Belmoral seeking rescuer after $34.5 million loss

Efforts to rescue Belmoral Mines (TSE) from its financial troubles were continuing as the company revealed recently it had lost $34.5 million (91 cents per share) during the year ended Dec. 31. While Chairman Ken Dalton was involved in discussions with possible suitors, a spokesman said the company should be able to obtain an extension on the time it has to pay off debts totalling $8 million.

Belmoral has been getting monthly extension on a $4-million loan from Aur Resources (TSE), which recently elected not to proceed with plans to purchase up to 47% of the company. A $4-million loan from Central Capital Corp. of Toronto is also due this month.

Belmoral spokesman Harry Tompkins declined to say to whom Dalton is talking. Asked about the company’s difficulties, he replied: “It’s a tough ball game but our expectations are that we will come through.”

“We hope to find either a senior partner or sufficient financing to see us through the crisis,” said Tompkins who predicted that Belmoral may be in a position to make an announcement this week. Anyone who comes to the rescue will assume responsibility for a company that has been bleeding badly for the past couple of years. In 1988, Belmoral reported a loss of $7 million or 18 cents per share after declaring a $6.5-million writedown on investments.

Tompkins attributed the 1989 results to operating problems at the Ferderber and Dumont gold mines in Val d’Or, Que., and to a $23.2- million writedown on investments in Roddy Resources (TSE), Vedron (TSE) and projects held by Broulan Resources (TSE).

Belmoral’s gold output from the two mines and a royalty interest in NSR Resources’ (TSE) Rand- Malartic gold property dropped for the second year in a row to 39,200 oz. from 45,174 oz. As a result, revenues also declined to $18 million from $25.6 million a year earlier.

The company reported a fourth- quarter loss of $12.5 millon or 31 cents per share, compared with a loss of $8.9 million or 23 cents per share in the equivalent period last year. Fourth- quarter revenues dropped to $2.8 million from $5.3 million in 1988.

While Belmoral has repeatedly written off its interests in a number of companies including Roddy, Vedron and Wrightbar Mines (ME), 1989 marked the end of its financial commitments to several exploration programs.

Unfortunately, most of the projects did not live up to our expectations, resulting in the significant writedown of asset values and we are now concentrating on our core assets in Quebec.

Those assets include a 40.5% stake in Yorbeau Resources (TSE) as well as a right to earn 50% of Yorbeau’s 546-acre Astoria property south of Rouyn-Noranda, Que., where high-grade gold values have been reported in the AW zone.

Preliminary reserves in the AW zone stand at 400,000 tons of grade 0.26 oz. gold per ton, but recent results from the 1,000- to 1,500-ft. level suggest that those reserves could be increased.

Tompkins said the Ferderber mine, which produced 29,184 oz. last year, is producing some positive cash flow. “We hope to arrange financing before any further difficulties arise,” he said. There are currently just under 45 million shares of Belmoral issued and outstanding. They were trading recently at 43 cents. Belmoral Mines (TSE) $000s except per-share items Year ended Dec. 31 1989 1988 Revenues $18,023 $25,643 Net earnings (loss) (34,581 ) (7,009)

per share (0.91 ) (0.18)004