Repadre in black despite year-end writedown

Improved earnings from the Tarkwa gold mine in Ghana meant Repadre Capital (RPD-T) turned a profit of $2.7 million on revenue of $8.9 million in 2000, while taking a $3-million charge against assets on its balance sheet.

The profit, which translated to 9 per share, compares with a $17.1-million loss in 1999. At the end of 1999, Repadre took a writedown of $18.7 million that wiped out a $1.6-million profit on royalty income. Revenue in 1999 was $5.8 million.

Royalties provided $3.2 million of Repadre’s revenue, but the Tarkwa mine, which produced 40% more gold in 2000 than in the previous year, was the biggest contributor to the top line, spinning $5.2 million in revenue.

In 1999, the company’s Tarkwa holding provided only $559,000. Repadre holds an 18.9% interest in Tarkwa’s operating company, Gold Fields Ghana, a subsidiary of Gold Fields (GOLD-Q).

Of the $3-million writedown, $2 million is coming off the carrying value of the Itos silver project in Bolivia, where Repadre has a sliding 5-to-8% net smelter return from Bolivian exploration company Barex Empresa Minera. The remaining $1 million has been written off against the value of Repadre’s stock portfolio, now carried on the books at just under $4 million.

The most significant future asset for Repadre remains its 1% gross sales royalty on the Diavik diamond project in the Northwest Territories, a project owned by Aber Diamond (ABZ-T) and the Kennecott Canada unit of Rio Tinto (RTP-N). Diavik is scheduled to go into production in mid-2003, producing between 6 million and 8 million carats annually, valued at US$79 per carat.