Ta­hoe hit by losses

But the com­pany’s strength con­tin­ues to be its mining op­er­a­tions in Tim­mins

The Daily Press (Timmins) - - NEWS - Len Gillis

like other gold com­pa­nies across the North, the third quar­ter of 2018 was not kind to Ta­hoe re­sources inc., the par­ent com­pany for Ta­hoe Canada which op­er­ates the Tim­mins West mining com­plex and the bell Creek mine and mill in Tim­mins.

The com­pany has re­ported a third quar­ter earn­ings loss of $190 mil­lion, which com­pares with a loss of only $8.4 mil­lion for the same pe­riod last year. This rep­re­sents a $0.61 loss per share.

in the year-to-date col­umn, this means Ta­hoe earn­ings are at a loss of $212.4 mil­lion to the end of septem­ber 2018. This com­pares with a year-to-date earn­ings for this time last year, when the com­pany had a pos­i­tive po­si­tion at $99.8-mil­lion.

Com­pany ex­ec­u­tives spoke about the re­sults dur­ing a con­fer­ence call held Wed­nes­day morn­ing.

Jim voorhees, the pres­i­dent and Ceo of Ta­hoe, said a ma­jor part of the Q3 loss was due to the $170-mil­lion non-cash im­pair­ment the com­pany had be­cause of the forced shut­down of Ta­hoe’s huge es­cobal sil­ver mine in Gu­atemala.

also on the call was el­iz­a­beth mcGre­gor, Ta­hoe’s vice-pres­i­dent and chief fi­nan­cial of­fi­cer. she ex­plained that the “ad­justed loss” took in ac­count the non-cash im­pair­ment.

“Ta­hoe re­ported a loss for the quar­ter of $190 mil­lion or $0.61 per share, re­flect­ing $170 mil­lion non-cash im­pair­ment at es­cobal and our on­go­ing care and main­te­nance costs. ex­clud­ing the im­pair­ments, the com­pany re­ported an ad­justed loss of $19.4 mil­lion or $0.06 per share,” she said

The supreme Court in that coun­try sus­pended the mining li­cences in re­sponse to a claim from an anti-mining group that said Ta­hoe did not con­sult with indigenous peo­ples in that coun­try.

de­spite the prob­lems at the sil­ver mine, the com­pany’s gold out­put was also down in the third quar­ter. Ta­hoe pro­duced 91,000 ounces in Q3 of 2018 com­pared with 109,000 ounces pro­duced in Q3 of 2017, said the com­pany news re­lease.

also, re­gard­less of the thirdquar­ter loss, voorhees said Ta­hoe is mov­ing ahead in the fourth quar­ter.

“The com­pany re­mains on track for its full year 2018 guid­ance near the low end of pro­duc­tion and the high end of costs,” he said.

This is partly be­cause of the near com­ple­tion of the $80-mil­lion shaft ex­pan­sion at the bell Creek mine in Tim­mins which will po­si­tion the com­pany for a much im­proved fourth quar­ter.

voorhees also specif­i­cally men­tioned the Tim­mins op­er­a­tions.

“at bell Creek, i’m pleased to share that con­struc­tion of the shaft is nearly com­plete. We ex­pect to be­gin skip­ping there in the com­ing weeks. our in­vest­ment over the past two years will start to quickly pay div­i­dends and we ex­pect to see higher pro­duc­tion and con­tri­bu­tion from bell Creek in the fourth quar­ter. i’m very ex­cited about what this shaft is go­ing to al­low us to achieve with our op­er­a­tions in terms of ef­fi­ciency at depth and po­ten­tial up­side as a re­sult of that in­vest­ment,” he said.

The news re­lease also out­lined the in­vest­ment the com­pany has made in the Tim­mins op­er­a­tion in the past two years.

“The com­pany now es­ti­mates the shaft pro­ject will be com­pleted within 10% of the orig­i­nal $80 mil­lion guid­ance with the ma­jor­ity of the in­crease over guid­ance driven by hoist elec­tri­cal in­stal­la­tion and cer­tain in­di­rect costs through the end of the year. ap­prox­i­mately $82.5 mil­lion has been spent through sept. 30, 2018 ($11.1 mil­lion spent in Q3 2018), ex­clud­ing cap­i­tal­ized in­ter­est. The com­pany has com­mit­ted $5 mil­lion, which is sub­stan­tially all of the re­main­ing costs for the pro­ject.”

voorhees said he was proud of the ef­fort put in by the team at bell Creek.

“i am very proud of what the team has ac­com­plished in Canada and some of you heard me say be­fore al­most all the work was done with our in-house ex­per­tise us­ing a few out­side con­trac­tors. This has helped us keep costs of the pro­ject to a min­i­mum and at this point, all cap­i­tal has now been spent or com­mit­ted,” he said.

voorhees also spoke about ex­plo­ration work that he said is con­tin­u­ing at all Ta­hoe gold op­er­a­tions, which in­cludes the mines in Peru and Canada.

“in Canada and Tim­mins West, we con­tinue to fo­cus our ef­forts on the Gold river trend. We’ve com­pleted about 42,000 me­ters of in­fill and ex­ten­sional drilling there this year and met­al­lur­gi­cal and geotech­ni­cal sam­ples have been col­lected and are at var­i­ous stages of test­ing. ini­tial met tests of re­frac­tory sam­ples have yielded fa­vor­able re­sults that we are cur­rently an­a­lyz­ing,” said voorhees.

“at the bell Creek, we have three drills run­ning with a fo­cus on strike in depth ex­ten­sions of the Na, Na2, Nb, Nb2 and hang­ing all six zones from un­der­ground drill sta­tions. We con­tinue our ge­o­logic anal­y­sis on re­cent re­sults and we have more drilling planned for the fourth quar­ter. We’re en­cour­aged by the re­sults so far and ex­pect that the shaft pro­ject will pay div­i­dends at bell Creek well into the fu­ture,” he added.

HaND­OuT/THE DAILY PRESS

Ta­hoe Re­sources said de­spite the loss the com­pany had in the third quar­ter of 2018, it is ex­pect­ing to meet its guid­ance plans for the year and the com­ple­tion of the $80 shaft up­grades at the Bell Creek Mine will con­trib­ute to that.

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