Base metal companies are not having an easy time staying in the black in these days of low metal prices, and
The company posted a net loss of $10.9 million (or 16 cents per share) for its latest quarter ended Sept. 30, compared with earnings of $4.1 million a year earlier. For the first nine months of this year, the net loss was $14.1 million on revenue of $133.8 million, compared with earnings of $13.3 million on revenue of $130.4 million a year ago.
The losses were attributed to lower metal prices and an operating loss of $6.2 million at the El Toqui mine in Chile. Other factors were the weaker Canadian dollar, which resulted in exchange losses from the revaluation of the company’s U.S.-dollar-denominated debt, and losses on forward sales contracts totalling $7.3 million.
Breakwater produced significantly greater amounts of zinc, lead, silver and gold this year from its worldwide operations than in 1997.
In the first nine months of 1998, 1.9 million tonnes were milled, compared with 1.2 million tonnes in the previous year. The amount of metal produced in concentrates during this year’s 9-month period was 120,048 tonnes of zinc, 17,984 tonnes of lead, 2.3 million oz. silver and 2,325 oz. gold, compared with 75,589 tonnes zinc, 5,922 tonnes lead, 1.7 million oz. silver and 281 oz. gold a year earlier.
The Bougrine mine in Tunisia, which has exceeded expectations since commercial production began in early June of this year, and the Nanisivik mine in the Canadian Arctic both generated operating profits.
Bougrine reported an operating profit of $397,000 in first nine months from the milling of 166,205 tonnes grading 11.6% zinc and 1.8% lead. The operation generated 15,267 tonnes of zinc in concentrates and 2,003 tonnes of lead in concentrates during this period. Operating costs averaged US$36.70 per tonne milled from May 2 to Sept. 30.
Nanisivik reported operating income of $1.7 million in the first nine months of 1998, compared with $14.1 million in the corresponding period of 1997. Some 591,362 tonnes of 6.8% zinc were milled in the 9-month period, resulting in the production of 40,431 tonnes of zinc in concentrates plus 381,540 oz. silver. Operating costs averaged $39.70 per tonne milled.
El Mochito in Honduras reported an operating loss of $1.9 million for the first nine months of this year, compared with an operating profit of $5.2 million a year earlier. Production has been suspended at the money-losing El Toqui mine in Chile, pending completion of a US$2.7-million capital improvement program aimed at reducing costs and boosting production. This work is scheduled to be completed by year-end. However, Breakwater notes that the continuation of weak zinc prices may prohibit or delay the scheduled mine reopening.
Ongoing metallurgical challenges at the Caribou zinc mine in New Brunswick resulted in a suspension of operations earlier this summer. Production this year (until the Aug. 2 closure) was 494,448 tonnes grading 6.3% zinc, 3.8% lead and 102 grams silver per tonne. During this period, 18,748 tonnes of zinc in concentrates were produced, along with 12,582 tonnes of lead and 897,804 oz. silver.
More metallurgical work, including pilot-plant testing, is under way and scheduled to be completed shortly. The results will be incorporated into a feasibility study scheduled for completion early next year.
Breakwater has $31.9 million in working capital, down $29.7 million since the end of 1997.
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