Good year for Lac, earnings nearly triple

Last year proved to be a good one for Lac Minerals of Toronto, with the company’s earnings almost tripling compared with 1986.

A 9% increase in production, a higher gold price and higher interest income are the main factors cited by the company for the strong performance.

Lac recorded earnings of $38.7 million in 1987, compared with a gain of $13.9 million (before extraordinary items) and a restated loss of $21.2 million (after extraordinary items) in 1986. Revenues for 1987 totalled $200.6 million compared with $154.8 for the year before.

Earnings per share (which reflect a three-for-one stock split in September, 1987) were 44 cents last year, compared with a gain of 16 cents (before extraordinary items) and a restated loss of 25 cents (after extraordinary items) in 1986. (Lac’s reported earnings for 1986 have been restated and an extraordinary charge has been recorded to reflect the trial judgment of the Supreme Court of Ontario with respect to the Page-Williams mine at Hemlo, Ont., which was awarded to International Corona Resources. The court’s decision was subsequently upheld by the Ontario Court of Appeal. Lac has been granted leave to appeal the rulings to the Supreme Court of Canada.)

Revenue during the fourth quarter ending Dec 31, totalled $52.2 million compared with $43.5 million for the same period in 1986. Lac had close to 92 million shares outstanding at the end of 1987.

“Lac had one of its strongest years in 1987 with each of the company’s operating mines showing a substantial increase in gold production,” President Peter Allen said, adding that the company started the $60-million development of the Bousquet No 2 mine in northwestern Quebec, as well as the $16-million mill project at the producing Mascassa mine and development of the Lake Shore tailings, both at Kirkland Lake, Ont.

Gold production in 1987 was 305,817 oz, up from 280,749 oz the year before. Gold deliveries were 301,933 oz at an average price of $449(US) per oz, compared with 280,583 oz at an average price of $346 in 1986.

Average cash operating cost in 1987 was $235 per oz compared with $231 the year before.