Copper slump forces Arimetco to trim

Flagging copper prices have prompted Arimetco International (TSE) to cut costs.

Staff at the Tucson office was reduced by 20%, company cars were eliminated and officers suffered salary cuts. Indeed, Chief Executive Officer Roy Shipes is continuing to work without any salary, the company reports. In June, Arimetco closed its Emerald Isle mine in northwestern Arizona, although leaching operations continued. Now even the leaching has ceased and the company is about to decide whether the mine should be reopened or sold. Waste mining at the Johnson open-pit, heap-leach operation in southeastern Arizona has been suspended. At the end of September, waste stripping had advanced about six months ahead of mining of ore.

In conjunction with the operating changes, the heap-leach circuit was reconfigured to reduce acid consumption and pumping costs. As a result, operating costs at Johnson are expected to drop to US65-70 cents per lb. Meanwhile, the Yerington mine near Reno, Nev., continues to operate. Arimetco is proceeding with construction of the first new heap-leach pad, with loading planned for early October. Yerington is expected to reach its capacity of 55,000 lb. per day during the first quarter of 1994, with cash operating costs projected at about US60 cents per lb.

The company expects to receive permits for its nearby MacArthur project by Dec. 1. MacArthur ore will allow for expansion of the Yerington plant to 80,000 lb. per day and a further reduction in operating costs. For the six months ended June 30, Arimetco lost US$1.15 million on sales of US$10.2 million. This year’s second-quarter loss was US$961,000 on sales of US$4.96 million.

The average realized copper price dropped to US83 cents per lb. in the second quarter from an average of US95 cents in the first.

Copper production in the second quarter reached five million pounds, bringing the 6-month total to 9.6 million lb.

As of June 30, Arimetco had about US$11.4 million in working capital and US$10.9 million in long-term debt.