Boliden’s losses narrow

The losses of cash-strapped, Swedish-Canadian miner Boliden (BOL-T) shrank in the latest quarter, thanks to increased mining and smelting production.

For the three months ended June 30, the company posted an operating loss of US$11 million, compared with a year-ago operating loss of US$34.7 million. Revenue between the two periods rose slightly to US$259.7 million from US$258.6 million.

For the first half of 2001, the company’s operating loss tallied US$19.9 million, less than half the US$41.1-million loss in the same period of 2000. Year-to-date revenue is US$571.5 million, up from US$551.4 million a year earlier.

Boliden’s mining operations contributed a loss of $6 million for the quarter and $14.4 million for the first six months of 2001, compared with losses of $27.2 million and $43.3 million in the same respective periods of 2000. The improvement was due to improved operating efficiencies, higher contained gold and contained zinc production.

During the recent quarter, the total contained metal production at Boliden’s mines was 64,818 tonnes zinc (59,870 tonnes a year earlier), 39,165 tonnes copper (37,644 tonnes), 27,715 tonnes lead (32,363 tonnes), 44,382 oz. gold (33,197 oz.) and 2,552 oz. silver (2,349 oz.).

Smelting operations chipped in an operating loss of US$400,00 during the latest quarter (US$1.9 million for the half), down from a year-ago losses of $2.2 million ($11.8 million for the half). The improvement is thanks to the completion of an expansion project at the Ronnskar smelter in Sweden.

The company’s foreign currency hedge contracts negatively affected operating results by US$40.4 million for the half, compared with $26 million for the same period in 2000.

Boliden also announced that the terms for a proposed share issue, which is part of a bailout package, have been fulfilled.

Under the proposal, US$105 million will be raised in a rights offer to existing shareholders, with another US$138 million raised by a share issue to Boliden shareholders, Swedish investors and the company’s creditors.

The proceeds of the rights offering are earmarked for refinancing of the company’s operations. The funds from the directed share offering will be applied to debt reduction.

Successful completion of the share issue is a condition for a group of banks to complete a plan to restructure about US$800 million of the company’s debts.

The equity offerings will be completed during August.