Home | Business News | Browse by Publication | M | M2 Presswire

IBI second quarter report to shareholders. Page 2 of 2.

Article Excerpt
M2 PRESSWIRE-31 August 2004-IBI Corp.: IBI second quarter report to shareholders. Page 2 of 2.(C)1994-2004 M2 COMMUNICATIONS LTD

RDATE:08312004

During this first year of operations in 2003 and into the first quarter of 2004, there were a number of operational and financial issues and challenges, which were systematically handled by management and generally resolved to improve efficiency and profitability:

* The Company was unable to produce consistently on the back-ordered position because of shortages of working capital. This has been corrected in the fourth quarter of 2003 by arrangements with a significant customer to accelerate payments and also by new working capital financing to Canmin Resources of US$400,000 (Cdn$518,600) from a strategic partner, which closed in late December.

* Many expenses were of a fixed nature and will not change significantly with increases in sales. One-time costs were incurred testing the reliability and feasibility of certain shipping options to North America.

* Production costs during this period were impacted by the substantial rise in diesel fuel costs during the period of the Middle East war and onward into 2004.

* The small loader acquired in early 2002 was inadequate for all required functions and from mid-year 2003 the Company attempted to acquire additional used equipment. Following the Mid East war, reconstruction activities absorbed most of the reasonably priced heavy equipment from Africa and Europe. Several prospective purchase deals aborted through competitive bidding. Two heavy-duty Caterpillar loaders were finally acquired in the 2004 first quarter, and put into service in April 2004, thereby increasing the throughput capacity.

* Lighting was added to the building and the pit during 2003 to allow extra shifts, particularly for work in the pit and for overburden removal with the small loader.

* Initial power supply was by a generator, operated by high cost diesel fuel.

Electric power was finally brought to the site in February 2004 with the assistance of the Energy Ministry. The existing generator will serve as back-up against power outages.

* Approximately 50,000 cu meters of overburden was removed during 2003 to allow for expansion of the mine design and layout, at a cost of $60,000. A similar amount will be removed in 2004 (first quarter cost $15,000), at which time the pit will be of sufficient size to allow efficient mining for a number of years.

* Before widening the mine footprint, the Company was unable to access higher quality material, which is found at a greater depth.

* The majority of sales in 2003 and in the first quarter of 2004 were of the Company's medium grade coarse material which is generally in short supply in the world, and which commands the best prices. During production, a quantity of fine and superfine material is also produced, and it had to be stockpiled or sold at a discount to avoid congestion at the site. Management has developed and put into operation, effective in the second quarter of 2004, newly designed and...

View this article FREE - Now for a Limited Time, try Goliath Business News
Free for 3 Days!