Aur Res. enjoys strong quarter

Aur Resources (AUR-T) has reported higher quarterly earnings, thanks to better operating performances at the Louvicourt and Andacollo mines.

For the three months ended June 30, the copper miner netted $1.5 million (or 2 cents per share) on revenue of $26 million, compared with earnings of $500,000 (nil per share) on $25 million in the corresponding period of 1998. The increase was achieved despite a US12 cents drop in average realized copper prices to US67 cents per lb.

Cash flow rose to $5.5 million from $4.6 million between the two periods, whereas working capital fell to $90.1 million from $93 million.

Earnings for the six months ended June 30 were $2.1 million (3 cents per share) on $49.5 million, compared with $900,000 (1 cents per share) on $46.4 million in the first half of 1998. Cash flow rose 21% to $9.8 million.

Attributable production during the recent quarter topped 19.9 million lbs. copper, 3.6 million lbs. zinc, 102,000 oz. silver and 4,100 oz. gold. All were produced at an average of US42 cents per lb. copper, net of byproduct credits, or 13% less than in the second quarter of 1998.

The Louvicourt mine in Quebec processed 405,500 tonnes at US40 cents per lb. copper, or 10% below budget, to yield 37.4 million lbs. copper, 12 million lbs. zinc, 337,000 oz. silver and 13,700 oz. gold. The mine is expected to meet or surpass both production and cost targets for the year.

Andacollo, in Chile, churned out 12.3 million lbs. of copper cathode from 395,520 tonnes processed. Operating costs averaged 46 cents per lb. — a record, and 12% under budget. In May, the mine received registration from the London Metal Exchange and has, from August to December, 5,000 tonnes copper sold forward at US75 cents per lb.

Aur operates both mines, receiving 30% of Louvicourt’s output and 70% of Andacollo’s. The remaining interest in the former is divided between Teck (TEK-T), with 25%, and Novicourt (NOV-T), with 45%. A private Chilean company holds the remaining interest in Andacollo, with the government retaining a 10% net profits interest.

Meanwhile, Aur plans to merge one of its units with Consolidated Abitibi Resources (CAQ-M), in which it already owns a 34% equity interest and shares similar management. If approved, the deal would see the producer exchange one share for every 22 Abitibi shares, resulting in 572,000 new shares being issued and its total outstanding shares rising to 75.7 million.