Princeton reports loss of $2.3 million in first quarter

A net loss of $2.3 million was reported by Princeton Mining (TSE) for its 1991 first quarter ended March 31, compared to net earnings of $2.3 million for the corresponding period in 1990.

The company’s financial results were adversely affected by lower copper prices and by a 50% decrease in asbestos fibre sales resulting from delays in the phase-in of the underground McDame deposit and a labor dispute during March.

Princeton’s key mining assets are the Similco copper-gold mine near Princeton, B.C., and the Cassiar chrysotile asbestos mine in northern British Columbia.

The labor dispute at Cassiar was resolved in mid-March with the signing of a 2-year collective agreement, although full production was delayed until mid-April. In early June, 235 union employees at the Similco operation withdrew their services. This labor dispute is not yet resolved.

James O’Rourke, president of Princeton Mining, told shareholders at the company’s recent annual meeting that production problems related to the change from open pit to underground production at Cassiar are “behind us.” A mineral sizer to reduce the size of oversize boulders was put in place early this year, and continuous fibre production is now reported to be in excess of 300 tonnes per day.

O’Rourke also noted that ore delivered from the underground mine since the start of the McDame operation has been considerably higher grade than the 5.6% projected in the feasibility study. The updated reserve calculation is reported as 18.9 million tonnes grading 6.1% recoverable fibre, and this is expected to reduce annual development costs and extend the mine life.

Operating results were below expectations at Similco during the 1991 first quarter because of lower copper prices and weather-related interruptions. An updated 5-year mine plan was introduced early this year which will result in development of the new Virginia deposit delineated in the 1990 exploration program.

O’Rourke told shareholders that Similco is a high-cost copper producer and the workforce will have to go back “with an attitude of increased productivity” in view of lower copper prices and a strong Canadian dollar.