ECU second-quarter results
ECU Gold Mining Company Inc ECU
Shares issued 40,219,832 Aug 30 close $0.22
Tue 31 Aug 99 News Release
Mr. Andre St-Michel reports
ECU continued its progress during the second quarter of the year.
Therefore, with respect to the first quarter of 1999, the company recorded
increases of 8 per cent in silver production and 10 per cent in gold
production. In addition, the company is pleased to note that the constant
efforts it has put into monitoring operations continue to give significant
results in terms of reduction in direct operating costs.
Results of operations
During the second quarter of the fiscal year, the company produced 82,960
ounces of silver and 965 ounces of gold, compared with 65,985 ounces of
silver and 455 ounces of gold in 1998. For the first six months of 1999,
production was 159,568 ounces of silver and 1,840 ounces of gold, as
opposed to 106,100 ounces of silver and 1,092 ounces of gold for the same
period in 1998. The number of tonnes milled was 37,767 and 71,123
respectively, for the second quarter and first quarter of 1999, as compared
with 29,996 and 47,181 tonnes in 1998.
For the three-month period ending June 30, the company continued efforts to
control its operating costs. As a result, direct operating costs (mining
and milling) were kept at $17.49 (U.S.) per milled tonne, as compared with
$19.93 (U.S.) for the same period in 1998. For the first quarter of 1999,
these costs were $18.59 per milled tonne, as opposed to $28.02 (U.S.) for
the same period in 1998. The operating cash cost was in deficit by $43,739
(U.S.) during the second quarter, as compared with $34,819 (U.S.) in 1998.
For the first six months of the year, the operating cash cost was in
deficit by $85,083 (U.S.), as opposed to $211,030 (U.S.) in 1998.
Sales of precious metals returned $616,929 (U.S.) in the second quarter of
1999, as opposed to $562,912 (U.S.) for the corresponding period in 1998.
For the first half of the year, sales returned $1,236,857 (U.S.), as
opposed to $900,079 (U.S.) in 1998. For this period, the company obtained
an average sale price of $5.11 (U.S.) per ounce of silver and $266 (U.S.)
per ounce of gold, a significant reduction compared with the average prices
obtained during the same period in 1998, that is, $5.41 (U.S.) per ounce of
silver and $294 (U.S.) per ounce of gold. For the first half of the year,
the average sale price was $5.17 (U.S.) per ounce of silver and $275 (U.S.)
per ounce of gold, as opposed to $5.70 (U.S.) and $299 (U.S.) in 1998.
In spite of the increase in the number of ounces produced between the first
and second quarters of this year, the drop in the average sales price per
ounce of silver and of gold (3 per cent and 7 per cent, respectively) had
the effect of decreasing revenue from the sale of precious metals by more
than $30,000 (U.S.). In addition, a major breakdown caused by a lightning
strike on the main transformer of the mine resulted in a significant
decrease in supply of high-grade ore to the mill, therefore decreasing
production of ounces of gold and silver.
For this quarter, the net loss of $494,037 (Canadian) or one cent per share
for its second-quarter as opposed to a net loss of $230,521 or one cent in
1998. During the first quarter of 1999, the net loss amounted to $843,292
(Canadian) or two cents per share, as opposed to a net loss of $598,701 or
two cents per share in 1998. The increase in loss in the first quarter of
1999 with respect to the one recorded in 1998 is explainable, in part, by
the increase in salaries and benefits and administrative expenses in
Mexico, where the company had not yet reached cruising speed in 1998.
Moreover, the company was subjected to significant variations in exchange
rates with respect to the first quarter of 1998, increasing the loss from
the first quarter of 1999 all the more.
HIGHLIGHTS
Three months ended June 30
1999 1998
Production
Tonnes milled 37,767 29,996
Ounces produced
Silver 82,960 65,985
Gold 965 455
Average sales price
($US)
Silver $ 5.11 $ 5.41
Gold $266.00 $294.00
Direct operating
costs ($US per
tonne milled) $ 17.49 $ 19.93
Financial results
Sales of precious
metals ($US) $616,929 $562,912
Net loss ($CAN) $494,037 $230,521
Net loss per
share 1 cent 1 cent
HIGHLIGHTS
Six months ended June 30
1999 1998
Production
Tonnes milled 71,123 47,181
Ounces produced
Silver 159,568 106,100
Gold 1,840 1,092
Average sales price
($US)
Silver $ 5.17 $ 5.70
Gold $275.00 $299.00
Direct operating
costs ($US per
tonne milled) $ 18.59 $ 28.02
Financial results
Sales of precious
metals ($US) $1,236,837 $900,079
Net loss ($CAN) $843,292 $598,701
Net loss per
share 2 cents 2 cents
Outlook
The company's objective is still to initiate commercial production at
Velardena at the beginning of the Year 2000. Currently, management of the
company, as well as staff in Mexico, are continuing work to gradually
increase the tonnage and grade of ore processed at the mill to ensure
constant growth of revenue during the coming months.
(c) Copyright 1999 Canjex Publishing Ltd. canada-stockwatch.com
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