Brenda to close Peachland mine by end of 1990

Although its time is limited, the mine is going out in style. Indeed, it was the principal contributor to Brenda’s 1988 net earnings of $14.6 million or $3 per share, a performance that also had a positive impact on its stock price. Among TSE mining listings, Brenda placed fourth last year in terms of stock appreciation (ahead 43.3% from 1987) — behind Inco Ltd., Cominco, and Pine Point Mines.

Speaking at the company’s annual meeting, President John Gordon noted that copper output in concentrate form was the highest since 1972. However, molybdenum production (a by-product) was down from the previous year, reflecting lower ore grades.

Emile Brokx, mine manager, noted that Brenda milled over 12.4 million tons of ore last year which was “the highest ever achieved at the operation.” The mill averaged 34,000 tons per day at a slightly lower head grade. Higher copper prices made it economically viable to process 3.4 million tons of low grade stockpile averaging 0.121% copper and 0.028% MO.

While allowing the recovery of significant amounts of copper and molybdenum, processing the stockpile removed a potential source of contamination and provided “a solution to an eventual reclamation concern,” said Gordon.

The decision to open up the south wall of the pit extended the mine’s life by another year, but production from there was sold forward at an average price of 87 cents (US) because Brenda thought copper prices would be lower in 1988-89.

In the first quarter the price of copper ranged from a high of $1.61(US) to $1.31 and Gordon said “this resulted in a substantial reduction in revenue, and a net loss for the first quarter of $1.7 million, or 34 cents per share.

“The outstanding contracts are being bought back as appropriate. The end result of the program will depend on copper prices over the next few months. Further substantial losses will be incurred, but a positive cash flow is expected for the full year,” he emphasized.

Brenda has completed a mineral inventory and pre-feasibility study for its Lang Bay kaolin project, held under option from Fargo Resources (VSE). “These led to the conclusion that Brenda should not pursue this project any further due to the low rate of return,’ said Gordon. Responding to a question on the project, Gordon said the high strip ratio (7:1) made its development prohibitive.

Brenda has signed an agreement with Minnova Inc. (TSE) to explore for minerals in the Okanagan Valley. Under the agreement, Brenda can earn a 49% interest in properties held by Minnova in a designated area of activity for an expenditure of $3 million over a five-year period. Gordon emphasized the economics of developing a property in the valley would be much more favorable given the fact Brenda already has a mining operation there.

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