Base metal miners start year in the black

The April 18-24 report period saw Canada’s biggest base metal producers issue a string of relatively healthy first-quarter earnings reports.

Inco announced it had earned US$85 million or US42 a share on revenue of US$586 million. The major also announced it will go ahead with development of the Goro nickel project in New Caledonia. Goro is scheduled to enter full commercial production in late 2004, turning out 54,000 tonnes of nickel and 5,400 tonnes cobalt annually. The nickel producer added $1.24 over the week to close at $27.14.

Cross-town rival Falconbridge checked in with a meager first-quarter profit of just $4.6 million. The company attributes a 20% decline in first-quarter revenue to slumping metal prices, a now-resolved strike in Sudbury and ground-control problems at the Kidd mine, near Timmins, Ont. Falco’s 55%-owner, Noranda, was dragged down by its subsidiary’s performance and saw first-quarter earnings drop 65% to $24 million, with the Sudbury strike shaving $30 million off the parent’s bottom line. Over the week, Falco rose 87 to $17.70, while Noranda was up 38 to $16.40.

Over on the left coast, Teck and its subsidiary Cominco both touched 52-week highs, with the former rising 90 to $17.60 and the latter jumping $1.52 to $30.80. Teck rang up first-quarter profits of $55 million, a $7-million increase helped by: a $124-million profit from Cominco’s power sales; a turnaround in the fortunes of its coal operations; the sale of the Niobec mine in Quebec; and the beginning of commercial production at the Carosue Dam gold mine in Australia. Teck ended the period with $6 million in long-term debt and $368 million in cash. Cominco, in turn, recorded an $83-million profit, thanks mainly to those power sales from its operations in Trail, B.C.

It was another quiet week for gold-explorers, as the yellow metal added US$3.85 to reach a London morning fix of US$263.95 per oz. on April 25.

Canada’s gold majors moved up in sympathy with the price: Barrick Gold edged up 18 to $24.35; Placer Dome gained 15 to $14.85; Franco-Nevada Mining shot up 61 to $18.26; Kinross Gold rose 9 to 81; and TVX Gold popped up 12 to 91.

Placer Dome is evaluating opportunities in platinum groups metals. Although platinum is a niche market, President Jay Taylor believes the metal has the potential “to dovetail strategically” with the company’s core gold business. Commodity diversification is nothing new for Placer, which is already a significant copper producer at its Zaldivar mine in Chile. The mine generated strong earnings last year, while reserves increased by more than 60%, extending Zaldivar’s mine life to more than 20 years.

The Tulawaka gold project in Tanzania’s Lake Victoria Goldfields district continues to generate high-grade results for partners Barrick Gold and Minires du Nord. The junior was up a penny at 80.