Aur rides the red rocket

Higher copper prices helped to soften the blow of the closure of the Louvicourt mine, near Val d’Or, Que., and helped Aur Resources (AUR-T, AURRF-O) to post record fourth quarter and full year earnings in 2005.

During the last three months of 2005, Aur racked up record net earnings of US$41.5 million (or US44 per share) on revenue of US$132.7 million, compared with year-ago earnings of US$97.9 million (US36 a share) on US$336.9 million in sales. Cash flow from operations jumped 56% to an all-time high of US$89.3 million.

For the full year, earnings came to US$142.3 million (US$1.49 a share), 47% better than in 2004. Revenue between the two periods increased by around 33% to US$446.9 million, while cash flow jumped by 53% to a record US$249.8 million.

Aur also reported record copper production from the Quebrada Blanca and Andacollo mines.The quarter’s haul from the two Chilean mines came to 60.3 million lbs. of copper, down from the year-ago 63.4 million lbs. The latter figure includes production from Louvicourt, which closed in July. Cash operating costs during the recent quarter amounted to US71 per lb. of copper, US11 a lb. higher than a year earlier, owing mostly to energy costs.

Metal production from all three mines in 2005 was 240 million lbs. copper, 8.8 million lbs. zinc, 138,000 oz. silver, and 4,500 oz. of gold. Copper production increased by 4 million lbs. despite Louvicourt’s closure; production of the other metals slipped. Cash costs rang in at US67 per lb. of copper.

The company realized an average of US$2.19 per lb. for its quarterly production, and US$1.83 per lb. for the year. That compares with London Metal Exchange average prices of US$1.95 and US$1.67 per lb.

Aur holds a 76.5% stake in Quebrada Blanca; Inversiones Mineras and Chilean state agency Empresa Nacional de Minera (Enami) own 13.5% and 10% interest, respectively. Aur’s stake at Andacollo is 63%, with Compaa Minera del Pacfico owning 27%, and (Enami) at 10%.

Looking ahead, Aur expects to take home 167 million lbs. of copper from Quebrada Blanca and Andacollo in 2006. Cash costs are forecast at an average of US69 per lb. The company also expects its Duck Pond mine in Newfoundland to chip in another 5.6 million lbs. of copper and 10.2 million lbs. of zinc. Production is scheduled for the fourth quarter.

Duck Pond is designed to produce 41 million lbs. of copper and 76 million lbs. of zinc in concentrates between 2007 and 2014.

On the financial side, Aur forecasts its 2006 net earnings at around US$138 million (or US$1.43 a share), with revenue figured at US$464 million and cash flow at US$247 million.The company employed a copper price of US$2 per lb. for its 2006 outlook.

At the end of 2005, Aur had US$361.3 million in cash, up from US$206.5 million at the end of 2004.