TVX eyes exits in Greece

TVX Gold (TVX-T) has posted first-quarter net earnings of US$1.5 million (nil per share) on revenues of US$44.7 million.

That compares with year-ago net earnings of US$3.7 million (or 2 per share) on revenue of US$39.3 million. The year-ago earnings benefited form a US$2.2 million mark-to-market gain on financial instruments, which was absent from 2002 earnings. Cash flow between the two periods from operations tailed ff to US$4 million from US$6.3 million.

The latest quarter saw good performance from the La Coipa, Brasilia, Crixas and New Britannia mines. That was offset by a difficult quarter at the Musselwhite mine. Consolidated gold equivalent production amounted to 117,900 ounces, 58,950 ounces toward TVX’s account. Total cash costs rang in at US$186 per oz. A year earlier, consolidated production was 115,800 ounces at US$196 per ounce.

First quarter production at Musselwhite came to 54,300 ounces (TVX share was 8,675 ounces), 6% off last year’s pace. Total cash costs climbed 8% to US$202 per oz. The drop in production is attributed to 18% fewer tonnes mined and milled thanks in large to a switch from transverse to longitudinal longhole mining and two backfill failures.

The development of the underground conveyor system and crushing facility remains on schedule for completion by the end of the second. TVX looks for this to improve productivity and reduce costs.

Meanwhile in Greece, production at Stratoni suffered mining restrictions emplaced by a local mining inspector. The restrictions remained until Feb. 15, 2002 when the Greek Government issued a new mining permit. A hearing over a local action group’s petition to annul the new permit is slated for June 7. A petition for a suspension of operations is to be heard on May 27.

During the quarter, Stratoni produced 8,300 tonnes zinc, 6,500 tonnes lead and 503,400 oz. of silver, better, save for lead, from a year earlier.

At Olympias, the Greek Conseil d’Etat annulled permits issued by the Greek Government. TVX is considering it options to “recover its significant investment in Greece.”

TVX took a writedown of US$ 244.5 million in the fourth quarter of 2001 owing to Olympias.

According to the Associated Press, TVX says it no long considers its Greek operation part of its long-term growth strategy.

At its annual meeting on Thursday, TVX’s CEO Sean Harvey said, “A poor business environment leaves the future of the operation [Stratoni] uncertain.”

Harvey added that to survive, Stratoni must remain profitable.

At the end of March, TVX had US$53.7 million in cash and short-term investments. Long-term and current debt totalled US$74.2 million.