Pyhasalmi saves quarter for Inmet

Facing ground problems at its Cayeli mine in Turkey and difficulties in shipping concentrates from Ok Tedi in Papua New Guinea, Inmet Mining (IMN-T) still turned a fourth-quarter profit thanks to good results from the Pyhasalmi mine in Finland.

Inmet made $691,000 on revenues of $60.5 million in the quarter, and $7.4 million on revenues of $212 million for the year ended Dec. 31, for earnings of 9 per share. In 2001 the company made $18.9 million, or 44 per share, on revenues of $106.8 million.

A ground fall in late October at Inmet’s Cayeli copper-zinc mine forced the company to suspend production there to rehabilitate the underground workings, including some areas of the mine’s main ramp. Mining resumed in early December, but Cayeli will not be back at full capacity until late in the second quarter of 2003.

As a result, Cayeli only milled 98,000 tonnes of ore in the last quarter of the year, producing 4,300 tonnes copper and 2,600 tonnes zinc. For the year, Cayeli produced 32,600 tonnes copper and 33,100 tonnes zinc, the copper coming at a cash cost of US$950 per tonne (US43 per lb.).

At Ok Tedi, where Inmet has a minority interest, El Nino weather — which produces dry conditions in the Asia-Pacific region — caused low water levels in the Ok Tedi and Fly Rivers, from which concentrates are barged out. The operation cut mill throughput and mined lower-grade parts of the open pit to limit the amount of concentrate that would have to be stored, with the result that Ok Tedi produced 43,000 tonnes copper and 110,300 oz. gold in the last quarter of the year. Cash costs were US$1,100 per tonne copper.

The brighter lights were the Troilus gold mine in northern Quebec, which met its production targets, and the Pyhasalmi zinc-copper mine in Finland, which exceeded forecasts. Troilus produced 41,600 oz. gold in the quarter, and 164,900 oz. in 2002, at an average cash cost of US$247 per oz. for the year. With mining at Troilus currently going through lower-grade zones, production was only slightly higher than in 2001; lower production of by-product copper and the need for additional stripping nudged the past year’s cash costs up US$15 compared with the year before.

Pyhasalmi, whose production Inmet has fully credited to its books since the beginning of April 2002, produced 14,400 tonnes copper and 34,500 tonnes zinc at an average US$620 per tonne copper (US28 per lb.) over the year. Pyhasalmi’s total costs ran to US$1,040 per tonne (US47 per lb.).