Inmet Mining takes Copper Range closure on the chin

There was little cause for celebration as Inmet Mining (TSE) unveiled its results for the second quarter.

The company’s decision to suspend conventional mining and milling at its 87%-owned Copper Range facility in Michigan led to a $245-million writedown and a $227.4-million loss for the period.

The loss, which is equivalent to $2.80 per share, compares with net income of $6.1 million, or 8 cents per share, in the same period last year. Revenue for the two periods was $307.8 million and $204.4 million, respectively.

For the first six months of 1995, Inmet suffered a loss of $212.3 million, or $2.61 a share, on revenue of $606.4 million. This compares with earnings of $11.8 million, or 15 cents a share, on $419.7 million for the first half of 1994.

Before taking into consideration the writedown, Inmet recorded earnings of $17.6 million for the second quarter, which represents an improvement over first-quarter earnings of $15.1 million. The improvement was attributed to higher copper prices and the acquisition of Wolfram Bergbau und Huttengesellchaft (WBH), a tungsten mine and powder production facility.

Were it not for the writedown, revenue for the second quarter would have increased, as well. The rise is attributed to several factors, including higher metal prices, the acquisition of WBH, and startup at base metal mines in Turkey and Tunisia.

The Cayeli mine in Turkey produced 2,500 tonnes of copper in concentrate and 6,400 tonnes of zinc in concentrate for the second quarter. The company expects recoveries and production rates to rise in the coming months.

In Tunisia, the Bougrine mine yielded 9,250 tonnes of zinc in concentrate and 1,400 tonnes of lead in concentrate.

Meanwhile, Inmet’s share of earnings from the Ok Tedi copper-gold mine in Papua New Guinea more than doubled to $31.2 million. Higher copper prices accounted for the increase, as did the devaluation of the Papua New Guinea currency.

High copper prices, combined with a weaker Canadian dollar, also helped offset lower zinc grades and recoveries at the Winston Lake mine, near Thunder Bay, Ont. The end result, however, was a $3.2-million drop in revenue.

Inmet will proceed with development of the Pick deposit at the Winston Lake mine, the effect of which will be to extend the life of the operation until 2002.

And in northwestern Quebec, construction is under way at the Troilus gold property. A permanent road has been constructed and a camp facility is in place.