Breakwater boasts robust earnings in latest quarter

An increase in revenue at the Nanisivik mine and higher throughput at the Mochito mine in Honduras are two factors which contributed to hefty profits for Breakwater Resources (BWR-T) in 1997.

The base metal miner rang up earnings of $10.1 million (or 16cents per share) for the year, compared with $255,000 (1cents per share) in 1996.

Revenue rose to $172.6 million from $81.9 million between the two periods, while cash flow escalated to $20.5 million from $5.6 million.

*Nanisivik — The Nanisivik mine, situated on Baffin Island in the Northwest Territories, reported operating earnings of $12.4 million in 1997 (its first full year of operation under Breakwater), compared with $5.4 million in the previous year. A record 805,338 tonnes were mined, and procedures were established to allow for the safe recovery of high-grade pillars in the Main zone.

Mill throughput at the remote operation totalled 779,000 tonnes grading 7% zinc, which yielded 93,300 tonnes of zinc concentrate containing 52,600 tonnes of zinc and 540,000 oz. silver. The installation of a regrind circuit lifted concentrate grades to 57.5% from 55.5%; recovery is estimated at 96.5%. The improvements had the effect of boosting revenue by about $1.4 million per year, largely because of savings in shipping and treatment charges. Operating costs at Nanisivik in 1997 averaged $40.93 per tonne of ore milled, compared with $38.07 per tonne in the previous year.

*El Mochito — Breakwater’s Honduran producer racked up earnings of $4.4 million in 1997, compared with a loss of $1.8 million in the previous year.

The nearby mill treated 593,800 tonnes grading 7.3% zinc, 1.3% lead and 83 grams silver per tonne — its highest volume in the past 12 years.

Operating costs last year averaged US$34.14 per tonne, compared with US$35.73 per tonne in 1996, and exploration work resulted in an increase in geological resources, the company reports. No figures were made available, though the company has said it intends to upgrade these resources into the category of minable reserves in the current year.