Dramatic increases in total fiscal year revenues, the largest in their 26-year histories, were reported by Silver King Mines, Inc. and Pacific Silver Corp.
The companies produced 49,358 ounces of gold at a direct production cost of $135.60 average per ounce of gold, "one of the lowest such figures in the gold industry," said Dan S. Bushnell, chairman of the two Salt Lake City-based gold producers. Bushnell said that, after adding royalties, depreciation, amortization and general administrative costs, "the figure still was only $205.14."Bushnell said the companies received approximately $10 per ounce more, on the average, in sales of gold as compared with selected producers. "Silver King and Pacific Silver received an average of $452 per ounce compared with $441 by major producers and $442 by smaller producers."
Silver King had revenue of $13.60 milllion for the fiscal year ended March 31 compared with revenue of $7.57 million a year ago. Pacific Silver 1988 revenue was $12.83 million compared with $6.61 million a year ago.
Bushnell said Silver King had 1988 net income of $6.04 million compared with a restated net loss of $117,873 a year ago. Pacific Silver reported 1988 net income of $5.62 million compared with a restated net of $996,284 a year ago. The restatement of 1987 figures reflected a Securities and Exchange Commission accounting requirement.
Silver King's 1988 earnings per share were 43 cents compared with a restated loss of less than one cent a year ago. Pacific Silver earnings were 34 cents compared with 7 cents a year ago.
The two companies have formed Alta Gold Co. and have placed their Robinson and Golden Butte gold properties into the new organization.
Pending Securities and Exchange Commission approval, Silver King and Pacific Silver will each receive 7 million shares of Alta Gold for distribution to their shareholders, Bushnell said. Each two shares of Silver King will receive one share of Alta Gold and each three shares of Pacific Silver will receive one share of Alta Gold.
Alta Gold, in turn, has entered into ventures with Echo Bay Mines and NERCO Minerals to explore, develop, mine and manage gold properties in Nevada and Colorado.
Bushnell said Alta Gold plans to pay a cash dividend of 10 cents per share annually amounting to $1.4 million total each year. The first 5 cent payment on 14 million shares of Alta Gold stock will be made at the time stock is distributed to Silver King and Pacific Silver shareholders.
Silver King and Pacific Silver will retain non-gold mineral properties in Nevada, Idaho, Oregon and California. Alta Gold will manage all gold and non-gold properties.
Bushnell noted that the annual gold production rate at the Robinson mine and mill near Ely, Nev., is expected to increase from 50,000 ounces to approximately 75,000 ounces with the addition of heap leaching.
Bushnell noted that fourth quarter production was 11,677 ounces of gold at a cost of $228 per ounce.
For the fourth quarter of fiscal 1988, Silver King reported totalrevenue of $3.34 million, net income of $694,035 and earnings per share of 5 cents compared with total 1987 fourth quarter revenue of $2.39 million, a restated net loss of $474,647 and a loss of 3 cents per share.
Pacific Silver fourth quarter 1988 total revenue was $2.78 million; net income was $2.47 million, and earnings per share 15 cents compared with 1987 figures of $3.08 million for revenue, $1.80 million for net income and 13 cents per share.