A substantial increase in earnings from its Cayeli and Troilus mines allowed
Inmet’s first-quarter profit was virtually the same as in the first quarter of 1999, though operating profits were considerably higher. First-quarter revenue was up only slightly from 1999’s $26.1 million.
The Cayeli copper-zinc mine in Turkey mined lower grades in the first quarter of 2000, slowing production of both metals. Added to that, a gearbox failed in one of the grinding mills, depressing throughput for a 28-day stretch in January. The mill has since been fixed and an insurance settlement covers all but $500,000 of Cayeli’s lost earnings.
Cayeli produced 8,000 tonnes copper and 5,200 tonnes zinc in the recent first quarter, against totals of 9,400 tonnes copper and 9,200 tonnes zinc in the corresponding period of 1999.
Exploration at Cayeli has concentrated on outlining a new zone of massive-sulphide mineralization at depth, which is believed to be the offset continuation of the Cayeli deposit below a fault. Earlier underground drilling had cut 70- and 72-metre intervals of massive sulphides, and resources in the deep zone had previously been estimated at 3.8 million tonnes grading 3.8% copper and 7.6% zinc.
Recently, a hole drilled about 60 metres below the known mineralized zone intersected two bodies of massive sulphide surrounding a mafic tuff unit. The 40.3-metre length averaged 5.7% copper and 8% zinc. Inmet plans to test for continuity of mineralization between the known zones and this new intersection.
In Papua New Guinea, the Ok Tedi copper-gold mine, in which Inmet holds an 18% interest, spent heavily on new capital equipment in the first quarter and consequently paid out no dividends. Also, one of the mill’s semi-autogenous grinders was shut down for about six weeks for refurbishment.
Copper production, at 39,600 tonnes, was down about 14% from the first quarter of 1999, while gold production was up slightly at 109,700 oz. Cash production costs were US$1,235 per tonne, compared with $1,200 in the first quarter of 1999.
Lawsuit
Several local landowners in the Ok Tedi area have started an action in Supreme Court in Australia’s Victoria state against Ok Tedi Mines, the operating company. In a 1996 out-of-court settlement with the same landowners, operator
Those studies were not conclusive, but the landowners have now moved to have the courts enforce mitigation measures. Lawyers for the landowners have suggested that BHP build a tailings pipeline to lower ground at a cost of $175-350 million. BHP says the pipeline, apart from being one of the most costly options, may not be the best technical solution.
The operation dumped its mill tailings into the Ok Tedi River, which has raised river beds in both the Ok Tedi and the Middle Fly River, into which it flows, causing downstream flooding.
Dredging in the Ok Tedi and Middle Fly has reduced the problem but not solved it, and risk assessments by BHP’s consultants have so far not pointed to a workable solution. A tailings pond would potentially use up more jungle habitat still, and suspending dredging would expand the flooded area. The government, which holds a 30% interest in Ok Tedi, has backed continued dredging as an interim measure.
Inmet’s Troilus open-pit gold mine, in north-central Quebec, mined slightly lower grades in the first quarter but increased its mill throughput substantially. The net result was slightly lower gold production of 37,700 oz. in the first quarter.
The Troilus pit is being expanded to the south through an area of lower-grade mineralization, and millhead grades are expected to be below the mine’s average until about 2002. Cash production costs were US$229 per oz., down US$9 from the first quarter of 1999.
Exploration drilling at Troilus has failed to identify any more potential resources.
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