Fuel, metal prices halve Nanisivik profit
Doug Ashbury
Northern News Services
Nanisivik (Feb 26/01) - Higher fuel costs and lower zinc prices trimmed Nanisivik mine's annual operating earnings by half, it was reported last Wednesday.
Earnings at the Nunavut base-metal mine fell to $9.7 million at year's end on Dec. 31, 2000 from $17.4 million in 1999, mine-owner Breakwater Resources said.
In an effort to improve numbers from the mine, Breakwater is adding new infrastructure.
A dense media separation plant is under construction with a May 2001 start date.
"This plant will allow treatment of lower-grade ores, which cannot currently be processed economically," Breakwater reported in recently released annual financial results.
With the new plant, Breakwater anticipates about a seven million to nine million kilogram increase in annual zinc production. The plant may extend the life of the mine.
At Dec. 31, Nanisivik had 2.9 million tonnes of proven and probable ore reserves grading 6.9 per cent zinc, 0.4 per cent lead and 28 grams per tonne gold.
A year earlier, proven and probable reserves were pegged at 3.2 million tonnes of ore grading 7.4 per cent zinc and 0.4 per cent lead with 31 grams per tonne gold.
Despite record zinc production and record revenue, Breakwater reports a $13.5 million loss.
Driving the bottom line into the red was a revaluing of the company's Caribou mine and other mining assets to reflect new Ontario Securities Commission mineral reserves and resources valuations, a company spokesperson said.
This non-cash provision amounted to $27.1 million.
