Low costs salvage profit for Aur

The smooth operation of two low-cost mines enabled Aur Resources (AUR-T) to turn a fourth-quarter profit in the face of lower copper and zinc prices.

Aur reported earnings of $377,000 (or 1 cent per share) in the quarter ended March 31, the end of its fiscal year. Revenues for the period were $19.7 million. In the corresponding period in 1997, Aur earned $3.6 million on revenues of $24.2 million.

For the 1997 fiscal year, Aur earned $3 million (4 cents per share) on revenues of $107.5 million. In 1996, earnings were $12.4 million on revenues of $59.9 million. Aur’s two mines, Louvicourt in northwestern Quebec and Andacollo in northern Chile, both turned in good performances, with Aur’s 30% share of Louvicourt’s operating income reaching $24.2 million and its 70% share of Andacollo’s equalling $17.6 million.

Lower byproduct credits pushed Aur’s operating costs up slightly, to US57cents per lb. from US55cents per lb. in the first quarter of the previous year.

The company does not hedge its copper production, and President James Gill remarked at the annual meeting that management has no intention of starting a hedging program as long as no significant debt is attached to its copper production. In December, the company repaid its bank debt from the development of Andacollo.

Andacollo, in full operation since March 1997, currently exploits an open-pit oxide resource, recovering the copper by heap leaching and solvent extraction-electrowinning. A prefeasibility study on the primary copper mineralization at Andacollo is scheduled for this year. Gill said the deposit was probably not economic at current copper prices, but that prices over US90cents per lb. might make development of the primary zone profitable.