Teck’s earnings decline despite boost Hemlo interests

As expected Teck (TSE) reported a healthy boost in operating profit for 1990 from its 50% interests in the David Bell and Williams gold mines at Helmo, Ont.

Gold production from the Hemlo mines totalled 912,000 oz. for the year, a 13% increase over production of 806,000 oz. in 1989. Teck’s 50% share of operating profit from the two mines was $124 million, compared with $105 million a year earlier. The average production cost per oz. was US$166 at Williams.

However Teck’s 1990 net earnings were lower than the previous year because of a reduced contribution from Cominco (TSE) whose earnings were affected by lower base metal production and lower metal prices. Teck holds a 21% (direct and indirect) interest in Comico which contributed just $3 million to Teck’s 1990 net earnings, down from $34 million in 1989.

Teck’s reported net earnings of $90.6 million or $1.10 per share on revenues of $474 million for fiscal 1990, compared with net earnings of $106.4 million (before extraordinary items) or $1.31 per on revenues of $414 million in 1989. Operating profit from the mining activities for the year was $202 million, up from $176 million in 1989.

Under the terms of a recent agreement with Japanese buyers, the price of coal shipped from April, 1989 (the start of the price review period) to the end of 1990 averaged $97.86 per tonne and will not be reduced. Teck said coal shipped from Jan. 1 will be priced at $88.26 per tonne, but escalated quarterly.