CANADIAN MINING PERSPECTIVES: Miners applaud profitable year

The season of annual meetings and reports will soon be upon us. Already the fourth quarter reports are streaming in...
The season of annual meetings and reports will soon be upon us. Already the fourth quarter reports are streaming in, and most mining companies again report comfortable revenues for 2007. Much of the good news we are hearing arises from five years of rising commodity prices. The trend for gold, silver, copper, nickel, lead and uranium continued upwards during 2007. Only zinc prices succumbed to downward pressure.

Strong prices are being translated into strong profits for most mineral producers. Not everyone's revenue went up, but most are well in the black.

AGNICO-EAGLE MINES, the Toronto-based gold miner, boosted its annual dividend by 50%. Gross revenues from mining operations were US$432.2 million last year, down 7% from the US$464.6 million recorded in 2006.

BARRICK GOLD, also of Toronto, produced 8.6 million oz of gold in 2007, which sold for US$6.3 billion, a 12% improvement over 2006.

Coal sales provided revenue for Calgary's FORDING CANADIAN COAL TRUST. The 2007 number was Cdn$1.4 billion, unfortunately a drop of about 20% from the previous year.

Toronto's GOLDCORP had revenues of US$2.2 billion, up over 30% from 2006.

Gross sales at base metal producer INMET MINING of Toronto were Cdn$1.2 billion for 2007, up just a bit (1%) from the previous year.

LUNDIN MINING of Vancouver reported unaudited sales of US$1.1 billion, compared with the restated 2006 amount of only US$539.7 million. That is a jump of about 95%.

Revenues at NORTHGATE MINERALS, also Vancouver-based, were US$335.7 million for 2007, down from US$411.3 million in 2006. The drop reflects gold production of only 245,600 oz last year, compared with 310,300 oz in 2006.

This from another coal miner: ROYAL UTILITIES INCOME FUND of Toronto reported 2007 revenues of Cdn$505.0 million, up 6% from Cdn$477.4 a year earlier.

Vancouver's TECK COMINCO has total revenues from all operations of Cdn$6.4 billion, down from Cdn$6.5 billion in 2006.

Other companies with notable Canadian interests did very well, too, perhaps due to their global reach.

Brazilian miner COMPANHIA VALE DO RIO DOCE (VALE) reported record gross revenues of US$33.1 billion, up nearly 30% from 2006.

Diamond producer DE BEERS, which is soon to open a second mine in Canada, had worldwide sales of US$6.8 billion last year.

RIO TINTO recorded gross sales on all commodities of US$33.5 billion in 2007, up significantly from US$25.4 billion a year earlier.

Numbers from XSTRATA were also up, reaching US$28.5 billion in 2007, up 12% from a year earlier.

It looks to me as if there will be a lot of smiling shareholders as well as blushing flowers greeting springtime this year.


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