Cash-rich Curragh reports loss

A cash position of $46.2 million at the end of the third quarter was reported by zinc-lead producer Curragh (TSE), which also recorded a loss for the 3-month period ended Sept. 30.

The company says the cash remains after the payment of $14.2 million to the Bank of Nova Scotia to settle the Westray loan loss indemnity agreement, $14.3 million associated with ongoing activities in Pictou Cty., N.S., and $18.1 million paid to the Bank of Nova Scotia to reduce the Sa Dena Hes project indebtedness.

The company says its indemnity at the Sa Dena Hes mine in the Yukon has been reduced to US$25 million from US$80 million and its interest in the project has increased to 86.6%. Minority owner of Sa Dena Hes is Hillsborough Resources (TSE).

Stripping costs at the Grum deposit at Faro, Yukon, to Sept. 30 amounted to $10.1 million. To date, 10.5 million tonnes of overburden, about one million tonnes ahead of schedule, have been stripped out of a planned total for the year of 17.2 million tonnes.

The Grum spending is over and above the $65 million spent in prior years by Curragh on the deposit and the infrastructure for the Grum and Vangorda projects.

Permitting on the Stronsay project in British Columbia continues, the company says. Various ministries of the British Columbia government and the two native groups in the Stronsay area are cooperating to finalize outstanding key permits and infrastructure elements. Curragh is seeking a partner to replace Asturiana de Zinc, which withdrew from the project as part of its settlement with Curragh.

Curragh reports a net loss of $2.7 million (9 cents per share) for the third quarter of 1992, compared with a net loss of $11.1 million (34 cents per share) for the same period in 1991. The company says the 1992 third-quarter results were affected by a 3-week shutdown for maintenance. Except during the shutdown, the company says its metal mines operated at full capacity. Results were adversely affected by higher treatment charges and by higher depletion and amortization resulting from the completion of the Faro pit and the mining out of the Vangorda pit which is planned for completion in the first part of 1993.

Regarding the closed Westray coal mine, the company says the question of how and when operations are to be re-established is being affected by a number of conflicting activities.

The public inquiry into the fatal May 9 underground explosion is on hold pending a ruling by the Supreme Court of Nova Scotia on the constitutional validity of the terms of reference of the inquiry. This matter was brought before the court by some members of the management of Westray Coal and is scheduled to be heard commencing Nov. 2.

In order to help to save the inquiry, Curragh says it requested the judge heading up the inquiry to narrow the terms of reference so that the inquiry can proceed to determine the cause and effect of the accident without prejudicing any individual’s rights.

To date, 18 charges have been brought against the company under the Nova Scotia Occupational Health and Safety Act. (Four mine managers also face charges.) The maximum penalty, if a conviction is obtained against the company, is a fine of $10,000 for each offence, the company says. The Royal Canadian Mounted Police are conducting investigations into the underground explosion.

Curragh says it has committed funds towards re-establishing Westray and continues to process an insurance claim that will amount to $25 million or more.