Production shortfalls hurt Minnova Inc.’s bottom line

Lower gold prices and the rising value of the Canadian dollar were also responsible for a net income position that dropped to $0.9 million or 7 cents per share from $3.3 million or 24 cents per share at the same time last year, Minnova says.

A fourth quarter net loss of $0.3 million or 2 cents per share compared to a net profit of $2.4 million or 18 cents per share at the same time last year was due to production shortfalls at three operations. They include the Winston Lake zinc mine at Schreiber, Ont., where the operation is running at only 80% of capacity. Winston Lake produced 74 million lb zinc and 3 million lb copper in 1988.

At Minnova’s 94.2%-owned Lac Shortt gold mine in northwestern Quebec, the mining sequence required the company to mine and mill low grade ore and as a result, total gold production of 78,000 oz was lower than anticipated.

A production shortfall was also reported at Minnova’s Opemiska copper mine in Chibougamau, Que., where copper output was 2 million lb lower than expected.

Of the $45.7 million which Minnova set aside for capital expenditures in 1988, $24.8 million was spent on the Ansil copper project at Rouyn-Noranda, Que. Minnova says ore from the Ansil deposit will be treated at the new ly rehabilitated Norbec concentrator starting next quarter. The project is expected to produce 62.1 million lb copper this year.

Construction is proceeding as planned on the Samatosum precious and base metals deposit near Kamloops, B.C., where commercial production is expected to begin in the fourth quarter of this year.

The Samatosum project is a joint venture involving Minnova (70%) and partner Rea Gold Corp. (TSE) 30%). Minnova is a 50.2%-owned subsidiary of Toronto-based Kerr Addison Mines (TSE).

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