Breakwater basks in profits

Zinc producer Breakwater Resources (BWR-T) is basking in profits this year, even while adding the Bouchard-Hbert and Langlois mines in Quebec to its roster of worldwide operations.

The Toronto-based company posted net earnings of $4 million on revenue of $81.7 million for the three months ended June 30, down from $7.3 million on revenue of $67.6 million a year earlier. Earnings in the first half stood at $8.8 million on revenue of $146.4 million, compared with $9 million on revenue of $123.7 million reported in the first six months of 1999.

The Nanisivik mine in Canada’s North remained the star performer, with operating earnings of $7.8 million in the first half of 2000. Bougrine in Tunisia also turned in a strong performance, adding $4.4 million in operating earnings during the same period. El Mochito in Honduras added a respectable $2.6 million in operating earnings.

Bouchard-Hbert and Langlois (acquired May 1) produced operating earnings of $1.8 million and a loss of $68,000, respectively, for the two months of Breakwater’s ownership.

Breakwater’s combined operations milled a total of 1.3 million tonnes averaging 8% zinc in the first half of this year, compared with 1.1 million tonnes of 8.9% zinc a year earlier.

During this 6-month period, 177,335 tonnes of zinc concentrates (containing 95,508 tonnes of metal) were produced, along with 5,298 tonnes of zinc concentrates (818 tonnes metal) and 8,354 tonnes of lead concentrates (5,554 tonnes metal). In addition, 3,866 oz. gold and 1.25 million oz. silver were produced.

Total mine site cash costs rose by 8% to US41 per lb. of payable zinc from US38 per lb. in the first half of 1999, owing to higher treatment charges.

Breakwater’s working capital stood at $25.8 million at the end of June, down from $51.4 million at the end of 1999 owing to an increase in short-term debt used to acquire the new mines.