Low Silver Price, High Costs Boost Sunshine Loss

While the future of the Sunshine Mining and Refining Co. looks brighter, the company and its silver mine reported deeper losses for the third quarter than last year.

Boise-based Sunshine lost $7 million in the third quarter compared with a loss of $2.9 million for the same quarter in 1995.

Declining silver prices and increased exploration and development costs contributed to the loss. Sunshine is mining the West Chance ore body using a new ramping system, and much of that development work has been completed, the company reported Tuesday.

Sunshine expects production at the Sunshine Mine in Idaho’s Silver Valley to reach nearly 1 million ounces in the current quarter, driving its costs down. The Sunshine could produce as much as 5 million ounces of silver in 1997, the company predicts.

Sunshine continues to develop its Pirquitas silver and tin mine in Argentina, spending $2.6 million for overall exploration.

While the cost of pulling silver out of the Sunshine Mine should fall to around $4 an ounce, the company will not become profitable with silver prices where they are unless the Pirquitas mine or other developmental projects begin production. The company continues to outline the large silver and tin deposit at Pirquitas.

For the first nine months of the year, Sunshine earned $19.3 million, mostly from a $40 million gain on the retirement of its preferred stock shares. Before that gain, the company had lost $18.2 million.

, DataTimes