Teetering on the brink of oblivion,
Low zinc prices, combined with an 18% decline in head grades and higher operating costs, left Nanisivik with an $8.3-million operating loss in the first half of 2001. Cash flow during the period amounted to $6.1 million.
Breakwater further adds that it is “pursuing all avenues of cash preservation, which may include the temporary suspension of operations at one or more other mines.”
In the first half of 2001, the company incurred a loss of $9.5 million (or 8 per share) on revenue of $140.2 million. The loss includes $7.4 million recorded in the second quarter, when revenue was a mere $59.4 million. By comparison, in the first half of 2000, Breakwater earned $8.8 million (11 per share) on revenue of $146.4 million.
Since June, when it defaulted on its US$45-million revolving-credit facility, Breakwater has deferred quarterly payments on a US$23.1-million term loan. Also, bankers granted the company a 1-month extension, to the end of October, to raise $16 million.
Shares recently traded below 20, a far cry from its all-time high, in late 1997, of more than $9.
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