues through binding arbitration.
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