Inmet posts profit in second quarter

Thanks to higher copper and zinc prices, as well as drops in both cash costs and exploration expenditures, Inmet Mining (IMN-T) was able to post a profit for the second quarter.

For the three months ended June 30, the company earned $7.7 million (or 5 cents per share), compared with a loss of $14.1 million (19 cents per share) for the same period last year.

At its 18%-owned Ok Tedi copper-gold mine in Papua New Guinea, Inmet lost $148,000 during the recent second quarter, compared with a gain of $5.2 million for the same period in 1996. The loss is being attributed to unusually low water levels in June, which caused a suspension of milling operations and concentrate shipments. Shipments resumed in July.

Inmet’s 49%-owned Cayeli copper-zinc mine in northeastern Turkey earned $6.7 million for the company during the second quarter, up from a loss of $3.6 million for the same period last year.

>From its 35%-owned Norddeutsche Affinerie in Hamburg, Inmet earned $6.3 million, compared with $5.3 million for the second quarter of 1996.

The company’s new, wholly owned Troilus gold-copper mine near Chibougamau, Que., generated profits of $307,000 in the second quarter, compared with a loss of $2.2 million during the first quarter of 1997, when commercial production began.

Meanwhile, at the 20%-owned Navachab gold mine in Namibia, Inmet’s earnings dropped to $62,000 in the recent second quarter, compared with earnings of $125,000 a year ago.

The company’s wholly owned Winston Lake zinc-copper mine earned $548,000 during the quarter, an improvement from the same period last year when the mine posted a loss of $2.5 million.

At its wholly owned WBH tungsten mine and conversion plant in Austria, Inmet recorded $2.3 million in earnings, off from the $2.9 million earned during last year’s second quarter.

Inmet’s total copper production for the second quarter of 1997 was 11,600 tonnes, up from the 10,100 tonnes produced a year ago. The average cash cost of copper production between the two periods fell to US65 cents from US76 cents per lb.

Gold output rises

Total gold production rose to 57,300 from 20,300 oz., while the average cash cost of mine production fell to US$261 from US$289 per oz.

Total zinc output fell to 8,000 from 17,000 tonnes, and the average cash cost of zinc production rose to US69 cents from US$48 cents per lb.

Exploration expenditures totalled $3.5 million in the recent second quarter, compared with $6.1 million in the comparable period last year.

For the six months ended June 30, 1997, Inmet earned $8.6 million (or 4 cents per share), compared with a loss of $6.4 million (11 cents per share) during the first half of last year.

In July, Breakwater Resources (BWR-T) agreed to pay US$19.3 million for all the assets of the Socit Minire de Bougrine (SMB), in which Inmet holds a 48% interest. SMB’s primary asset, the Bougrine zinc-lead mine in Tunisia, ceased operations in October 1996, with Inmet writing off its entire investment in September 1996. The transaction with Breakwater is set to close during the third quarter of 1997.

Inmet has also expressed an interest in divesting itself of the Troilus mine in the belief that this would enable it to consolidate its operations and raise capital for its massive Antamina copper-zinc project in Peru. The company is developing that project with equal partner Rio Algom (ROM-T).

Meanwhile, mine construction at Inmet’s 33%-owned Ovaik gold property in Turkey resumed in May following a 1-month suspension ordered by Turkish authorities following a large site protest. Barring further delays, completion of the project is expected by the end of the year.