Minnova’s cost control effort pays off with better earnings

Toronto-based Minnova’s (TSE) concerted effort to compensate for lower metal prices and higher smelting charges by keeping operating costs down has clearly been successful.

While revenues in the three months ended Sept. 30 declined to $33.4 million from $49.3 million last year, third-quarter profits increased to $2.6 million or 18 a share, from $494,000 or 4 a share in the equivalent 1990 period. Despite weaknesses in the metal markets, Minnova also succeeded in keeping earnings for the first nine months of this year on an even keel. The 50.4% owned Kerr Addison (TSE) affiliate reports net income of $10.9 million or 76 a share in the 9-month period, compared with earnings of $11 million or 77 a share last year. Nine-month revenues declined slightly to $114.6 million from $148 million a year ago.

Minnova President Dave Watkins attributed the results to strong production performances at four mines including the now-exhausted Opemiska operation in Quebec and to reduced operating costs.

With an emphasis on building new reserves, Minnova is active on a number of fronts including the Mobrun polymetallic mine near Rouyn-Noranda, Que., where it has almost exercised an option to earn 50% of the 1100 lens. Minnova says it will fulfil its obligations to owner and operator Audrey Resources (TSE) by contributing $1.4 million toward a $4.2-million exploration program designed to probe for downdip extensions of the 1100.

Minnova has also completed exploration drilling at the Pick Lake project near Schreiber, Ont., where it has outlined 1.6 million tonnes of 1.1% copper and 17.7% zinc in the upper and lower zones.