Vancouver – The good times keep rolling for diversified miner Teck Cominco (TEK.B-T, TCKBF-O), which posted record earnings of $613 million, or $2.95 per share, for the second quarter of 2006, and $1.1 billion for the first half of the year. This represents a substantial boost from net earnings of $225 million, or $1.11 per share, in the second quarter of 2005.
President Don Lindsay noted that over the past twelve months, Teck Cominco has generated $2 billion of net earnings during a period when copper and zinc prices averaged US$2.29 per lb. and US$0.96 per lb. per pound, respectively. With current prices significantly higher than those in the previous twelve months, the company is expecting strong earnings to continue in the coming quarters.
Teck ended the quarter with a cash position of $3.6 billion, up $415 million from the previous quarter. Total long-term debt was $1.5 billion. The company has secured additional loans and credit facilities with a view to participating in a competitive — and as yet unresolved — bidding war for Inco (N-T, N-N).
On the operations front, the wholly owned Red Dog mine in Alaska produced at similar rates as a year ago, but profit at the Trail smelter and refineries increased significantly to $107 million from $27 million a year earlier due to higher zinc prices and sales volumes.
Teck Cominco’s 22.5% share of operating profits from the Antamina mine in Peru climbed to $211 million from $77 million a year earlier. Operating profit at Highland Valley in British Columbia also increased dramatically, to $326 million from $145 million a year ago.
On the downside, gold production from the Hemlo gold mines in Ontario slipped 12% to 102,700 oz., while cash costs increased to US$478 per oz. Teck Cominco’s 50% share of profits rose to $4 million from $2 million a year earlier, reflecting higher gold prices. The company’s 40% share of operating profits from the Elk Valley Coal Partnership fell to $119 million from $131 million because of higher costs and lower coal prices.
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