Anvil Range turns profit at Faro

The first full quarter of commercial production at the Faro open-pit zinc-lead-silver mine in the Yukon netted earnings of $756,000 for owner Anvil Range Mining (TSE).

The bottom line, however, was adversely affected by lower-than-expected milling recoveries. Zinc recovery averaged 68-70%, compared with the 78% target, while lead recoveries came in at 75-76%, compared with a target of 78%.

Production difficulties at the mill also contributed to low rates of recovery, as well as to higher operating costs.

Kurt Forgaard, president of Anvil, is confident recoveries will improve and costs will decrease in the near term.

Anvil mined 8 million tonnes of ore and waste during the 3-month period ended Jan. 31, with mill throughput totalling 1 million tonnes grading 7.74% combined lead and zinc.

Output for the quarter totalled 70,500 tonnes of zinc concentrate and 38,600 tonnes of lead concentrate, grading 51% and 61%, respectively. Metal prices averaged US46 CENTS per lb. for zinc and US34 CENTS per lb. for lead for the same period.

Anvil completed a $30.2-million convertible debenture financing during the quarter to fund this year’s planned $5-million exploration program. An additional $5 million will be invested in capital expenditures, and the balance will be used for working capital. The debenture carries an 8.5% yield and is convertible into common stock at $7.10 per share. Anvil has 16.4 million shares outstanding.

Exploration work will focus on outlining additional reserves at the Grum and Dy deposits, and on testing peripheral areas. The company controls 41,500 hectares in and around the mine, which has, based on current estimates, reserves to support operations through 2005.