Tuesday, October 24, 2006

Glamis Gold Ltd. , which has agreed to be taken over by Goldcorp Inc., reported a 12-fold jump in third-quarter profit on Tuesday, thanks to increased output and higher gold prices.

Glamis earned $19.2 million, or 11 cents a share, in the three months ended September 30, up from $1.6 million, or 1 cent a share, in the same period a year earlier.

Glamis said it produced 145,634 ounces of gold at a total cash cost of $182 per ounce, compared with 90,535 ounces of gold at $231 an ounce a year earlier.

Revenue more than doubled to $91.8 million from $41.1 million as sales volume surged to 144,113 ounces of gold from 91,625 ounces and average prices climbed to $609 an ounce from $446 a year earlier.

Glamis, meanwhile, boosted production to 145,634 ounces from 90,535 ounces and generated cash flow of $38.4 million, up from $14.8 million.

The company trimmed the cash cost of production to $182 per ounce from $231.

However, the company expects 2006 gold output to be lower, totaling about 610,000 ounces at about $190 per ounce, down slightly from a previously forecast 620,000 ounces.

President and CEO Kevin McArthur said Glamis' third-quarter output was beefed up by its El Sauzal mine in Mexico, which accounted for 77,085 ounces, more than half the quarter's output.

Glamis' shareholders will vote October 26 on the deal, which will create one of the biggest gold companies in the world.

The combined tender of shares and cash was worth $8.6 billion when first announced in late August, but has since declined, in line with Goldcorp's share price.

Shares of Glamis advanced 46 Canadian cents, or 1.1 percent in morning trading, to C$43.76 on the Toronto Stock Exchange, outperforming a rise of 0.12 percent in the benchmark S&P/TSX composite index <.GSPTSE>.

Volume of 1.9 million shares, including 1.5 million in block trades, in just two hours of trading exceeded a daily average of 1.3 million over the past five days.