U.S. REPORT Sonora writes down Jamestown mine stake

Toronto-based gold miner Sonora Gold (TSE) was forced to break out the red ink again in 1990 after declaring a $17.4-million writedown on its investment in the Jamestown mine in California. Sorona, which holds a 70% joint venture interest in the mine, reported a net loss of $26.7 million or $1.32 per share for the year ended Dec. 31 on revenues of $31.3 million. In 1989 the company reported a loss of $2.2 million or 11 cents per share on revenues of $35.6 million.

Sonora says the writedown was necessary because of low gold prices and the low-grade ore that is being extracted from Jamestown’s main Harvard pit. In 1990 the mine yielded 101,700 oz., at an average cost of US$337 per oz. compared with 111,300 oz. at a cost of US$267 in 1989.

In a bid to reach deeper high-grade sections of the Harvard pit, the joint venture is completing an accelerated stripping program which should lead to higher production this year.

Sonora Gold is a 42% owned affiliate of NorthWest Gold (AMEX), which in turn is owned 50% by Northgate Exploration (TSE) of Toronto. Sonora Gold (TSE) 12 months ended Dec. 31 1990 1989 Revenue $31,311 $35,665 Net earnings (loss) (26,662) (2,192)

Per share (1.32) (0.11)