While Reno-based Glamis Gold continues work on new mines in Mexico and Central America, activity closer to home acted as a brake on its financial results.
Production at the Marigold Mine 35 miles southwest of Winnemucca slumped during the first quarter, playing a role in a decline in production company- wide.
Glamis owns a two-thirds interest in Marigold Barrick Gold owns the remainder and Glamis' share of the mine's production totaled 17,026 ounces during the first quarter.
This compares with 22,153 ounces a year earlier.
And as the mine's costs were spread over fewer ounces, the average cash cost of producing an ounce of gold at Marigold rose to $248 an ounce from $170 in the first quarter of 2003.
Glamis executives told investors that the lower production was expected as Marigold employees move a large amount of waste rock to get ready for an expansion this year.
New equipment at Marigold is expected to rolling by the end of this month, and Glamis officials say the mine will be operating a full speed in the second half.
Five drilling rigs also are working around the mine as Glamis explores further gold deposits in the region.
Overall, Glamis reported production of 50,919 ounces of gold from its properties in Nevada, Mexico and Central America during the first quarter.
That's down from 61,292 ounces in the first quarter of 2003.
But higher gold prices and a profit on the sale of properties in Mexico allow Glamis to increase its net income over year-earlier figures.
The $9.1 million in profit it reported for the first quarter included a $7 million gain from the sale of its interest in two Mexican properties.Without that one-time gain, the company's quarterly profit would have lagged the $2.4 million in posted in last year's first quarter.
At the same time, Glamis sold gold at an average price of $408 during the quarter compared with $352 a year ago.
The cash costs of production rose, too, to $205 an ounce in the first quarter from $170 a year ago.
The decline in production and rise in costs both of which were labeled as temporary events by the company are setbacks from Glamis.
The company has said it plans to produce at least 600,000 ounces of gold a year at a cash cost of less than $150 an ounce by 2006.
Kevin McArthur, the company's president and chief executive officer, said some new mines are expected to come on line sooner than Glamis had expected, bringing that goal within reach.
The company's El Sauzal project, which will be the largest mine in Mexico, is expected to be producing gold by the end of this year.
Glamis projects it will produce about 35,000 ounces of gold this year.
In Guatemala, the company's Marlin project received all the major permits it needs.
Glamis purchased components from an existing mill facility and is moving them to the mine.
As a result, the company thinks it might begin operation at Marlin in late 2005 rather than early 2006 as it initially planned.
The Guatemala processing plant, the company said, will have excess capacity capacity that may be needed if some new discoveries pan out.
Those discoveries include a highgrade deposit about two miles away from the primary Marlin mine.
