Dia Bras brings in Q2 revenue of $6.7M

Dia Bras Exploration (DIB-V, DBEXF-O)says it’s on target to process 144,000 tonnes of ore in 2008 at its pilot mining projects in Chihuahua state, Mexico.

The company expects grades to average 1.4% copper and 8% zinc at its Bolivar copper-zinc mine and so far it’s comfortably above the mark.

During the second quarter, Dia Bras processed 33,880 tonnes of ore from Bolivar, which averaged 1.64% copper and 8.49% zinc.

From that, the company produced 1,676 dry tonnes of copper concentrate and 4,580 tonnes of dry zinc concentrate sold for US$6.7 million.

That’s nearly a 40% increase over revenue in the second quarter last year — a result of increased mill throughput and strong copper prices helping to offset the 40% drop in the zinc price since last September. Zinc now fetches around US75 per lb.

Billing settlements totalling US$2.6 million were taken care of during the second quarter, having an impact on the company’s cash flow. The settlements were related to 2007 zinc shipments.

Dia Bras also reported that it had reduced operating cash costs by 14.5% to US$108.91 per dry tonne from US$127.48 in 2007.

The company still plans to be careful with its cash flow. In July, it initiated a quotation period hedging program on its open copper position to guarantee final settlement prices on about 90% of the shipped copper concentrate. Dia Bras wants to do the same thing with its future zinc concentrate shipments.

The company’s been producing for a while, but commercial production won’t be declared until after a positive feasibility study is completed.

The company’s current cash position is $3.5 million. It has received a US$2-million loan from MRI Trading, a Swiss-based, privately owned commodity trading company for working capital.

Dia Bras has agreed to sell all of its zinc, copper, lead and silver production to MRI until mid-2010.

Over at the Cusi mine and Malpaso mill, Dia Bras processed 1,730 tonnes of ore grading 3.12% lead, 116 grams silver per tonne and 2.2% zinc for a total 61 dry tonnes of lead-silver concentrate and 47 dry tonnes of zinc. Revenue from Cusi totalled $133,000.