Third-quarter profits helps but Pine Point into the red

Although Pine Point Mines posted a healthy $5.2-million profit in the third quarter, the picture for nine months was less than satisfactory. A loss of $4.6 million was reported, compared to a profit of $4.6 million for the same period the previous year.

According to David L. Johnston, president and chief executive officer, an accelerated mining plan at Pine Point has increased ore stockpiles and concentrates held in inventory at cost. “The results for the period do not reflect any profit from this inventory, which will be reported only when the concentrates are sold,” he said. Firm contracts are in place for their sale, he added.

Production of zinc and lead concentrates was sharply higher during the quarter, reflecting the revised mining plan. The concentrator treated one million tons of ore averaging 8.3% zinc and 3.7% lead.

No significant discoveries were made in a $l-million exploration program during the quarter which was largely funded by flow-through shares. Pointing out that global production levels of zinc have fallen in the past few months, Mr Johnston noted that the European producer price has risen from $700(U.S.) per tonne at the beginning of the year to $920 at the end of the third quarter. World lead prices have also been firming, he said.

These trends, combined with continued cost restraint and high operating productivity, “indicate reasonable prospects for positive fourth-quarter earnings,” he claimed.

Under the accelerated mining plan, the company has built up approximately 168,000 tons of zinc concentrates which will be sold in 1987 and 1988. At present prices, the stockpiles represent a source of profit in future years, he said.