TORONTO (miningweekly.com) – Despite smashing its internal production record in the second quarter, TSX- and Amex-listed Lake Shore Gold has widened its net loss, as lower gold prices and higher interest and financing costs impacted on the company’s performance.

Lake Shore, which is focused on its three deposits in the Timmins mining camp of Ontario, reported a record gold pour of 31 800 oz in the three months ended June 30, with record gold output of 30 800 oz and gold sales totalling 27 600 oz, at an average sales price of $1 409/oz. Production increased 26% year-on-year and 33% on that produced in the first quarter.

The company recorded a net loss of C$5.4-million, or C$0.01 a share, compared with a net loss of C$2-million, or nil a share, for the same quarter a year earlier. The higher net loss mainly reflected the impact of lower gold prices, as well as a C$2.8-million increase in interest and other financing costs resulting from the company’s increased debt.

Gold prices had fallen sharply from the start of the year, hitting a near three-year low at about $1 180/oz in late June. This was prompting miners across the globe to cut spending, adjust plans and defer or divest projects as they struggle to adapt to a low-price environment.

Revenue was down 2.6% to C$39.67-million, compared with C$40.73-million a year earlier.

The cash operating cost per ounce sold during the period averaged C$908, including $28/oz related to royalties. The total all-in sustaining cost was $1 257/oz.

The company said it was advancing with the Bell Creek mill expansion, which was now nearing completion, and commissioning had started at the end of July. A new crushing and grinding circuit was now also operational and ramping up to 3 000 t/d.

Lake Shore said it expected to produce between 120 000 oz and 135 000 oz of gold, at a cash operating cost of between $800/oz and $875/oz, for the full year. It had budgeted for capital investment of about C$90-million.