Faced with lower market prices for the red metal, MSV Resources (MSV-T) is continuing to limit production at the Copper Rand and Portage copper mines near Chibougamau, Que.
By restricting mining to stopes with high gold grades, the company has already succeeded in reducing its unit costs and squeezing some modest earnings from significantly lower revenues.
With average selling prices for copper at 78% of 1995 levels, the strategy paid off in the third quarter, when unit costs totalled $57.05 per ton — down from $63.01 in the previous quarter and $61.92 in the third quarter of 1995.
Third-quarter revenue amounted to $10.8 million — down from $13.4 million in the third quarter of 1995. The company posted $163,995 in earnings, compared with $421,905 in the same period last year. The lower realized price for copper — $1.20 per lb., compared with $1.63 in the same period of 1995 — accounted for a substantial part of the drop in revenues.
About two-thirds of the company’s copper production has been sold on the futures market at an average price of $1.105 per lb. The rest — 3.4 million lb. — will be sold at prices based on November and January market averages.
The past quarter’s slim earnings were still an improvement on results in the second quarter, when MSV lost $940,138.
However, for the first nine months of 1996, the company posted a loss of $1 million on revenue of $36.6 million, compared with earnings of $2.4 million on $41.8 million for the same period last year.
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