Dia Bras brings in Q2 revenue of $6.7 million

Dia Bras Exploration (DIB-V) says its on target to process 144,000 tonnes of ore in 2008 at its pilot mining projects in Chihuahua state, Mexico.

The company expects to get average grades of 1.4% copper and 8% zinc at its Bolivar copper-zinc mine and so far it’s comfortably above the mark.

During the second quarter, Dia Bras processed 33,880 tonnes of ore from Bolivar, which averaged 1.64% copper and 8.49% zinc.

From that, the company produced 1,676 dry tonnes of copper concentrate and 4,580 tonnes of dry zinc concentrate sold for US$6.7 million.

That’s nearly a 40% increase over revenue in the second quarter last year; a result of increased mill throughput and strong copper prices, helping to offset the 40% drop in the zinc price since last September. Zinc is now around US82 per lb.

Billing settlements totaling US$2.6 million were taken care of during the second quarter, having an impact on the company’s cash flow. The settlements were related to 2007 zinc shipments.

Dia Bras also reported that it had reduced operating cash costs by 14.5% to US$108.91 per dry tonne from US$127.48 in 2007.

The company still plans to be careful with its cash flow. In July it initiated a quotation period hedging program on its open copper position to guarantee final settlement prices on about 90% of the shipped copper concentrate. Dia Bras wants to do the same thing with its future zinc concentrate shipments.

A feasibility study has been started for the project. Dia Bras says it will declare commercial production at Bolivar if the study’s outcome is positive.

Over at the Cusi mine and Malpaso mill, Dia Bras processed 1,730 tonnes of ore grading 3.12% lead, 116 grams silver per tonne and 2.2% zinc for a total 61 dry tonnes of lead-silver concentrate and 47 dry tonnes of zinc.

Revenue from Cusi totaled $133,000.

For the first and second quarters combined, the company has brought in $13.3 million in revenue compared to $15.7 million for the same period in 2007.

The company’s current cash position is $3.5 million. It has gotten a US$2 million loan from MRI Trading, a Swiss-based privately-owned commodity trading company for working capital.

Dia Bras has agreed to sell all of its zinc, copper, lead and silver production to MRI until mid-2010.

Dia Bras shares were down a penny at 29 apiece on a trading volume of 12,000 shares.