Mining of higher-grade pillars at the soon-to-be closed Nanisivik mine on Baffin Island resulted in higher production and a smaller loss for
For the three months ended March 31, the company posted a net loss of $3.3 million (3 per share) on revenue of $64.5 million, compared with a year-ago loss of $4 million (4 per share) on revenue of $80.1 million. The drop in revenue is attributable mostly to lower metal prices and sales volumes. Cash flow from operations slid to $4.1 million from $6.2 million between the two periods.
During the first three months of 2002, the company produced 60,470 tonnes zinc in concentrate, up 15% from the 52,647 tonnes produced a year earlier.
During the recent quarter, Nanisivik cranked out a near-record 18,769 tonnes of contained zinc, 55% more than during the year-earlier period. The increase is attributed to mining of the higher-grade pillars.
The company has budgeted $3.9 million for reclamation and mine closure at the Nanisivik mine, which is slated to close in September.
The company also benefited from higher production at the Bouchard-Hbert polymetallic mine in Quebec, the El Mochito mine in Honduras, and the El Toqui mine in Chile, where zinc-in-concentrate production climbed 12%, 9% and 7%, respectively. All three mines benefited from higher head grades.
Cash costs hit a record low of US31 per lb. payable zinc. For the balance of 2002, the company expects to shave a penny off the original forecast of US35 per lb.
During the quarter, Breakwater averaged US$37 per lb. (US$813 per tonne) for its zinc, up from the originally forecast US35 per lb. (US$780 per tonne).
The company recently completed an oversubscribed rights offering for $18.9 million before expenses. The deal saw nearly 94.5 million shares issued. Since the offering was 100% subscribed, Breakwater will issue Dundee Bancorp a warrant to buy up to another 15.4 million shares under the offer’s original terms.
Completion of the offering means the company’s existing US$37.5-million revolving-credit facility has been increased to US$45 million.
At the end of March, Breakwater had more than $3 million in cash and equivalents.
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