Bucking the industry trend,
Earnings topped US$4 million (or 1 per share) on revenue of US$42.1 million, compared with US$4.9 million on US$41.1 million in the corresponding period of 1999.
Cash flow between the two periods rose to US$14.5 million from US$3.6 million. The increase is a reflection of lower working capital requirements arising from a new partnership with
In mid-1999, TVX and Normandy formed TVXNormandy Americas to oversee their gold assets in the Americas, including the former company’s various interests in five mines: La Coipa (50%) in Chile; Crixas (50%) and Brasilia (49%) in Brazil; and New Britannia (50%) and Musselwhite (32%) in Canada. The deal essentially saw TVX relinquish half of its interests in those mines in exchange for $211 million in cash, a $150-million line-of-credit and funding commitments for its share of acquisition costs incurred by the joint venture in the first three years.
As a result of the deal, TVX’s attributable production in the recent quarter topped only 62,200 oz. gold-equivalent, compared with 142,970 equivalent ounces a year ago. However, the shortfall was offset by a resumption in mining at the wholly owned Stratori lead-zinc-silver project, in Greece, where 262,000 oz. silver, 4,188 tonnes lead and 4,234 tonnes zinc in concentrates were produced.
Operating costs at the mines, excluding Stratoni, averaged US$170 per oz., up 9% from a year ago. Owing to lower accounting costs, production costs remained unchanged at US$242 per oz.
TVX sold its refined gold for US$365 per oz. and its refined silver for US$4.30 per oz.
At La Coipa, production was down significantly and cash costs up significantly from a year ago, owing to a switch to the lower-grade Coipa Norte pit and temporary suspension of mining at the Ladera Farellon pit. However, this was slightly offset by better performances at the other mines under the TVX-Normandy umbrella.
Meanwhile, an archeological study at the Olympias project, in Greece, has identified three areas of historical significance; none, however, is expected to have an impact on the project. A final report (all that is now required to complete the environmental impact study) is expected in the coming weeks.
Final hearings
Also, the Supreme Court of Greece has scheduled for June 2 final hearings for all outstanding legal challenges against Olympias. The company’s wholly owned Greek subsidiary, TVX Hellas, and other interested parties will speak in support of the project.
Olympias has a reserve of 9.1 million tonnes that grades 4.6% lead and 5.8% zinc, plus 8.7 grams gold and 138 grams silver per tonne. There is also a stockpile of 300,000 tonnes grading 22.9 grams gold and 24 grams silver, and a total of 2.4 million tonnes of tailings grading 3.4 grams gold and 14 grams silver. The tailings are expected to be reprocessed.
Meanwhile, the ongoing legal battle involving TVX, a group of investors known as the Alpha Group and 1235866 Ontario Inc. has moved a step forward: all have completed their submissions to the Ontario Court of Appeal.
The legal wrangling relates to a 1998 Ontario Court of Justice ruling in which the Alpha Group was granted a 12% carried interest and an option to buy a 12% participating interest in the Kassandra property, which includes Olympias but excludes Stratoni.
For its part, 1235866 Ontario Inc., the successor to bankrupt Curragh Resources, and two associated companies, requested that the judgment be dismissed and a new trial begun, at which all three groups would be parties. It claims a breach of fiduciary duty by two of the Alpha investors, who once worked for Curragh. This is the same claim won by the Alpha group.
TVX and the Curragh group of companies have agreed that the plaintiff company, in its suit, will seek only Alpha’s carried interest and right.
The Court of Appeals’ decision is pending.
On March 31, TVX had US$126 million in working capital.
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