DOING SOME DIGGING Bring on the Black Ink

This country's supply of black ink is in danger of being depleted if the first quarter results of Canada's largest...
This country's supply of black ink is in danger of being depleted if the first quarter results of Canada's largest mining companies are any indication. All have recorded healthy profits for the period.

Last week we mentioned the Sudbury Joint Venture of FNX MINING and DYNATEC. The $5 million it earned from the McCreedy West mine turns out to be only the tip of the iceberg.

The bigger producers are reporting even bigger numbers. Here's a short list of some of their first quarter 2004 figures (and for the same period in 2003):

● INCO, US$229 million net earnings (US$64 million)
● FALCONBRIDGE, US$184 million consolidated earnings (US$38 million)
● NORANDA, US$153 million earnings (loss of US$40 million)
● TECK COMINCO, Cdn$96 million net earnings (Cdn$5 million)
● PLACER DOME, US$60 million earnings (US$63 million)
● POTASH CORP OF SASKATCHEWAN, US$50.7 million earnings (US$3.2 million)
● CAMECO, Cdn$39 million net earnings (Cdn$37 million)
● FORDING CANADIAN COAL TRUST, Cdn$10.7 million net income (Cdn$147.3 million)
● BARRICK GOLD, US$10 million net income (US$29 million)

Better bottom line results for Canadian producers are due in large part to increasing commodity prices. Nickel is about US$5.20/lb, copper is US$1.30/lb and zinc is about US$0.47/lb. Gold has topped US$400/oz, and although the price has fallen back a bit, it appears steady at nearly that level. The uranium spot price has risen steadily over the past 15 months, and it reached US$17.50/lb U3O8 in March this year. Prices for both potash and nitrogen are rising. Rising prices in so many commodities at the same time is noteworthy, and today's picture looks good.

We in the mining industry know this is a cyclical business. Prices, activity and profitability rise and fall over time. But let's not be pessimistic today. Instead, let's enjoy the current upsurge in the industry and use it to strengthen our producers so they may survive the next downturn. Hopefully, it won't be very far down or very long.


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