Gibraltar reports profits for first time since 1980

1987 was a profitable year for Gibraltar Mines, its first since metal prices fell in 1980.

Earnings rose to $4,251,000 or 35 cents per share on revenues of $73,929,000. This compares with a loss of $4,557,000 or 40 cents per share on revenues of $57,558,000 in 1986.

The company’s cash position was up $7.2 million to $21.6 million and dividends to shareholders totalled $4.8 million.

Higher copper prices and lower costs resulting from processing of softer and higher grade ore contributed to the results. Cathode copper operations and reduced depletion charges also helped, President A. Petrina reports.

He adds that these positive factors were partially offset by an increase in the cost of ore as a result of purchases from Cuisson Lake Mines, and by higher smelter costs. Molybdenum revenues were below those of 1986 when normal sales were augmented by additional sales from inventory.

Copper production, including that from the cathode plant, rose 25% to 82.5 million lb. During the last four months of 1987 the cathode plant exceeded design capacity of 10 million pounds per year. Sale of cathode copper added an after-tax cash flow of $3.1 million.

Gibraltar’s earnings include $1.3 million from its 41% equity interest in Cuisson Lake Mines. Ore mined from Cuisson’s adjoining claims represented one-third of 1987 ore production and increased the company’s costs by $9.5 million.

During the year, Gibraltar’s mining plan was reviewed based on the improved outlook for metal prices. As a result, a number of pit designs were revised and 118 million tons were added to mineable reserves, which now total 2 04.8 million tons grading 0.31% copper and 0.009% molybdenum.