First quarter results show KGHM’s challenges

LETTER — KGHM International’s 2014 first quarter results were released this week. Revenue for KGHM International, which owns 80 per cent of Ajax, plummeted by 46 per cent from $272 million to $148 million due to lower copper prices and mine closures in the U.S. and Ontario. Net income decreased from a profit of $15 million to a loss of $21 million for the same period last year.

The parent company’s results are also under severe pressure while not meeting analysts’ expectations and the demand by Polish treasury to remit dividends into the country’s treasury.

Their flagship project in Chile is set to commence production later this year and has been under pressure from lower copper prices, port access and legal action from environmental groups. Also more cost overruns for the project were announced by the company.

Their number second project, the Victoria Mine near Sudbury, is progressing through the permitting stage and is expected to ramp up in 2019.

Again, the entire report makes no reference to Ajax mine and based on the company’s performance has funding challenges along with the many challenges it faces locally.

Click to access KGHM%20Q1%202014%20MDA.pdf

JOHN SCHLEIERMACHER

Kamloops