No red ink likely on ’87 balance sheet of Eldorado

Saskatchewan uranium producer Eldorado Nuclear could break even for the full year, in sharp contrast with a net loss last year of $64.4 million.

For the nine months ended September 30, the company, 100%- owned by Canada Development Investment Corp, generated record revenues of $198.6 million — a 39% gain over the year-earlier period.

Operations, at Rabbit Lake, Collins Bay and Key Lake, Sask., generated $40 million more cash in the third quarter than in the same year- ago period. Capital spending- related costs declined, increasing the net cash from operations and investments by $54 million.

Significantly higher levels of uranium production were maintained during the quarter.

Higher revenues and reduced costs resulted in a 78% increase in earnings from operations. At $51.2 million, earnings from operations continued to exceed the large financing expenses associated with the company’s highly-leveraged capital structure, the company reports.

During the period, some $27.5 million was made available for repayment of short- and long-term debt.

Long-term debt now stands at $522.5 million.

The company strongly supports the Canada-U.S. Trade Agreement because it “should materially improve the climate for bilateral uranium trade,” Chairman and Chief Executive Officer L.G. Bonar says in the company’s quarterly report.

“Once formally agreed to by both nations, it appears capable of superceding current U.S. laws, which attempt to protect the U.S. uranium industry at the expense of Canadian producers and U.S. consumers,” he adds.

In 1986 Eldorado produced 2,032 tonnes of uranium, 20% of Canada’s total production.