Giant takes $48.5 million writedown

A $48.5-million writedown on the carrying value of its assets resulted in a massive loss for Giant Yellowknife Mines (TSE) last year. For the 12 months ended Dec. 31, the gold producer lost $51.2 million ($6.09 per share) compared with $189,000 (2 cents per share) in 1989. Writedowns on assets included: the tailings treatment plant in Yellowknife, N.W.T., which has been closed indefinitely; the Schumacher mill in Timmins, Ont., which was permanently shut down; obsolete spare parts inventory at both mines; deferred mineral exploration and development costs; and certain non-producing resource properties. The 1990 loss was also a result of a reduction in proceeds from the company’s forward-selling programs for gold, Giant Yellowknife reports. The day the results were announced, Giant Yellowknife shed $1 to close at $5.50. On the bright side, cash costs at the company’s gold mines dropped to US$395 from US$424 in 1989, a result of cost-cutting measures by Giant’s new manager, Royal Oak Resources (TSE). Gold production dropped slightly from 198,013 oz. in 1989 to 196,705 oz. in 1990. Giant continues operations at its Hoyle mine and surface pits at Timmins and Giant mine in Yellowknife, with limited production from the Pamour No.1 mine at Timmins. Giant Yellowknife Mines (TSE) 12 months ended Dec. 31 1990 1989 Revenue $104,243 $119,505 Net earnings (loss) (51,222) (189) per share (6.09) (0.02)