Copper price plagues Gibraltar

The continual erosion in the price of copper is taking its toll on Gibraltar Mines (TSE).

The company reported a loss of $6.2 million in the first nine months of the year and a loss of $3.2 million in the third quarter, on revenues of $37.9 million and $12.2 million respectively.

The Gibraltar open pit near McLeese Lake, B.C., produced 11.4 million lb. copper in concentrate and 1.9 million lb. cathode copper in the third quarter. Production for the nine months totaled 45.6 million lb. copper in concentrate and 4.5 million lb. cathode copper.

Cash production costs were US94 cents per lb. in the third quarter and US84 cents in the nine months. This compares with average London Metal Exchange prices of US87 cents in the quarter and US90 cents in the nine months. After changes in working capital, the company reported a negative cash flow of $1.7 million in the 9-month period compared with cash flow of $9.3 million in the same period last year.

The losses, combined with capital expenditures related to the development of the third stage of the Gibraltar East pit, helped reduce working capital to about $14.8 million from $22.5 million at the end of 1992.

However, Gibraltar has boosted its cash situation by selling 10.8 million shares for gross proceeds of $50 million.

By the end of the year, the company expects to complete a feasibility study on expansion of its mill capacity to 57,000 from 38,000 tons per day. Estimated cost: $35 million.

If the study is positive, some of the recent funding will be used to finance the expansion.