U.S. REPORT High costs at Copper Range cut into Metall’s earnings

Lower than anticipated production, high costs at the Copper Range mine in northern Michigan and a drop in base metal prices all combined to slash Metall Mining’s (TSE) annual income by over 90%. The Canadian subsidiary of Germany’s Metallgesellschaft reported a net income of $2.86 million (7 cents per share) for 1990 compared with $34.3 million (91 cents per share) the year before.

Poor performance at Cominco’s (TSE) Trail smelter in British Columbia reduced overall lead and zinc production, weakening the profit picture at both Cominco and Teck (TSE). Metall owns a 10% interest in each of the Vancouver-based companies.

High costs associated with ongoing restructuring at Copper Range also cut profits. In 1990, Metall replaced aging equipment at the Northeast mine and created additional working areas. This year, the company will focus on modernizing equipment and consolidating activities at the Southwest mine.

But after a full year of revenue from Copper Range, compared with only nine months in 1989, Metall’s total sales reached $166.9 million compared with $111.6 million in 1989.

And efforts to upgrade the facility paid off with higher production rates. In 1990, Copper Range produced 94.4 million lb. copper equivalent cathode and 1.1 million oz. of silver.

Overseas, Metall has decided to put both the Cayeli copper-zinc property in Turkey and the Bougrine lead-zinc property in Tunisia into production. Once completed, the projects will have a combined output averaging 110,000 tons of copper concentrate, 154,000 tons zinc concentrate and 15,400 tons lead concentrate. Metall Mining(TSE) 3 months ended Dec. 31 1990 1989 Revenue $38,978 $ 35,849 Net earnings (loss) (6,420) 6,480

per share (0.17) 0.17 12 months ended Dec. 31 Revenue $166,913 $ 111,594 Net earnings 2,864 34,304

per share 0.07 0.91