Kerr Addison in red after writedown

Toronto-based Kerr Addison Mines (TSE) was forced to break out the red ink in the first quarter of 1992 after taking a $3.2-million writedown on its 46% stake in zinc exploration company RFC Finance (TSE).

At the Kerr Addison annual meeting in Toronto, President Andre Fortier also attributed a quarterly loss of $1.4 million or 8 cents a share on revenue of $34.3 million to lower output and mine closures at 50.4% owned Minnova (TSE). In the first three months of 1991, Kerr Addison reported a net profit of $5.5 million or 31 cents a share on revenue of $44.6 million.

Minnova has the option to acquire Kerr Addison’s 46% interest in RFC Finance by spending $500,000 on exploration at the Pend Oreille zinc project in Washington and paying 43 cents each for Kerr’s 4.6 million RFC shares. While Kerr Addison originally bought the shares for $1.14, Fortier says he is confident that his company will eventually benefit indirectly from the sale if and when Pend Oreille is brought into production.

Pending an upturn in copper and zinc prices, Fortier said he is anticipating better results for Kerr Addison in the second quarter of 1992. A 48% owned affiliate of Noranda (TSE), Kerr has been trying to unload a number of assets including a 30.5% stake in oil and gas company Anderson Exploration. But after the meeting, Fortier said the company wouldn’t be prepared to sell its 6.2 million Anderson shares at the recent trading price of $9 because he believes the assets are worth much more. Kerr Addison originally paid around $19 each for the shares.

To strengthen its cash position, Kerr is also planning to sell 7.2 million shares of Noranda (which recently traded at $16.50) and a 9% interest in Canadian Electrolytic Zinc Ltd.

With $143.8 million in working capital and a long-term debt position of $45 million, Kerr Addison has declared a regular 15 cents dividend to be paid June 15, to shareholders of record on May 25, 1992.