Imperial remains mired in red

Operational improvements slightly offset weak returns on gold and copper yet failed to pull Imperial Metals (IPM-T) out of the red during the first quarter.

The loss amounted to $238,000 (or nil per share) on revenue of $24.9 million, compared with a loss of $964,000 (1 per share) on revenue of $23.9 million in the first quarter of 1999.

The operating loss in the recent 3-month period totalled $41,000, compared with an operating profit of $256,000 a year earlier. Capital expenditures between the two periods rose to $2.9 million from $1.9 million, where as long-term debt fell to $3 million from $3.5 million.

The 50%-owned and operated Huckelberry copper-molybdenum mine, 123 km southwest of Houston, B.C., cranked out a total of 18.9 million lbs. copper and 379,698 lbs. moly during the recent quarter. Millhead grades were 0.525% copper and 0.014% moly. The plant milled an average of 19,309 tonnes of ore per day, and recoveries were pegged at 93.2% copper and 71.9% moly.

Imperial Metals also operates, and owns a 52.5% share in, the Mount Polley open pit copper-gold mine, 56 km northeast of Williams Lake, B.C. The mine cranked out 9.3 million tonnes copper and 20,000 oz. gold in the first quarter, at millhead grades of 0.30% copper and 0.44 gram gold. The Mount Polley mill received an average 19,924 tonnes of ore per day with recoveries of 76.14% copper and 78.16% gold.

Imperial’s exploration efforts are currently focused on the Silvertip property, 85 km southwest of Watson Lake, B.C., where a summer drill program is about to get under way. Peruvian Gold (PVO-V) can acquire a 60% interest in the property from Imperial by spending $5 million over three years. Once Peruvian completes its earn-in, Imperial can earn back 20% by spending $2 million over 18 months.

The last round of drilling encountered an east-westerly trending pipe-like body of mineralization, which is stratigraphically lower than the previously defined, manto style of mineralization. The partners believe the drilling has confirmed the presence of multi-phase, high-grade, feeder-style massive sulphide mineralization.

Based on previous drill results, the total mineral resource at Silvertip is estimated at just under 2.6 million tonnes averaging 8.8% zinc and 6.4% lead, plus 325 grams silver and 0.63 gram gold. The measured and indicated portion alone consists of 1.1 million tonnes grading 9.5% zinc and 7.7% lead, plus 378 grams silver and 0.85 gram gold.

Meanwhile, at the ore-depleted Sterling gold mine, in Nevada, Imperial has increased its interest to 100% as part of a debt settlement with Cathedral Gold (CAT-T). From the heap-leach pads, gold continues to be produced in an effort to cover ongoing costs. Imperial is keen on the site’s exploration potential and intends to test high-grade underground targets, as well as low-grade, large-tonnage targets nearer to the surface.