Sunshine Reduces Its Losses

Boise-based Sunshine Mining & Refining Co. posted slightly smaller losses in the fourth quarter of 1996 compared with the same period last year, and ended the year in the black thanks to the conversion of some preferred stock.

For the quarter, Sunshine lost $6.7 million, compared with a loss of $6.9 million in the fourth quarter of 1995.

For the year, Sunshine made $12.6 million, thanks mostly to a $40 million gain from converting preferred stock into common stock. In 1995, the company lost $25.6 million.

During this decade the company has lost more than $200 million because of high costs at its Sunshine Mine - the company’s only working mine - and because of low silver prices.

The company’s bold experiment at its Sunshine Mine in Idaho’s Silver Valley appears to be lowering costs there, though not enough to become profitable at this time.

Instead of waiting for silver prices to improve, the company chose to double the production at Sunshine Mine and use a modern mining method to go after a rich new deposit called the West Chance.

Using a ramping system and large loaders to haul ore, the company saw a reduction of the cost of producing an ounce of silver to $5.32 from $6.62 for the fourth quarter of 1995.

The mine now produces as much silver as it did in 1991, when the company laid off many of its miners to address falling prices.

Sunshine hopes as more of the West Chance deposit gets developed, the mine will produce more ore and lower production costs further.

The company’s foray into South America appears promising. The Pirquitas silver and tin mine in Argentina could hold millions of ounces of low-cost silver and tin, and the company hopes to complete a feasibility study on the mine this year.

Sunshine stock closed Friday unchanged at $1 a share.

, DataTimes