After $3.4 million gained on asset sales and a one-time $20-million reduction in the company’s provision for reclamation costs, net income was $31.8 million (81 cents a share). The gain came on Inmet’s sale of its minority interest in the Navachab gold mine in Namibia.
In the third quarter of 1998, Inmet earned $8.7 million on revenue of $16.1 million. In the same period, the company registered
a gain of $7.5 million on asset sales and $31.6 million on discontinued operations, for net income of
$47.7 million.
In the nine months ended Sept. 30, Inmet is showing a profit of $35.6 million. Revenue was $85.4 million, down from $87 million in the corresponding period of 1998. Minus the asset sales and the gain on reclamation costs, 9-month earnings are $11.8 million, well ahead of last year’s 9-month mark of $6.5 million.
Inmet’s 49% interest in the Cayeli copper-zinc mine in Turkey remains the company’s top moneymaker, with an operating profit of $7.4 million in the quarter and $14.8 million in the first nine months of 1999. Mill throughput, copper grades, and mill recoveries all helped the mine turn out a record 10,700 tonnes copper.
Zinc head grades at Cayeli were lower in the quarter, and zinc production fell to 7,800 tonnes, against 9,500 tonnes in the third quarter of 1998. Production costs, measured per unit of copper, continue to decline: over the first nine months of the year, they averaged US$880 per tonne, down from US$1,015 per tonne a year ago.
The expanded mill at the wholly owned Troilus gold mine in north-central Quebec has increased production as well, pouring 41,700 oz. gold in the quarter, compared with 37,700 oz. in the third quarter of 1998. In the first nine months of 1999, Troilus produced 125,000 oz.
Lower gold prices decreased Troilus’s operating earnings, though this was partly offset by declining production costs. Cash costs at the mine during the first nine months of 1999 fell to US$233 per oz., compared with US$248 a year ago.
Lower production from the Ok Tedi mine in Papua New Guinea, in which Inmet has an 18% interest, was offset by gains the operation made on foreign exchange transactions. Although Ok Tedi made $2 million for Inmet in the third quarter of 1999 (down from $2.3 million in the corresponding period of 1998), the operation continues to suffer waste management problems. Inmet expects discussions with local residents and the government (itself a major shareholder in Ok Tedi) to continue through to the end of the year.
Inmet’s balance sheet provision for reclamation and mine closure costs stands at $68 million.
The company revegetated an 8-sq.-km area at its closed Copper Range mine on the northern peninsula in Michigan, allowing a revised cost estimate there, and it has bought environmental liability insurance to cover costs above $30 million for reclamation work at Copper Range, Winston Lake in Ontario, and Norbec in Quebec.
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