Westmin increases profit, plans gain

A sharp increase in net earnings was reported by Westmin Resources in its first quarter. Earnings reached $5.3 million compared to $1.6 million in the same period last year. Including a provision for preferred dividends, net earnings per common share amounted to 3 cents versus a 6 cents loss last year.

Gross operating revenues during the quarter totalled $47.4 million compared to $55.4 million in 1986. Cash flow was about $3.7 million lower at $12.2 million and working capital as of March 31, was $113 million.

Westmin sold its 28% interest in Lacana Mining in February for $34.6 million. The proceeds were used to reduce long-term debt and the $2.8- million gain on investment was reflected in the quarterly earnings, it says.

A 33% expansion of production (to 4,400 tons per day) is planned at the company’s H-W mine on Vancouver Island.Total cost is estimated at $24 million with about $7 million going towards underground development and $15 million for underground equipment, modifications to the mill and auxiliary systems.

The mill handled 3,257 tons of ore per day in 1986, its first full year of operation. While some modifications had to be made, the plant readily adapted to the treatment of complex new ores, notes Westmin. Meanwhile, stope preparation underground has involved the development of long-hole mining blocks in the central portion of the orebody adjacent to the current production area. In the meantime diamond drilling is under way in the north flank lenses and these zinc-rich mining blocks will probably be developed in 1987.

A feasibility study should be completed by mid-year for the company’s Silbak Premier and Big Missouri property near Stewart in northwestern B.C. Initial production is expected to be 80,000 oz gold and 560,000 oz silver. The capital cost of $62 million would be paid back in two years based on a gold price of $390(US) and $5.40(US) silver.