Cambior loses US$27m

Posting a third-quarter loss of US$27.3 million (or US39 cents per share), gold miner Cambior (CBJ-T) has bitten the bullet and recorded a US$33-million charge against earnings related to the restructuring of the company’s shaky gold-hedging position.

The restructuring includes two major changes: forward-sold gold was reduced to 1.7 million oz. at US$332 per oz. from 2.7 million oz. at US$318 per oz.; and naked call options were reduced to 1.5 million oz. at US$321 per oz. from 1.9 million oz. at US$315 per oz.

The restructuring is part of a stand-still agreement between Cambior and its hedging counterparties — an arrangement that will remain in effect until Nov. 26, 1999 (T.N.M., Nov. 8-14/99).

The recent third-quarter loss came on revenue of US$85 million, compared with earnings of US$400,000 (US1 cents per share) on revenue of US$82.6 million in the comparable period last year.

Over the first nine months of 1999, Cambior lost US$26.2 million (US37 cents per share) on revenue of US$250.9 million, compared with earnings of US$12.1 million (US17 cents) on revenue of US$266.7 million in the corresponding period last year.

During the recent third quarter, the company produced 150,213 gold-equivalent oz. at a direct mining cost of US$217 per oz., down from 156,928 oz. produced a year ago at US$222 per oz. Total production costs in the third quarter were US$321 per oz., up from US$319 per oz. last year.

In terms of ounces, the largest contributor was the Omai open-pit mine in Guyana, which turned out 73,550 oz. gold during the quarter at a direct mining cost of US$244 per oz., compared with last year’s 75,058 oz. at US$247 per oz. The milled grade slipped slightly to 1.3 grams gold per tonne.

In second place was the more profitable Doyon division, where Cambior produced 57,499 oz. gold at a direct mining cost of US$196 per oz., compared with 65,113 oz. at the same cost a year ago.

The average realized gold price for the quarter was US$371 per oz. — a US$112-per-oz. premium over the average market price.

At its remaining base metal mines in Quebec, Cambior’s share of production during the third quarter totalled: 18,600 tonnes zinc-in-concentrate (compared with 16,900 tonnes a year ago); 1,600 tonnes copper-in-concentrate (1,400 tonnes); and 286 tonnes niobium (283 tonnes).

At Sept. 30, cash and short-term investments stood at US$21 million; long-term debt, at US$181 million.