Nth BH’s big mining loss

Press, 3 February 1986, Page 30

Nth BH’s big mining loss

NZPA-AAP Melbourne North Broken Hill Holdings, Ltd, has attributed a sAust2oM mining loss for the latest half-year to low world metal prices. Directors have little hope that better prices will boost earnings in the final term. Announcing the company’s results today, North BH’s executive director, Mr Peter Barnett, said it was difficult to see a great deal of light at the end of the tunnel for metal prices. North BH boosted its equity-accounted profit 62 per cent to 510.64 M in the half-year to December 11, but the result was marred by the $20.13M mining loss, which was more clearly reflected in North’s 49 per cent slump in conventionally-ac-counted profit to $4.04M.

The mining loss was $14.8M in the second half of 1984.

The company slipped briefly into the red in the latest period with a consolidated operating loss of $279,000 and was only able to return to the black through taxation credits totalling $4.37M. Market analysts said the results showed North BH was performing reasonably well despite the heavy losses inflicted by low metal prices. North BH’s earnings per share dropped to 0.09 cents from 2c a year earlier, but the company was able to retain its interim dividend at 2c. . Turnover rose 5 per cent to $401.24M, and investment income increased by $7.35M to 512.14 M.

Mr Barnett said metal prices had not been particularly kind to the group during the half year with a drop of just over 20 per cent in zinc prices. The European producer price for zinc last July was SUSBOO a tonne but it

suffered a series of falls to finish the period at SUS7OO a tonne.

The fall in the zinc producer price had required an end-of-period write-down of SI4M.

Lead and silver prices continued to languish, with little change other than a small decline.

But in North BH’s favour, zinc markets were tight worldwide and the two largest Canadian producers were short in saleable metal product. Mr Barnett said he was certain this was a favourable factor for the second half, but it was difficult to see metal prices improving significantly in the next few months.

Highlights in the company’s performance included encouraging exploration results from the Bottle Creek mine in Western Australia and the Elura mine in New South Wales.

At Bottle Creek, 200 km south-west of Kalgoorlle, lower grade gold discoveries had been made in exploration areas away from existing orebody diggings.

North BH has 100 per cent control of the 20km Amber Fluid zone of interest, with coverage of regional areas under joint ventures. Initial testing from the Emu and VB Prospects had outlined a resource of 1.6 million tonnes grading at between three and four grams of gold a tonne and 20 grams of silver a tonne.

While the project was "no real bonanza," it was similar in size, grade and style to a number of other Western Australian gold projects in production or due to move in to production soon. At the Elura mine drilling of the No. 5 and No. 7 mines had revealed a new zinc-lead-silver lode about two to three metres in depth. Mr Barnett said mining and smelting costs had been held below the inflation rate and further productivity gains had been made on the. previous corresponding period. Profit contribution from the forestry and paper operations was 516.74 M before tax, an increase of 28.5 per cent on the previous corresponding period.