Merdian brighten a bit about stalled Argentine gold mine

For the first time since Reno's Meridian Gold was slapped hard by Argentine voters who didn't like its plans for a new mine, company executives last week were a wee bit optimistic about the property's future.

Brian Kennedy, Meridian's president, said the company is studying technological alternatives that might reduce the environmental effect of the proposed Esquel mine and said the company is beginning to think a bit about a 10- to 15-year life for the mine.

That's not exactly bubbling optimism, but it's a far cry from the company's near silence that's surrounded the project since voters turned it down in early 2003.

In the past 16 months,Meridian has been working to rebuild residents' trust and political support.

The future of Esquel is a huge matter for Meridian.

The property is carried on the company's books with a value of more than $360 million about 38 percent of the company's total assets OF $932.7 million as of June 30.

The value of the Argentine property gets a close look every 90 days by Meridian accountants and their auditors,who decide whether the value should be written down if the proposed mine won't happen.

So far, the accountants haven't seen any reason to reduce its value.

In the meantime, Meridian focuses much of its exploration work on new discoveries around its El Penon mine in northern Chile.

In the second quarter, that mine produced 76,300 ounces of gold.

That's down from the 82,000 ounces the mine produced in the same period a year ago.

Kennedy noted that that the mine grows more efficient the average cost of producing an ounce of gold was $47 in the second quarter compared with $50 a year ago and continued strong gold prices provide further muscle to the company's margins.

For the second quarter, the company reported earnings of $9.1 million on sales of $31.9 compared with earnings of $9.7 million on sales of $31.5 million a year earlier.