Gold strategy pays of in Moinorco’s balance

Debt free and equipped with just under $900 million(US) for precious metal acquisitions, Luxembourg-based Minorco (NASDAQ) has confirmed its new precious metals acquisition strategy by investing in two producing gold properties.

Minorco says it has invested $80 million to acquire a 50% interest in a limited partnership with Western Gold Exploration and Mining. Formed under an agreement with Inspiration Resources (TSE), the new company has promised to increase its gold output from 65,000 oz in 1987 to 200,000 oz by the early 1990.

With interests in a number of Inspiration gold plays, WesGold is being developed into a significant North American gold producer.

The two producing mines are an offshore placer project near Nome Alaska and the Austin mine and mill in Nevada.

Still in the early stages, Minorco’s new acquisition strategy appears to be paying off. During the 6-month period ended Dec 31, net earnings increased to $653.7 million ($3.84 per share) compared with $43.9 million (26 cents per share) during the same period last year.

Minorco’s 6-month earnings before extraordinary items more than tripled to $138.9 million from $43.4 million last year.

An extraordinary gain of $514.8 million was due mainly to the sale of a 10% interest in Anglo American Investment Trust Ltd. in last July and the remaining 14% of Salomon Inc. (a New York brokerage house), Minorco says.

An interim 10 cents dividend for the year to June 30 is payable on May 6 to shareholders of record on April 5, said Chairman Julian Ogilvie Thompson.