LionOre Mining International (LIM-T), which continues to explore for gold and nickel in Australia and Botswana, has readjusted its books in response to weak gold prices and a decline in the Australian dollar.
The Toronto-based producer wrote down US$73.4 million (or 77cents per share) on the carrying value of its Australian assets. Total assets are now valued at US$115.3 million. The move has lowered shareholders’ equity (assets minus liabilities) to US$70.5 million.
For the year ended Dec. 31, 1997, the company posted a loss (before the writedown) of US$5.3 million, compared with earnings of US$873,415 in the previous year.
LionOre was formed in 1958 under the name Liberian Iron Ore. It operated an iron ore business in Liberia that produced more than 250 million tonnes of iron before closing in 1989.
Today, LionOre’s primary asset is a 41.6% interest in the Tati nickel mine in Botswana, which produced 7,131 tonnes of nickel and 2,450 tonnes of copper in 1997. Corresponding production figures for the previous year are 6,829 and 2,459 tonnes, respectively.
The Tati operation comprises the Phoenix open pit and the Selkirk underground mine. The former contains proven and probable reserves of more than 18.2 million tonnes grading 0.69% nickel and 0.35% copper; the latter, 248,000 tonnes of 2.42% nickel and 1.37% copper.
LionOre says it plans to boost nickel production at Tati in 1998, to an undisclosed amount, and reduce production costs.
Meanwhile, at the company’s wholly owned Bounty gold project, 360 km east of Perth, Western Australia, 98,775 oz. gold were produced in 1997, compared with 95,613 oz. in the previous year. Underground exploration has extended the resource base to 6 million tonnes grading 4.4 grams gold per tonne, equivalent to 845,803 contained ounces.
LionOre also has a 36.65% interest in Australia’s Mt. McClure gold mine, from which the company’s share of gold production in 1997 amounted to 32,247 oz., compared with 39,811 oz. in 1996. The decrease is attributable to lower grades resulting from the partial collapse of one wall of the Cockburn pit, along with lower tonnages from the high-grade Lotus underground mine.
The company also has a 37.5% interest in the Emily Ann nickel project, situated in the Lake Johnston greenstone belt of Western Australia.
Metallurgical tests indicate recoveries of 85-90%, with 12-17% nickel grades in concentrates, and a mine study is under way.
Resources at Emily Ann, based on a 1% cutoff, stand at 2 million tonnes grading 4% nickel, equivalent to 80,000 tonnes.
A new nickel sulphide occurrence was recently discovered 3.5 kn north of Emily Ann. Intersections achieved by diamond drilling indicate 5.16% nickel over 1 metre and 1.17% nickel over 15 metres. The mineralization is open in all directions.
Another Aussie nickel project operated by LionOre is Maggie Hays, where indicated and inferred resources, based on a 0.7%-nickel cutoff, stand at 14.8 million tonnes grading 1.45% nickel.
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