Inmet triples its net earnings

Four factors — higher metal prices; increased production at Norddeutsche Affinerie; the acquisition of the WBH tungsten powder operation; and the initiation of operations at two base metal mines — have enabled Inmet Mining (TSE) to increase revenue.

Indeed, third-quarter revenues almost tripled to $17.3 million, compared with $6.1 million in the same period of 1994. However, this rise was partially offset by increased exploration expenditures in Panama, Chile and British Columbia.

For the first nine months of the year, Inmet lost $195 million, including a $245-million writedown at the Copper Range facility in Michigan. This compares with income of $17.9 million on $641.1 million for the same period in 1994.

The writedown resulted from a decision to suspend mining at Copper Range. (Despite the suspension, the refinery at Copper Range continues to process the company’s copper inventories.)

Inmet’s newest operations, the Cayeli copper-zinc mine in Turkey and the Bougrine zinc-lead mine in Tunisia, continue to add to its bottom line.

Cayeli, which contributed $2.2 million in operating profits, produced 3,500 tonnes of copper in concentrates and 6,900 tonnes of zinc in concentrates during the third quarter.

Increased zinc production, resulting from improved metallurgical performance at Bougrine, was reported during the third quarter. In total, Bougrine yielded 11,000 tonnes of zinc in concentrates and 1,700 tonnes of lead in concentrates for the quarter.

Other operations that made significant contributions to the bottom line were the Norddeutsche Affinerie and the WBH tungsten mine.

At Norddeutsche, increased treatment and refinery charges enabled the division to post earnings of $1.4 million during the quarter, compared with a loss of $400,000 in the same period of 1994. At WBH, increased demand for tungsten powder and tungsten carbide enabled WBH to reopen its underground mine to provide concentrate feed for its processing plant. As a result, the plant operated at capacity during the quarter.

In Papua New Guinea, Inmet’s share of net earnings from the Ok Tedi operation increased, despite lower throughput. The increased earnings were attributed to higher copper prices and lower operating costs. For the third quarter, copper production fell to 53,300 tonnes from 58,800 tonnes in 1994, while gold production dipped to 125,100 from 128,000 oz.

At the Winston Lake zinc mine in northern Ontario, lower mill throughput, grades and recoveries resulted in a 29% decrease in zinc production for the third quarter, compared with the year-ago period. Mill throughput was lower, resulting from narrower stope mining at the extremities of the orebody.

Development at the adjacent Pick Lake deposit is proceeding on schedule, and ore is being mined from the upper Pick Lake zone. Ore from Pick Lake is expected to increase the overall grade of ore being milled at Winston Lake.

Elsewhere in Canada, Inmet is proceeding with construction at the Troilus gold property in northern Quebec.

On the exploration front, Inmet is reviewing results from several programs. Drilling was carried out on the Petaquilla copper project in Panama and the Vicuneria in Chile.

Meanwhile, in northern British Columbia, drilling was completed on the Akie project. The company has staked another two zinc properties within the Gataga basin, which hosts the Akie property. These new prospects are thought to have stratigraphy similar to the Akie project.


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