Damang gives Repadre earnings boost

With a share in production from the Damang gold mine in Ghana now part of its portfolio, Repadre Capital (RPD-T) has posted earnings of $4.1 million (or 10 per share) on revenue of $5.9 million in the three months ended Sept. 30.

Damang, in which Repadre now owns an 18.9% interest, produced 70,200 oz. in the quarter at a total cash cost of US$263 per oz. Its larger neighbour, the Tarkwa mine, in which Repadre holds an identical stake, produced 148,800 oz. at US$180 per oz. Both are operated by Gold Fields (GFI-N), which owns the remaining interest in the two projects.

Royalty revenue at Repadre increased further in the quarter, to $892,000, as the Vueltas del Rio mine in Honduras, owned by Geomaque Explorations (geo-t), began paying out royalties that had accrued since the start of production in the first half of 2001.

The company also booked an unrealized $741,000 gain on foreign exchange; its royalty income is mainly in U.S. dollars, which appreciated about 5% against the Canadian dollar in the third quarter.

Repadre’s quarterly results represented a big jump from the corresponding period in 2001, when the company earned $1.6 million on revenue of $3.1 million.

For the first nine months of the year, Repadre is showing a profit of $10.2 million on revenue of $13.9 million. At last year’s quarter-pole, the company had earned $4.4 million on revenue of $7.6 million.

At the end of the quarter, Repadre, which announced its intention to merge with Iamgold (IMG-T) in late October (T.N.M., Nov. 4/02), had $45.7 million in cash and $661,000 in gold, and a further $2 million in other current assets. On the same date, Iamgold had $27.4 million in cash and $48.4 million in bullion (US$17.3 million and US$30.5 million, respectively).

Three other royalty streams are set to kick in for Repadre. The Magistral mine, owned by Queenstake Resources (QRL-T), started production in October; Repadre holds a variable royalty of 1-3.5%. Diamond shipments from the Diavik mine, owned by Rio Tinto (rtp-n) and Aber Diamond (ABZ-T), are to start in February, and Repadre owns a 1% royalty. Lastly, the Don Mario gold mine in Bolivia, owned by Orvana Minerals (ORV-T), where Repadre owns a 3% net smelter return, is on schedule to start production in the first quarter of 2003.