Copper Range purchase boosts Metall’s profit

Acquisition-oriented Metall purchased all the outstanding shares of the Copper Range Co., for $83 million(US) in May. The Michigan copper producer had a significant impact on Metall’s second-quarter earnings, contributing $4.3 million, the company reports.

Copper Range is a fully-integrated copper producer which operates an underground copper mine as well as a mill, smelter, and refinery in Michigan.

Last year, the operation produced about 92 million lbs of copper cathode and one million oz of silver as a by-product. The mine is expected to produce 102 million lbs of copper cathode this year. Proven and probable ore reserves stand at 188 million tons grading 1.08% copper, sufficient for more than 30 years of mine operation.

Meanwhile, Metall’s investments in the shares of other major mining companies have also been paying off. Metall’s share of Cominco’s (TSE) earnings for the six months ended June 30 were $13.2 million, up from $6.1 million for the comparable period last year.

The company’s share of earnings from Teck Corp. (TSE) for the first half of the year were $4.3 million, compared with $2.5 million a year earlier. Metall said it will report the financial impact of the recent LAC/Corona court decision on its earnings during the third quarter. Teck has a 50% interest in the Page Williams mine, recently awarded to Corona.

The Ok Tedi project in Papua New Guinea, in which Metall has a 7.5% equity interest, reported a loss for the period, however. The loss was attributed to a collapse of a conveyer system earlier in the year and delayed shipments.

On Metall’s development projects, a feasibility study is being commissioned to assess options regarding future development of the Cayeli zinc-copper project in Turkey.

Metall’s expenditures on the Navachab gold property in Namibia have totalled $4.5 million this year, and commissioning of the mill is scheduled for the fourth quarter, the company said. Progress is also being reported on several of Metall’s exploration ventures including a gold exploration program under way in the Eastmain area of Quebec. In addition, Metall has a 33.3% interest in the Eurogold joint venture with ACM European Exploration Ltd. Other joint ventures are under way with Cominco Resources International (TSE) in Botswana and Western Australia.

Metall reports net income for the six months ended June 30 of $20.5 million or 54 cents per share, compared with $16.5 million or 44 cents per share a year earlier. Net income for the second quarter was $11.9 million or 32 cents per share, up from $9.4 million or 25 cents per share in the comparable quarter last year.

President Klaus Zeitler attributed the increased profit to higher earnings from Teck and Cominco and the acquisition of the Copper Range Co., in the second quarter. Copper Range’s cash flow from operations was $8.6 million for the quarter ended June 30, Metall said.

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