Copper producing subsidiary boosts Rio Algom earnings

Increased net earnings reported by 68.8% owned subsidiary Lornex Mining Corp. (VSE) were among the factors which contributed to a profitable first half for Toronto based Rio Algom (TSE), the company announced recently.

Lornex holds a 45% interest in the Highland Valley Copper operation in British Columbia which produced 345.3 million lb copper and 6.1 million lb of molybdenum concentrates last year.

As a result, Rio Algom’s consolidated net earnings for the first six months of 1988 were $60.1 million or $1.35 per common share, compared to $38.2 million (86 cents per common share) for the same period in 1987.

Results for the first half of 1988 include an extraordinary tax gain of $3 million (7 cents per share), Rio Algom said.

Revenues for the 6-month period ended June 30 increased to $975,878,000 from $758,939,000 in the first half of 1987.

Rio Algom’s second quarter, consolidated net earnings also increased to $33.7 million or 75 cents per share from $22 million or 50 cents per share in the second quarter of 1987. Second quarter consolidated revenues were $511 million in 1988, substantially above the $395.1 million in 1987.

The Toronto company attributed a 57% increase in its first half consolidated net earnings to improved earnings by Lornex Mining, steel manufacturing, and distribution and potash operations.

Uranium earnings declined this year as a result of the strengthening of the Canadian dollar and lower production resulting from reduced ore grades, the company said.

Rio Algom’s tin mining operations at East Kemptville, Nova Scotia reported a loss for the four months since acquisition on March 1, 1988 as a result of continuing low world tin prices, coupled with the strengthening Canadian dollar. They were recently reacquired from the Bank of America.

A 50%-owned subsidiary of British resource giant Rio Tinto Zinc, Rio Algom recently committed itself to a mining-based policy which will focus on minerals and metals exploration.