Homestake production climbs

Homestake attributed the higher output to better grade control and throughput at its Homestake mine in South Dakota, higher autoclave availability and recovery at the McLaughlin mine in California, the initial benefits of an expansion at the Round Mountain mine in Nevada, and the June acquisition of the El Hueso mine in Chile.

Homestake’s average cash production costs rose to $275 in 1988 from $270 in 1987. At the Homestake mine, cash production costs averaged $298 for the full year, a 9% drop from 1987 because of reduced stripping at the Open Cut, higher throughput, and the implementation of a better grade control program underground.

Costs at the company’s Round Mountain project jumped 15% to $248 per oz because of increased waste stripping which is part of a mine expansion program.

The stronger Australian dollar had an adverse affect on the performance of Kalgoorlie Mining Associates in which Homestake had a 48% interest during 1988. Lower grades also affected KMA’s cash costs which averaged $281 per oz during 1988, 42% above the 1987 level. Homestake noted that $33 of the total $83 rise was attributed to currency movements. — 30 — file: V:HOMESTK2

Homestake Mining (NYSE) reported net icome of $66.4 million or 68 cents per share in 1988 compared with $146.4 million or $1.51 per share a year earlier. The 1987 figure included a gain of $94.9 million from the sale of a minority interest in its Australian subsidiary, Homestake Gold of Australia.

Fourth quarter income was $15.8 million or 16 cents compared with $112 million or $1.15 in 1987 which includes the extraordinary gain. Without that gain, fourth quarter earnings were off 8%, reflecting lower realized gold prices.

]]>