Vancouver — Improved earnings from coal operations and
The Vancouver-based major tabled earnings of $25 million (or 22 per share) on revenue of $183 million, compared with a profit of $12 million (11 per share) on revenue of $155 million in the third quarter of 1999. The dramatic increase was attributed to a $4-million operating profit from Teck’s coal division (which incurred a $4-million loss a year ago) and $23 million in equity earnings from its 50% stake in Cominco (up from $11 million last year).
“Management’s efforts to reduce costs and invest in new development projects are beginning to pay benefits,” says President Steven Dean.
Cash flow from operations, before working capital adjustments, was $21 million during the recent quarter, unchanged from a year ago. Teck has $65 million in working capital, down from $196 million at the end of the second quarter. The drop is attributed to the purchase, in August, of 4 million Cominco shares at a cost of $100 million. Teck now holds 42.6 million shares of Cominco. At Sept. 30, Teck’s cash position stood at $129 million.
For the first nine months of the year, net earnings weighed in at $43 million on revenue of $509 million, compared with $12 million on revenue of $469 million during the corresponding period in 1999. Cash flow from operations rose to $75 million from $70 million between the two periods.
Teck produced 116,601 oz. gold during the third quarter, compared with 133,382 oz. a year ago. The decrease is due to lower gold production at the Tarmoola mine in Western Australia. The average realized gold price slipped to US$300, from US$309 per oz. a year ago, whereas cash operating costs rose slightly to US$185 from US$181 per oz.
Teck’s 50% share of production at the Williams mine, near Hemlo, Ont., amounted to 52,948 oz. — a 3% increase over the comparable period last year. Cash operating costs rang in at US$181 per oz. — a 4% decrease. The improved operating results were attributed to higher mill throughput.
The 50%-owned David Bell mine, also in the Hemlo camp, cranked out 21,997 oz. for Teck (a 10% decrease over last year’s third quarter) at a cash operating cost of US$187 per oz. (a 14% increase). The difference is attributed to lower mill throughput and a slight reduction in the average grade.
Production at Tarmoola fell to 39,300 oz. from 56,418 oz. between the two periods, owing to a waste removal phase that required the treatment of low-grade stockpiled ore. However, record mill throughput and lower operating costs kept cash operating costs at US$189 per oz., compared with US$182 a year ago.
At the Pogo deposit in Alaska, Teck and its joint-venture partner, Sumitomo Metal & Mining of Japan, continue to carry out feasibility work, geotechnical studies, resource estimation and permitting. Results from a 2-phase pilot plant indicate good gravity recovery of gold, and public hearings for the draft of the environmental impact statement (EIS) are scheduled for next April. The final EIS is expected to be completed in the following October. Teck stands to earn a 40% interest in the gold project.
The Carosue Dam project, in Western Australia, is reported to be ahead of schedule and within budget, with engineering design and procurement complete. The major equipment is on-site, and commissioning of the plant is anticipated for November. Contract prestrip mining began in July. “We forecast that this project to come within 1% of its capital cost estimate of US$28 million,” says Dean.
Teck cranked out a total of 30 million lbs. in the recent quarter, compared with 20 million lbs. a year ago. The average realized copper price was US81 per lb., compared with US82.
The increase is attributed to the resumption of operations at the Highland Valley Copper mine, near Kamloops, B.C. Teck holds a 13.9% stake in the operation; Cominco holds 50%; privately owned Highmont Mining has 2.5%; and London-based
Teck produced 1.35 million tonnes of metallurgical coal in the 3-month period, up significantly from 914,829 tonnes a year ago. The increase is a reflection of lower operating and transportation costs.
The Elkview coal mine, in southeastern British Columbia, is being expanded to 5 million from 2.8 million tonnes.
Meanwhile, the large Antamina base metal project in Peru is reportedly on schedule and on budget. To date, the company has invested US$145 million in the project. Engineering is almost complete and the overall construction of permanent facilities is 64% finished. The pipeline contractor has installed 220 km of pipe, or 70% of the total line. At the port, the construction of onshore and offshore facilities is 60% finished, whereas construction of the starter dam is now ready to impound water (the dam is critical to the mill’s startup, and water needs to be captured during the rainy season).
Antamina is owned 33.75% by Billiton (acquired through Rio Algom), 33.75% by
In Mexico’s Zacatecas state, the feasibility study for the San Nicolas deposit is progressing and a revised resource is currently being calculated. The company has initiated an EIS, which is expected to be completed in the first half of 2001.
San Nicolas is owned 66.25% by Teck and 33.75% by
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