Northgate cash balances earn $5.2 million in last quarter

Interest earned from Northgate Exploration’s (TSE) cash balances brought $5.2 million into the company’s treasury during the three months ended June 30.

Unaudited consolidated net income of $2,014,000 or 9 cents per share was reported in the first six months of 1988, compared to a consolidated loss of $1,165,000 or 7 cents per share last year.

Following the sale of its Chibougamau, Que., mining operations to Western Mining Corp. of Australia, the Toronto company has $160 million invested in treasury bills and other short term vehicles.

However, with metal production revenues down to a miniscule $497,000 in the second quarter from $10.1 million last year, Northgate’s total revenues for the three months ended June 30 were down by almost 50% to $5.6 million from $11.1 million in 1987.

The Chibougamau sale was also reflected in Northgate’s other second quarter results. For example, second quarter net income of $1,366,000 or 6 cents per share was a significant turnaround from a net loss of $1,241,000 (9 cents per share) reported at the same time in 1987.

On June 30, Northgate’s long term debt had increased to $53.7 million from $28 million in the first half of 1987 due to the sale of a $40 million debenture to finance the acquisition of a 20% equity stake in Campbell Resources (TSE).

Northgate recently spent $22 million for all the shares of ABM Mining Group which owns approximately 45% of the equity and approximately 88% of the voting shares of ABM Gold Corp.

Through ABM Gold, Vancouver- based ABM Mining holds varying interests in a number of public companies. They include a 32.5% stake in Sonora Gold Corp. (TSE) and a 15% net operating profits interest in the Jamestown mine in California. In the first three months of 1988, the Jamestown operation produced 20,600 oz gold at a cost of $344(US) per oz.

In a separate transaction, Northgate spent $12.4 million to acquire four million or 20% of Sonora’s treasury shares. Sonora will use the funds to reduce costs at the operation.