M.K.U. expects loss

Press, 18 April 1978, Page 24

M.K.U. expects loss

NZPA Melbourne I Mary Kathleen Uranium, Ltd, expects to incurr a loss again this financial year the size of which will be determined by production and the relative values of the Australian and United States dollars. The chairman of the company (Mr Frank Espie) told the annual meeting in Melbourne that M.K.U.’s sales j contracts were written entirely in United States dollars, which had fallen dramatically in world money markets in the last six months. The Australian dollar had risen in value compared with the United States currency and “if the present ex- | change rates continue, this will have a significant downward effect on earnings in 1978.”

I The expected loss this! year would be on top of the sAust23M deficit incurred by M.K.U. since the mine in north-western Queensland opened two years ago. Discussions would be held ■ with the company's two main shareholders, the Australian Atomic Energy Commission and Conzinc Riotinto of Australia, Ltd, with a view to converting loans both made to the company into shares. These loans totalled S2OM last year. “The company believes that it is most important that the loan finance aggregating S2OM provided by the two major shareholders in 1977 be converted to equity, said Mr Espie. “Discussions will be held with the major shareholders and if satisfactory arrange- , ments can be reached all shareholders will be invited

to subscribe for a pro rata offering of shares.” M.K.U.’s production in the three months to March 31 had risen from 81.9 tonnes to 116.6 tonnes of uranium oxide compared with the previous corresponding period. “The measures being taken to increase production referred to in the annual report are in hand and most of the plant modifications are expected to be completed by the middle of the year.” These modifications, costing about S6M, would raise uranium-oxide production by between 15 per cent and 20 per cent. M.K.U. had decided to suspend a rare-earth pilot development because of current and future low demand and prices expected for rare earths.