Westmin posts first-half loss despite lower operating costs

Despite reductions in operating costs, Westmin Resources (TSE) reported a net loss of $5.85 million in the 1991 second quarter after preferred dividends, and a net loss of $11.03 million in the 1991 first half after preferred dividends.

This compares to a modest loss of $657,000 in the 1990 second quarter and net earnings of $1.28 million in the 1990 first half.

Cash flow for the quarter ended June 30 fell sharply to $661,000 from $6.8 million recorded last year. The decline was attributed to lower metal prices and grades, and a stronger Canadian dollar which affected Myra Falls operations.

Westmin noted, however, that operating costs at the Myra Falls polymetallic mine near Campbell River, B.C., were reduced to $62.22 from $72.92 per tonne during the recent quarter.

This was attributed to the conversion of the operation to long-hole mining, as about 60% of ore came from this method by June.

Unit costs were also down at the Premier gold operation near Stewart, B.C., as a result of workforce and milling rate reduction put into effect earlier this year. Westmin said Premier operated with a positive cash flow for the last two months of the recent quarter.

Westmin has been reporting encouraging results from ongoing drilling of the Myra Falls Gap discovery, the strike length of which is now reported to exceed 140 metres.

A decision was recently made to reach the high-grade zone from the 18 level in the H-W mine. This development work has started, and three exploration drills are still active on the zone.