Coeur d’Alene Mines Corp. lost $57 million in the second quarter, due mostly from having to write down its investment in the Golden Cross Mine in New Zealand.
The $56.9 million loss, or $2.63 cents a share, compares with earnings of $3.4 million, or 22 cents a share, for the same period in 1995.
Environmental problems with the tailings dam at Golden Cross forced the company to take the one-time loss. Coeur bought the gold mine in 1993 for $53 million, and took a write-down for that same amount last month.
The tailings dam is shifting on the mountainside where the mine lies. Coeur has spent several million dollars to dig a tunnel to relieve water pressure in the tailings dam, but the work will cost millions more to complete.
That meant the mine would never return a profit on Coeur’s investment, so the company removed the value of the mine from its books.
Coeur sued Cyprus Amax of Denver for failing to disclose problems with the tailings dam. The suit asks for Coeur’s $53 million back plus damages. Cyprus Amax counter-sued to have Coeur’s suit thrown out.
A New Zealand environmental group said it warned the company about the problems by letter before Coeur bought the mine.
For the first half of this year, Coeur lost $56.7 million. That compares with earnings of $232,000 for the first six months of 1995.
Coeur will buy the rest of its El Bronce mine in Chile. Coeur owned 51 percent of the mine and had an option to increase its ownership to 100 percent for $10.5 million, plus a 3 percent net smelter royalty starting next year.
Results at Silver Valley Resources in the Silver Valley have been encouraging. The Coeur mine began processing ore ahead of schedule, and exploration work at the Galena mine appears very promising.
The two mines will produce 1.5 million ounces of silver for Coeur, which owns half of Silver Valley Resources, during their first full year of production.
Coeur’s stock has suffered on the news of the Golden Cross writedown. Though Coeur’s common stock gained 63 cents Thursday to close at $14.88, it has traded at or near its 52-week low.
In other financial reports Thursday:
Hewlett-Packard Co. reported lower earnings as slowing orders along with losses and charges in its disk-drive business cut into profit.
Net income for the three months ended July 31 fell to $425 million, or 40 cents a share. That includes a pretax charge of $135 million, or 8 cents a share after taxes, for shutting its disk-drive business. In the year ago quarter, H-P had net income of $576 million, or 55 cents.
Sales rose 18 percent to $9.10 billion from $7.74 billion. The company warned in June that its thirdquarter results would be disappointing because of slowing orders for many of its products. It also said at that time it would shut its disk-drive business, which reported a loss of about 5 cents a share.
The Palo Alto, Calif.-based computer maker was expected to report earnings of 49 cents, according to the average estimate of 22 analysts surveyed by Zacks Investment Research Corp. Before its warning, H-P was expected to have per-share profit of $1.25.
Shares fell $3.50 to $40 in trading after the close of the New York Stock Exchange.
, DataTimes The following fields overflowed: CREDIT = Eric Torbenson Staff writer The Associated Press contributed to this report.
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