Ekati's contribution to BHP group up 16 per cent
Doug Ashbury
Northern News Services
Yellowknife (Feb 14/01) - Ekati's contribution to the BHP Group balance sheet is up slightly, according to the most recent financial results.
BHP Group, the Australian resource company that owns 51 per cent of the Ekati diamond mine through subsidiary BHP Diamonds Inc., reports a 16 per cent jump is sales revenue from Ekati.
For the six months that ended Dec. 31, 2000, Ekati contributed $164 million to total revenues, up from $142 million for the same six months in 1999.
BHP Group released its half-year financial results last week.
Ekati represents two per cent of the BHP Group's total sales revenues. For the half year, BHP Group's sales were $8.5 billion, up from $7.5 billion during the same half-year in 1999.
The $8.5 billion in sales revenues helped drive BHP Group's six-month profits to a record level.
For the half-year, the company made $1.1 billion, up $176 million or 18 per cent, from the same six months a year earlier.
Through the end of 2000, Ekati produced 5.4 million carats of rough diamonds. Value of production to the end of last year was about $1.4 billion. The mine is averaging production of about 220,000 carats per month.
Following the recent financial results, there was speculation among some financial analysts that BHP Group will be actively looking at acquisitions.
Especially since British mining giant Rio Tinto is focusing on acquisitions.
"If one (Rio Tinto) is buying, maybe the other isn't far behind," said Todd Ferguson, investment advisor with TD Evergreen in Edmonton.
There is speculation Paul Anderson, BHP Group's chief executive, will be actively looking at acquisitions, Ferguson said.
"Dia Met is still on the block," Ferguson said.
Canadian junior Dia Met owns 29 per cent of the Ekati mine. Dia Met's board of directors put the company up for sale last year after two shareholders with a substantial stake in the company said they were looking to sell their shares.
Dia Met, the only Canadian mining company with ownership in an operating diamond mine, is trading midway between its 52-week high and low.
Monday, Dia Met shares were trading at $20.30. The 52-week range is $16.50 and $24.
Representatives of BHP Diamonds could not be reached for comment Monday.
