It was a busy quarter for EuroZinc Mining (EZM-T, EZM-X) as a ramping up of production, construction and exploration contributed to the Vancouver-based company’s growing heft.
An increase in copper production and the addition of zinc production helped push net earnings up to US$71.6 million or 14 per share from US$16.2 million or 4 per share for the same period last year.
Midday in Toronto the company’s shares were up 2.7% or 8 to $3.10 on roughly 2.8 million shares.
In a release C. K. Benner, vice chairman and chief executive of EuroZinc calls it the strongest quarterly financial performance since purchasing the Neves-Corvo mine in 2004. It’s two major assets, the producing Neves-Corvo and Aljustrel are both located in Portugal.
Neves-Corvo now has both an operating copper plant and a separate zinc facility. The copper process plant has a 2 million tonne capacity and the zinc plant, which was completed ahead of schedule and commissioned on July 3, has a 350,000 tonne capacity.
The copper grade at Neves-Corvo met expectations for the quarter, averaging 5.1%, and the company sold 46.1 million lbs. of contained copper in concentrate during the quarter. That represents a 19% or 7.4 million lbs. increase over the previous quarter.
Not surprisingly increased revenue helped swell the kitty. Eurozinc reports an increase in cash and cash equivalents to US$97.3 million from US$29.2 for the same period last year, and an increase in working capital by $70.8 million to $128.8 million from the same period last year.
As for Aljustrel a historic mine which had been on care and maintenance while discussions were held with the Portuguese government and unions the company has started development after arranging debt financing and government incentives.
EuroZinc estimates modifications to the process facilities at Aljustrel to take about one year to complete.
Initially ore will be taken from the Moinho deposit which will allow for production of roughly 1.4 million tonnes in the first year.
The higher grade Feitais deposit – also on site — should be ready for production in two years and would bring production to 1.8 million tonnes a year. Mine life is estimated to be 10 years.
On the exploration front, EuroZinc says it has assembled the largest exploration package in the history of Iberian Pyrite Belt – the belt that hosts both Neves-Corvo and Aljustrel – after being granted four new exploration concessions.
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