Triton struggles through 1997

Increased gold production and revenue were not enough to keep Triton Mining (TTM-T) out of the red for the year ended Dec. 31, 1997.

Output at El Limon in Nicaragua, Triton’s only producing mine, jumped by one-third in 1997, to 48,594 oz. from 36,839 oz. in 1996, and cash costs fell to US$280 per oz. from US$344 oz. However, the company was forced to take a US$15.5-million writedown at El Limon and forfeited an investment of US$2.5 million when it decided to drop its pursuit of Inversiones Mineras, a Nicaraguan firm. Triton’s net loss last year weighed in at US$23 million (or 94cents per share) on revenue of US$15.8 million, compared with a loss of US$8.6 million (41cents per share) on revenue of US$13.7 million in 1996.

The low price of gold weighed heavy on the company, compelling it to reduce operating costs. To that end, Triton has halted work at its advanced-stage Manantial Espejo gold-silver project in Argentina following completion of a prefeasibility study, and is seeking a joint-venture partner. However, the company remains optimistic about the project’s potential, and has made its final US$1.5-million option payment to Barrick Gold. Triton now owns an 80% interest in the property, which hosts a reserve of 3.9 million tonnes grading 3.1 grams gold and 1.33 grams silver per tonne.

As a result of its weak cash position (the company’s coffers held US$1 million at year-end, compared with US$14.5 million at the end of 1996) and inability to further finance its projects, Triton announced that it would merge with Black Hawk Mining (BHK-T). The deal has yet to be approved by regulators or shareholders.

But not all is doom and gloom for the company. Production at El Limon is expected to rise to 55,000 oz. this year and cash costs are expected to drop to US$240 per oz. gold. Triton is also exploring the option of installing a less expensive electrical generator at El Limon, which, according to the company, could reduce costs to below US$200 per oz.