By BOSORINA ROBBY
BOUGAINVILLE Copper Ltd, operator of Panguna mine, revealed at its 44th annual general meeting a net profit of K2.8 million at the close of last year – a drop of K5.9 million from 2009’s K8.7 million, The National reports.
Chairman Peter Taylor reported to shareholders yesterday that the drop was due to operating expenses related to the budget saved for foreign exchange losses.
He explained that because of the small profit and the need to preserve cash for future developments, no dividends would be paid to shareholders.
BCL has remained debt-free, with sufficient funds available to meet expenses in the immediate future, while engagment with the landowners and the government has been frequent and positive.
Taylor said the profit, instead of an expected loss, was due to better than expected income from interest and dividends, and the realised capital gains on disposal of investments.
“However, the tax dispute legal fees continued to be a drain on revenue,” he said.
BCL’s liquid assets continued to be in cash and Australian equities, which, as a result of the good performance from the Australian equity market, had improved returns on investments.
Taylor said it was intended that this current investment strategy continued until such time when equities needed to be sold to fund mine planning and development.
He explained that this year’s income was expected to improve in terms of percentage returns but the size of the investment portfolio had been reduced as a result of the continued tax dispute in court.
Taylor pointed out that the election of John Momis as Bougainville president for the next five years was seen as an important development for BCL.
He said in this period, Panguna mine should be reopened to take advantage of the resurgence in mineral commodity prices and demand, with considerable support from Momis, the cabinet and the landowners.
He said although there was much to do, the common agreement that operations at the mine could continue would deliver significant benefits locally and regionally.
“There is increasing acknowledgment among stakeholders that Bougainville’s economic future needed mining if it were to be able to fund basic services from its own resources,” he said.
Taylor said among other issues, BCL’s non-profit arm Bougainville Copper Foundation had continued giving out scholarships to students for training in safety, risk management, corporate governance and litigation.