Mt Lyell downgrades proven reserves

Press, 21 September 1977, Page 28

Mt Lyell downgrades proven reserves

NZPA Melbourne Mount Lyell Mining and Railway Company, Ltd, has downgraded proven reserves at its Tasmanian mines by 20M tonnes, the general manager (Mr D. P. Sawyer) says in the annual report. It leaves Mt Lyell with proven reserves of only 5.8 M tonnes of ore assaying 1.47 per cent copper at its Queenstown mines. The revised reserves figure is sufficient to provide for only four year’s mining based on the planned mining rate of 1.5 M tonnes of ore in the 1977-78 financial year. But, the directors and auditors warn again that closing the mines may be inevitable.

Mount Lyell recently was granted Federal and State Government assistance to keep the mines going until the Industries Assistance Commission recommended assistance for the copper industry. “If — after the Commonwealth Government’s decision — the outlook is for continuing losses with-

out clear prospects of recovery, closing may be inevitable,” the directors say. Mr Sawyer says the revision of proven ore reserves was undertaken after the company decided to defer development of the Prince Lyell shaft. This expensive shaft would have opened up the Prince Lyell ore body for development at depth, but was abandoned as part of Mt Lyell’s plan to reduce mining costs. The year’s mining loss. SAust 11.IM, as well as special write-downs and provisions have cut deeply into Mt Lyell’s reserves. Mt Lyell made a trading loss of SS.BM in the year to June 30. The balance sheet shows that at June 30 shareholders’ funds were $20.1M, or 68.5 c a share, compared with $34.9M, or 119 c a share, at the beginning of the financial year. If the company decides to close the mines it might not be able to realise the $20.1 M net assets shown in the accounts, the directors say.