Novicourt’s profits down

Yet another Canadian mining company has reported a drop in fourth-quarter earnings as a result of lacklustre metal prices.

Novicourt (NOV-T), which is 61% owned by Noranda (NOR-T), earned $1.1 million (or 3cents per share) for the last three months of 1997 and $6.9 million (17cents per share) for the year, compared with $2.2 million (5cents per share) and $10.2 million (25cents per share) in the corresponding periods of 1996.

Novicourt’s cash flow dipped to $35.7 million in 1997 from $38.5 million in 1996. Nevertheless, at the end of last year, the company was debt-free, with $8 million in cash on hand, compared with a deficit of $900,000 at the end of 1996.

The company’s financial performance was especially hampered by the sharp decline in copper prices. The red metal averaged only US87cents per lb. in the fourth quarter, compared with US98cents in the last three months of 1996.

For the year, the price averaged $US1.03 per lb., compared with $US1.04 in 1996.

The company reports that higher copper production at its 45%-held Louvicourt polymetallic mine near Val d’Or, Que. and lower interest costs in 1997 were more than offset by increases in smelting and refining charges, depreciation and amortization expense, as well as tax provisions.

The Louvicourt mine reached an average daily production rate of about 4,300 tonnes in 1997, only slightly lower than the daily rate in 1996, but with a higher average copper grade of 3.7% versus 3.4% the previous year. Recoveries of copper, gold and silver in copper concentrate were all higher than in the previous year, Novicourt states.

Novicourt shares the Louvicourt mine with operator Aur Resources (AUR-T) (30%) and Teck (TEK-T) (25%).

The orebody, which extends from about 600 metres to 1,000 metres below surface, has been segmented into two mining blocks separated by a horizontal sill pillar. At full operating capacity, the mine produces 4,000 tonnes per day.

At the end of 1996, minable, diluted reserves were pegged at 12.5 million tonnes grading 3.6% copper and 1.5% zinc, plus 28.9 grams silver and 0.84 gram gold per tonne.