Production of zinc ore and concentrates from the Lisheen mine in Co Tipperary will start in October, according to Ivernia West managing director Mr David Hough.
The company, which has announced an operating loss of £136,719 (€173,597) for 1998, or a loss per share of 0.1p, plans to start recruitment in July.
Ivernia is reviewing its operating costs at Lisheen "to ensure that these costs are competitive and in the lowest quartile worldwide", Mr Hough said. At the current 35-36 cents per pound of zinc, costs were well within the lowest quartile of operating costs worldwide, he added.
The cost of bringing the mine into production is estimated at $280.5 million (€264.9 million), an increase of $14.1 million on the earlier estimate of $266.4 million. Invernia is meeting 50 per cent of the cost. About $140.4 million has already been spent, $87.5 million in 1998. The company has adequate funding in place to meet its share of the Lisheen costs and to fund its exploration and operating costs, Mr Hough said.
Sales agreements are in place for more than 70 per cent of the first five years' output, with prices to be set on delivery to the port of the smelting company, he said. It is expected that about 250,000 tonnes of ore will be mined and 30,000 tonnes of concentrates shipped by the end of the year. Ivernia will ship from Cork. Storage and handling facilities are under construction at Tivoli.
"Currently, the commercial fundamentals for zinc appear to be the best of all the base metals and smelter treatment charges are more favourable to concentrate producers," Mr Hough said.
The Lisheen mine has a mining reserve of 18.94 million tonnes, with a grading of 12.75 per cent zinc and 2.18 per cent lead.
Results from exploration programmes under its joint venture agreements with Minorco and Rio Algom were "encouraging" while exploration results from its wholly-owned Clogher Valley gypsum licence in Northern Ireland were "successful". Ivernia recently announced a $3 million Australian dollars investment (€1.84 million) for a 20 per cent stake in a lead prospect in Western Australia - the Magellan Lead Project.
The 1998 results show net expenditure of £27.8 million (€35.3 million), comprising mainly development and construction costs, and up from £9.1 million for nine months of 1997. The company had net interest income of £0.23 million (€0.29 million), down from £0.88 million. By year end, deferred development expenditure had risen to £0.44 million (€0.56 million) from £0.017 million.
