Tati Nickel provides roar for LionOre

During the last three months of 2002, LionOre Mining International (LIM-T) managed to boost earnings to US$3.6 million (or 2 per fully diluted share) on revenue of US$42.7 million.

That compares with a loss of US$1.5 million (1 per share) on revenue of US$489,254 in the corresponding period of 2001. Cash generated from operations rose to US$861,812 from US$260,178.

Overall, earnings in 2002 came to US$2.7 million (or 2 per fully diluted share) on revenue of US$62.8 million, compared with a loss of US$555,474 (nil per share) on US$870,465 in 2001. Cash flow climbed to US$5.2 million from the US$6.6 million consumed in 2001.

The latest results include those of Tati Nickel Mining Co., which has operations in Botswana. In late September 2002, LionOre acquired a 43.35% stake in Tati, a 7.5% direct interest in BCL, and a 12.65% stake in Botswana RST (which in turn owns 85% of BCL) from Anglo American (AAUK-Q) in return for US$75.9 million. In the end, LionOre’s stake in Tati grew to 85%; the government of Botswana holds the balance.

Tati Nickel operates two mines near Francistown: Selkirk, an underground operation, and Phoenix, an open pit. In 2002, Tati produced 7,503 tonnes of nickel, up from 6,305 tonnes in the previous year, while cash costs climbed to US$2.35 from US$1.83 per lb.

LionOre’s board has approved a US$9-million Activox demonstration plant at Tati Nickel.

Tati chipped in earnings (before minority interests) of US$1.3 million for the fourth quarter and US$2.6 million for all of 2002, down from US$4.1 million and US$12.7 million, respectively, in corresponding year-earlier periods. Earnings were hampered by a strengthening pula and higher operating costs associated with the ramping-up to full steam of the new concentrator.

Meanwhile, the BCL smelter, which had been shut down for repairs to the uptake shaft of the flash smelting furnace, has resumed processing Tati Nickel’s concentrate. Some 292,000 tonnes are to be processed this year.

At the end of 2002, LionOre had US$29.3 million in cash and equivalents, double that of a year earlier. However, long-tern debt was US$75.1 million, or more than double the figure reported at the end of 2001.