Homestake Mining Company Reports Third Quarter 1995 Results

Homestake Mining Company reported a net income of $4.9 million or 4 cents per share for the third quarter of 1995, down from $10.8 million or 8 cents per share in the same period of 1994. The decline in earnings was due to a temporary production decline at the Kalgoorlie operations in Western Australia, lower ounces produced at certain operations in the United States, and a higher effective tax rate. Despite the temporary production decline, Homestake's 1995 third quarter revenues increased to $181.4 million from $167.0 million in the third quarter of 1994, primarily due to higher gold sales volumes.

The company produced 453,400 ounces of gold in the 1995 third quarter, a 40,900 ounce increase from the third quarter of 1994, mainly due to production from the new Eskay Creek mine in Canada. The new Fimiston mill was commissioned in August 1995, increasing milling capacity at the Kalgoorlie operations by approximately one million tons per year.

Key Takeaways:

Homestake Mining Company's net income for the third quarter of 1995 was $4.9 million or 4 cents per share, down from $10.8 million or 8 cents per share in the same period of 1994.
The decline in earnings was due to a temporary production decline at the Kalgoorlie operations in Western Australia, lower ounces produced at certain operations in the United States, and a higher effective tax rate.
Homestake's 1995 third quarter revenues increased to $181.4 million from $167.0 million in the third quarter of 1994, primarily due to higher gold sales volumes.
The company produced 453,400 ounces of gold in the 1995 third quarter, a 40,900 ounce increase from the third quarter of 1994, mainly due to production from the new Eskay Creek mine in Canada.
The new Fimiston mill was commissioned in August 1995, increasing milling capacity at the Kalgoorlie operations by approximately one million tons per year.
Cash costs, including the costs of third-party smelters, were $187 per equivalent ounce during the third quarter.
At the Homestake mine, production was hampered during the third quarter by the processing of harder than normal ore from the open pit.
Steps have been taken to increase mill throughput and production is expected to return to more normal levels in the fourth quarter.
McLaughlin mine third quarter production was slightly higher than in the prior year due to slightly higher grades, but lower than originally forecast.
Round Mountain production declined due to lower grades and volumes of ore placed on the leach pads earlier in the year.
The company's income and mining tax rate was 48% for the first nine months of 1995, compared to 24% for the comparable period of 1994.
Net income for the first nine months of 1995 was $22.7 million or 16 cents per share, compared to $68.0 million or 49 cents per share for the corresponding period of 1994.

Statistics:

453,400 ounces of gold produced in the 1995 third quarter
40,900 ounce increase in gold production from the third quarter of 1994
$181.4 million in third quarter revenues, up from $167.0 million in the third quarter of 1994
$187 per equivalent ounce cash costs during the third quarter
48% income and mining tax rate for the first nine months of 1995
$22.7 million net income for the first nine months of 1995
16 cents per share net income for the first nine months of 1995

Sources:

Business Wire - Homestake Mining Company Reports Third Quarter 1995 Results
Homestake Mining Company - David W. Peat, 415/981-8150