Aur slips into red in third quarter

Lower operating costs at the jointly owned Louvicourt and Andacollo mines were not sufficient to keep operator Aur Resources (AUR-T) out of the red during the third quarter.

The company reported losses of $800,000 for the three months ended Sept. 30, with revenue totalling $26.1 million, whereas, in the comparable period of 1997, the Toronto-based company earned $1.3 million on revenue of $25.2 million.

Aur attributes the loss to three factors: a $1-million reduction in its marketable securities, a $2.2-million loss in foreign exchange activities, and a $700,000 writeoff on certain property and exploration expenditures.

Cash flow between the two periods rose slightly, to $6.9 million.

Aur’s share of combined production from the Louvicourt and Andacollo mines in Quebec and Chile, respectively, totalled 17.9 million lbs. copper, 3.2 million lbs. zinc, 66,000 oz. silver and 2,400 oz. gold. These metals were produced at an average operating cost of US49 cents per lb. copper net of byproduct metals (12% better than budgeted).

Earnings in the first nine months of the year amounted to $59,000 on revenue of $72.5 million, compared with $12.2 million on $88.6 million in the year-ago period. Revenue during the first nine months of 1998 was adversely affected by low copper prices (US77 cents per lb., compared with US$1.09 a year ago) and by $3.4 million in losses related to foreign exchange conversions.

Cumulative production in the recent 9-month period was 51.6 million lbs. copper, 8.9 million lbs. zinc, 184,000 oz. silver and 6,700 oz. gold.

Copper and zinc production at Louvicourt remains on budget, whereas, at Andacollo, copper output is ahead of schedule.

Meanwhile, exploration at both mines and other properties is continuing. Recent highlights include a 26-metre interval from underground drilling at Louvicourt, which averaged 0.59% zinc and 1.24 grams gold per tonne. Aur is testing a low-grade sulphide zone east of the mine but has not yet intersected mineralization of economic significance.

Aur owns a 30% interest in Louvicourt and a 70% stake in Andacollo, and is operator at both mines. The remaining interest in the former is divided between Teck (TEK-T), with 25%, and Novicourt (NOV-T), with 45%. A private Chilean company holds the remaining interest in Andacollo, with the Chilean government retaining a 10% net profits interest.

In related news, Aur plans to repurchase 3 million of its shares from the market, equivalent to 4% of its 75.2 million shares. The company has until Oct. 25, 1999, to complete the transactions.

Aur has $85.8 million in working capital.