Despite lower copper production from three mines,
Aur turned a profit of US$16 million (or US17 per share) during the period, on revenue of US$70 million, compared with US$1.2 million (US1 per share) on revenue of US$50.3 million in the second quarter of 2003.
However, earnings in the recent quarter were 40% lower than those incurred in the first quarter of 2004, and revenues were down 21%, owing to the lower realized price for copper.
Cash flow from operations during the recent quarter more than doubled from a year ago, to US$34.1 million. Cash flow in the first quarter of this year was US$40.5 million.
The company’s three producing mines — Andacollo and Quebrada Blanca in Chile and Louvicourt in Quebec — cranked out 25,130 tonnes copper (versus 26,898 tonnes a year earlier), 1,905 tonnes zinc (1,406 tonnes), 55,000 oz. silver (49,000 oz.), and 1,900 oz. gold (1,600 oz.). Copper production was hampered by a slowdown at Louvicourt, a 13-day strike at Andacollo, and harsh winter weather at Quebrada Blanca.
The company’s average cash operating cost during the quarter was US54 per lb. copper. On the sales side, Aur realized US$1.27 for each pound of the red metal sold, up 48 per lb. from a year earlier but off a dime from the first quarter of 2004.
The Louvicourt mine produced 6,759 tonnes copper (about 10% less than a year ago), whereas its zinc output jumped by a third to 6,305 tonnes. Cash operating costs of US28 per lb. copper (net of byproduct credits) were US32 lower than expected, owing to increased byproduct credits and lower smelting and refining costs. The operation performed better than expected because of higher head grades and mill throughput.
Aur has a 30% interest in Louvicourt, which it operates for
At Andacollo, production of London Metal Exchange Grade A cathode copper totalled 4,227 tonnes, off 20% from the first quarter of 2004 and about 820 tonnes below target. Cash operating costs fell US3, to US51 per lb. The company signed workers to a new 4-year contract. Production for the year is projected at about 21,320 tonnes at a cash cost of US53 per lb.
Cathode production at Quebrada Blanca was about 8% below budget at 18,461 tonnes. An abnormally wet winter meant fewer tonnes were crushed and stacked for leaching. Cash costs were higher than budgeted, at US58 per lb. The mine’s full-year copper production target has been scaled back by about 1,800 tonnes to around 77,500 tonnes. Cash cost are pegged at US55 per lb.
At the end of June, Aur’s cash and working capital had increased to US$134 million and US$155 million, respectively.
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