Rio Algom aims for top producer status

Lower copper prices over the past year may have contributed to a sluggish year for Rio Algom (ROM-T), but Chairman Gordon Gray is confident the company will eventually become Canada’s premier copper producer.

Addressing a packed house at the company’s annual meeting, Gray touted the emergence of a “new” Rio Algom, predicting the company will triple its annual production to more than 900 million lb. by 2002. Such an increase would propel Rio Algom to the forefront of Canada’s copper producers.

Among the projects that are expected to enable Rio to achieve that status are: * the ongoing operation of the Highland Valley copper-molybdenum mine in British Columbia;

* A forecast increase in production from Chile’s Cerro Colorado mine, as well as exploration of the Spence deposit;

* a successful bid for the Antamina copper-zinc project Peru with partner Inmet Mining (IMN-T); and

* startup of the Alumbrera gold-copper project in Argentina.

The planned increase in copper production, however, comes on the heels of decreased revenues and earnings for 1996 and for the first quarter of 1997, as a result of lower copper prices.

Rio’s revenues for the first quarter of 1997 totalled $444.4 million, compared with $479.9 million for the same period in 1996. Rio earned $18.9 million (or 29 cents per share) in the first quarter of the year, down from $23 million (43 cents per share) for the same period in 1996.

Rio’s revenues in 1996 amounted to $1.8 billion, compared with nearly $2 billion in the previous year. Net earnings for 1996 totalled $100.4 million, down from $132.4 million in 1995.

Rio plans to spend $2 billion over the next five years, much of it on the development of new mines.

Last year marked the closure of the Stanleigh uranium mine in Elliot Lake, Ont. The mine originally started production in 1958 and was one of the flagship operations of the Elliot Lake uranium camp.

The company will remain active in uranium mining through its 2-million-lb.-per-year leach operation at Smith Ranch, Wyo., where production is due to begin by mid-year.

At the meeting, Gray dismissed rumors that the company was the target of takeovers or mergers with such majors as Noranda, North

and Inmet.