The Northern Miner, Volume 94 Number 12, May 12 - 18, 2008

Record quarterly revenue for Metallica

It looks like Metallica Resources (MR-T, MRB-X) is on a roll. Fast on the heels of its planned merger with New Gold (NGD-T, NGD-X) and Peak Gold(PIK-V, PIKGF-O), the Denver-based gold and silver producer is reporting record first quarter results at its Cerro San Pedro mine in Mexico.

Just a year after pouring its first gold there, production climbed 34% for gold and 18% for silver in the first quarter over the previous quarter, at a cash cost per oz. gold of about US$408, net of silver.

Now Metallica is reviewing its mine plans and timelines to see if it can raise production to 100,000 oz. gold a year.

The first quarter saw Cerro San Pedro churn out 18,290 oz. gold and 228,623 oz. silver. (Initial targets for the quarter were 19,107 oz. gold and 310,455 oz. silver.)

Revenues reached US$18.4 million on sales of 15,922 oz. gold and 203,973 oz. silver.

Roughly 22,000 recoverable oz. gold and 370,000 recoverable oz. silver were placed on the leach pad in the first quarter.

Preliminary cash costs per tonne of ore for the quarter were US$4.86, compared with a budget of US$5.50.

The Cerro San Pedro processing plant is operating at 100% capacity. The plant is currently producing about 200 oz. gold per day. Roughly 150,000 tonnes of ore are being placed under leach each week.

Cerro San Pedro has an estimated mine life of 10 years and is currently projected to produce an average of 89,000 oz. gold and 2.1 million oz. silver each year.

Metallica shares closed up 7¢ to $6.65 on the news. Over the last year its shares have traded between $3.62 and $6.99. The company has 93.2 million shares outstanding and no debt.