U.S. REPORT Atlas Gold loss resulted from battle with Blasius

A net loss of $1.92 million(US) or 65 a share was reported by Atlas Gold Corp. for the first fiscal quarter ended Sept 30. This compares with a net loss of $17,000 or 1 a year earlier. President Richard Weaver attributed the quarterly loss to “expenses incurred in connection with two unsuccessful consent solicitations and a terminated proxy solicitation conducted by Blasius Industries.”

These expenses totalled $2.7 million and included $1.66 million which Atlas agreed to pay Blasius for costs it incurred in the consent/ proxy battle. Atlas and Blasius have since terminated all litigation and the latter has agreed not to participate in any future proxy solicitation or purchase any more Atlas stock.

In the latest quarter, the company increased its Nevada reserves by 43% to 1.25 million oz, based on drill results from its Goldstone, Gold Ridge and Gold Pick deposits, Weaver said.

The expansion program at the company’s Gold Bar Mill in Eureka Cty., Nev. is on schedule and will double milling capacity to 3,000 tons per day; annual gold output from the company’s Nevada properties is expected to rise to over 80,000 oz, he pointed out.

During the first fiscal quarter, Atlas produced 14,308 oz gold from its Gold Bar mine which it sold for an average price of $428 per oz. Total revenues from gold mining operations in the period amounted to $6.1 million.

Weaver said that a new gold discovery on the company’s Grassy Mountain property in Oregon contains more than one million oz of gold in reserves grading 0.065 oz. By the end of the quarter, 37 holes had been drilled and “the deposit remains open in all directions,” he added.

“Atlas is continuing an accelerated drilling program on its Grassy Mountain property to delineate the parameters of the deposit, and to provide a data base for metallurgical and engineering feasibility studies.”

Reclamation work at its Moab, Utah uranium milling facility will take about seven years to complete and cost about $52.3 million. That cost was applied against 1987 earnings when the company terminated its uranium business.