The weak Asian economy and low gold prices have led management of Mazarin (MAZ-T) to withdraw from gold exploration in order to refocus on the company’s industrial mineral operations in Quebec.
Two years ago, the company launched a program aimed at diversifying beyond asbestos, then its sole source of revenue. As part of that effort, the company acquired a dolomite quarry through its subsidiary, Dolomex. More recently, the company invested in the construction of a calcium aluminate plant that used a process for which Mazarin holds joint patent rights with Alcan. At the same time, the company began exploring for gold, mainly in Haiti, Peru and Uzbekistan.
The decision to focus on industrial minerals reflects the economic downturn in Asia, as well as France’s decision to ban asbestos. Both factors have brought about reduced earnings for Mazarin’s subsidiaries.
Owing to the persistently weak gold price, Mazarin withdrew from its exploration projects. The decision resulted in a $600,000 writedown in the fourth quarter of 1997. In the same period, the company wrotedown its $3.2-million investment in the Lac Knife graphite property in Quebec.
Mazarin intends to devote its resources and energies to industrial minerals projects in its home province. The company notes that the calcium aluminate plant has been operating in a startup mode for three months, and began making regular deliveries to customers several weeks ago.
An optimization program is currently under way at the Dolomex facilities. The program, scheduled for completion in early March, will boost production to 125,000 tonnes per year. The company also streamlined its administrative structure and reduced overall expenses.
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