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Exhibit 99.3
 | | 181 Bay Street, Suite 200
Toronto, Ontario M5J 2T3
Canada
www.noranda.com | | Contacts:
Denis Couture, Vice-President, Investor Relations,
Public Affairs & Communications
(416) 982-7020
Steve Douglas, Executive Vice-President
and Chief Financial Officer
(416) 982-3554 |
News release
TORONTO, July 29, 2004
NORANDA REPORTS QUARTERLY EARNINGS OF US$107 MILLION
Lowers Debt to Capitalization Ratio to 39%
Investors, analysts and other interested parties can access Noranda's Supplemental Information Package and its quarterly teleconference on its website atwww.noranda.com under the For Investors and Presentations and Webcasts sections. The teleconference will be held on Thursday, July 29, 2004 at 8:30 a.m. Eastern Standard Time. To participate by conference call, dial(416) 641-6715 for local and overseas and 1-800-428-5596 toll free in North America. All dollar amounts are in U.S. dollars unless otherwise noted.
Second Quarter Highlights
- •
- Earnings increased to $107 million from a loss of $10 million in the second quarter of 2003.
- •
- Generated $280 million of income from operating assets, $218 million higher than the prior year.
- •
- Reduced net debt to total capitalization ratio to 39% from 43% at year-end 2003.
- •
- Achieved increased profitability in all business units.
- •
- Completed the removal of residual lake sediment at the Antamina copper/zinc mine enabling access to higher-grade ores.
- •
- Continued ramp-up of aluminum foil production according to plan.
- •
- Started commissioning of production expansion project at the Collahuasi copper mine five weeks ahead of schedule and under budget.
- •
- Renewed labour contract agreements at the Collahuasi mine and CCR refinery.
- •
- Further integrated Noranda's Aluminum business by acquiring strategic alumina refining operations and related bauxite mining assets.
- •
- Formed special committee of Board of Directors to review methods to maximize shareholder value.
| | Second Quarter
| | Six Months
| |
|
|---|
$ millions, except per share information
| | Y-O-Y
Change
|
|---|
| | 2004
| | 2003
| | 2004
| | 2003
|
|---|
| Revenues | | | 1,694 | | | 1,112 | | | 3,347 | | | 2,168 | | + $ | 1,179 |
| Income generated by operating assets* | | | 280 | | | 62 | | | 638 | | | 121 | | + $ | 517 |
| Net income (loss) | | | 107 | | | (10 | ) | | 260 | | | (50 | ) | + $ | 310 |
| Basic earnings (loss) per common share | | $ | 0.34 | | $ | (0.08 | ) | $ | 0.84 | | $ | (0.26 | ) | + $ | 1.10 |
| Diluted earnings (loss) per common share | | $ | 0.34 | | $ | (0.08 | ) | $ | 0.83 | | $ | (0.26 | ) | +$ | 1.09 |
*Defined as earnings before interest, corporate and general administration, research, development, exploration, minority interest, taxes, restructuring costs and other income
1
Commentary
"Noranda delivered another strong operating quarter. We recorded higher profitability in all of our businesses as the measures undertaken by our employees to maximize profit and control costs combined to capitalize on the healthier market conditions for base metals,"said Mr. Derek Pannell, Noranda's President and CEO. "With the completion of the Collahuasi expansion, our team also continued its track record of delivering capital projects on time and within budget."
CORPORATE DEVELOPMENTS
In mid June, Noranda's Board of Directors commenced a review of various opportunities for maximizing shareholder value after receiving several expressions of interest in the company from potential acquirors. The Company retained the services of CIBC World Markets as financial adviser and a special committee of Directors was established to oversee the review. The process is currently underway and no specific timetable has been set for its conclusion.
On July 20, Noranda and its 50% partner, Century Aluminum, reached an agreement to purchase the Gramercy alumina refinery in Louisiana and a 49% interest in the St. Ann bauxite mine in Jamaica for $23 million, subject to certain closing adjustments. The transaction secures long-term supplies of raw materials for the Noranda primary smelter and provides the Company with the benefits of a fully-integrated aluminum business, from bauxite all the way through to value-added foil products. It also complements the continuing ramp-up of the recently-modernized aluminum foil business that is achieving production records quarter after quarter.
FINANCIAL RESULTS
Net income was $107 million or $0.34 per common and diluted share for the quarter. This compares with a net loss of $10 million or $0.08 per common share in the second quarter of 2003. For the first half of 2004, net income amounted to $260 million or $0.83 per fully diluted common share. This compares with a net loss for the first half of 2003 of $50 million.
For both the second quarter and first half of 2004, higher metal prices and increased sales volumes in the copper and nickel businesses were the main contributors to improved results. These were offset slightly by the effect of a stronger Canadian dollar on costs.
| | Realized Six Months
| |
|
|---|
Metal prices
| | Y-O-Y Change
|
|---|
| | 2004
| | 2003
|
|---|
| (US$ per pound) | | | | | | |
| Copper | | 1.21 | | 0.76 | | + 59% |
| Nickel | | 6.32 | | 3.85 | | + 64% |
| Zinc | | 0.52 | | 0.40 | | + 30% |
| Aluminum | | 0.81 | | 0.67 | | + 21% |
| Lead | | 0.41 | | 0.24 | | + 71% |
Revenues were approximately 50% higher compared to the second quarter and first half of 2003. The increase was attributable to higher metal prices and increased copper, primary aluminum and aluminum foil sales volumes, as new capacity in these areas ramp-up to full production.
2
The higher cost of operations in 2004 was attributable to the higher level of operations at the Canadian copper facilities and the ramp-up of new production capacity in the Copper and Aluminum businesses. Higher energy costs as well as the stronger Canadian dollar also contributed to the increased costs.
The cost to purchase raw materials was higher for both periods in 2004 compared to 2003 as a result of increased feed requirements at the expanded Altonorte smelter, full operations at the Canadian metallurgical facilities and higher metal prices which increased the cost to purchase third-party material.
REVIEW OF OPERATIONS
Copper
The Copper business generated income from operating assets of $132 million in the second quarter, exceeding last year's comparable result of $39 million. Revenues for the quarter did not fully reflect the business's recently-expanded production capacity due to a build-up in inventories which are expected to be reduced in the third quarter. The average LME price for copper, excluding premiums, was $1.26 per pound for the quarter, almost 70% higher than the second quarter of 2003. The Company's integrated cost to produce a pound of copper in its Copper business was $0.33 per pound in the first half of 2004.
- •
- Mined production of 106,615 tonnes exceeded last year's level by 17%. All four mines recorded higher year-over-year output as mining activities at the Antamina mine extracted higher grade material, performance of the new Collahuasi concentrator exceeded expectations and the crusher expansion at Lomas Bayas achieved design capacity at the beginning of June.
- •
- At the Altonorte smelter, copper anode production of 67,242 tonnes was relatively unchanged year over year but sulphuric acid production increased almost 15%. Prices for sulphuric acid in South America strengthened further over the first quarter of 2004 with some reported spot market sales conducted at the $70 per tonne level.
- •
- Copper cathode production from the Canadian metallurgical facilities of 87,819 tonnes was negatively affected by the advanced annual shutdown of the Kidd Creek smelter to address a furnace cooling block failure. The smelter was back on line at the end of June and will recover most of the lost production in the third quarter of 2004.
- •
- In the second half of 2004, mine copper production is expected to exceed that of the first half and total 440,000 tonnes for the year, a 20% increase over 2003.
Nickel
The Nickel business generated income from operating assets of $136 million for the quarter, an increase of more than 160% over the comparable period of 2003, while the average LME nickel price of $5.70 per pound was 50% higher, although it is lower than the first quarter, and current pricing. The cash operating cost to produce a pound of nickel at the INO and Falcondo facilities was $2.49 and $3.42, respectively.
- •
- Mined nickel production totaled 11,957 tonnes during the quarter compared to 13,754 in the second quarter of 2004. Lower tonnage, ore grades and the effects of the strike in the first quarter of 2004 contributed to the shortfall in output. The production ramp-up after the strike was completed as scheduled.
- •
- At the Sudbury smelter, nickel in matte production in the second quarter of 2004 was 14,532 tonnes compared to 15,833 tonnes in the same period of 2003. The smelter began an eight-week maintenance shutdown on June 14, 2004.
3
- •
- The Nikkelverk refinery produced 16,099 tonnes of refined nickel compared to 20,140 tonnes in the second quarter of 2003. The shortfall in production was attributable to lower shipments from the Sudbury smelter.
- •
- The 2004 forecasts are for 44,500 tonnes of mined nickel production from INO, 28,000 tonnes of ferronickel from Falcondo and 72,000 tonnes of refined nickel production from Nikkelverk.
Zinc
The Zinc business generated income from operating assets of $10 million in the quarter compared to a loss of $28 million in 2003. Cash generated in these operations was $25 million for the three months and $45 million for the six-month period. The improved results were attributed to higher zinc and by-product prices as well as lower operating costs at the Bell-Allard mine. The LME zinc price averaged $0.47 per pound in the quarter and $0.48 for the first half of 2004. These compare with $0.35 for both the second quarter and first half of 2003. Noranda's cash cost to produce a pound of zinc was $0.33 per pound in the second quarter and $0.33 in the first half of 2004.
- •
- Mined production totaled 94,051 tonnes of zinc metal. At the Brunswick operation, the mining plan focused on processing higher-grade lead ore to take advantage of the favourable market conditions.
- •
- The Brunswick Smelter produced 28,240 tonnes of lead metal surpassing last year's comparable production by over 20%. The seasonal shutdown of the operation commenced at the end of the quarter and operations are scheduled to restart in early September.
- •
- The estimated mine production for the full year of 2004 is unchanged at 370,000 tonnes of zinc metal.
Aluminum
The Aluminum business generated income from operating assets of $24 million in the quarter up from $7 million reported in the second quarter of 2003. Contributing to the better results were improved production performance, increased sales volumes across all product lines, mid-west premiums which are at a 7-year high and higher margins on value-added products. Partially offsetting these positives were higher year-over-year energy costs. The average LME aluminum price improved 22% year-over-year to average $0.76 for the quarter. Noranda's cash cost per pound of aluminum was $0.57 per pound in the quarter and $0.58 for the first half of 2004.
- •
- The primary smelter increased shipments to 65,680 tonnes from 63,528 tonnes in the second quarter of 2003. Value-added product sales continues to grow and accounted for 85% of total shipments in the quarter and 81% for the first half of 2004 compared to 69% for the first half of 2003.
- •
- Shipments of foil products were up 25% over last year's second quarter to total 45,796 tonnes reflecting strong demand across all product lines. The market improvement coincides with the continuing ramp-up at the Huntingdon West plant.
- •
- For the full year of 2004, shipments of primary aluminum and foil products are expected to total 250,000 tonnes and 175,000 tonnes, respectively.
4
New Production Capacity Under Development
AtCollahuasi, completion of the concentrator expansion was accomplished five weeks ahead of the July 1 schedule date. The ramp-up has exceeded expectations and design capacity throughput of 110,000 tonnes per day was reached in June. The Ujina-Rosario expansion project is on budget and essentially complete with only some of the infrastructure at the port facilities still pending. A conceptual study of the second expansion of the copper concentrator and the feasibility study of the molybdenum plant is continuing on schedule.
Work atKidd Creek Mine D is advancing as planned with first ore production expected in the second half of 2004 with continuous ramp-up during 2005 and 2006. Mine D will improve operational reliability and predictability and maintain the future mining rate at 2.4 million tonnes per year. The first ore from Mine D was hoisted in the new shaft on July 25.
At theMontcalm nickel project in northern Ontario, engineering was completed at the end of June and mine development activities are well underway. The project remains on time and on budget, and will add 8,000 tonnes of nickel production per year beginning in 2005.
Surface preparation and early shaft development are underway at theNickel Rim South project. The five-year, $368-million development program is expected to deliver initial production in 2008 with a further $185 million required to bring the mine to full production. After taking into account pre-production revenues of $141 million, the overall net capital cost will be $413 million. Including by-product credits, the mine is expected to have operating cash costs of negative $0.60 to $0.70 per pound of nickel.
At theKabanga nickel project in Tanzania, joint-venture documentation on the previously announced transaction moved towards completion slated for the third quarter.
Capital Initiatives
Cash generated from operations, before the net change in accounts receivables, payables and inventories, was $295 million during the quarter and $645 million for the first six months of 2004. Cash, cash equivalents and short-term investments was relatively unchanged from year-end 2003 at $628 million as cash generated from the operations was utilized to repay $300 million of senior debentures in June 2004 and fund investments. Total debt was $3.1 billion at the end of the period. The net debt to capitalization ratio was reduced to 39% from 43% at year-end 2003. The Company currently has $0.8 billion of undrawn committed bank lines.
Investments in new production capacity such as the Montcalm, Nickel Rim South and Koniambo nickel projects and the Collahuasi and Kidd Mine D copper projects totaled $112 million during the quarter and $190 million for the first six months. The Collahuasi project was completed and started commissioning during the quarter and the first phase of the Kidd Mine D is expected to be complete before the end of the year. For 2004, the Company's projected capital investment is $675 million, including $405 million in new production capacity.
Market Review
Copper: LME copper prices averaged $1.26 per pound in the quarter as cumulative LME and COMEX stocks declined a further 186,618 tonnes to their lowest level in a decade, representing approximately 53 days of inventory. Prices receded in June from the March average peak of $1.41 per pound to average $1.22 as a result of reduced purchasing activity in Asia and position liquidation in some funds.
5
Nickel: LME nickel prices averaged $5.70 per pound in the second quarter as some weakness was experienced during April and May but rebounded strongly in June to average $6.14.
Tight markets are anticipated for 2004 and 2005 as the synchronized global economic recovery bodes well for continued nickel demand. Some pressure has been taken off the market from greater scrap availability, some substitution and Chinese nickel destocking. On the positive side, stainless steel demand continues to be very strong and the high nickel alloy market is strengthening.
Zinc: In the second quarter, zinc prices retracted from the highs posted in early March to average $0.47 per pound and closed the quarter at just under $0.44 per pound. LME stocks increased during the period by 14,825 tonnes to 731,125 tonnes as previously unreported stocks held in private financing arrangements were delivered into LME warehouses.
The economic recovery currently underway in Asia and North America is resulting in strong zinc demand levels from the automotive and construction sectors. Chinese exports of zinc metal to the end of May were lower by over 55% compared to the same period in the previous year due to reduced supply of imported zinc concentrates for custom smelting and strong domestic demand. Global zinc concentrate supply is expected to be unchanged in 2004, while smelter demand is increasing in response to the restart of some zinc smelting operations and continued capacity expansions in China. Most industry experts have identified the lack of significant new mine supply as the key feature to support an improved market outlook for zinc.
Aluminum: The current LME cash price of $0.80 per pound is up 10% and reported inventories are down nearly 400,000 tonnes since the beginning of the year. The U.S. Midwest delivery premium has remained over $0.07 per pound for the past four months.
The U.S. economy continues to demonstrate strength and improving consumer sentiment. Order levels for extrusion billet are very robust with spot billet premium up $0.03 to $0.04 per pound. Demand for flat rolled products continues to be very strong. In China, high spot alumina costs and rising power costs have combined to constrain Chinese metal production.
Dividends
The following dividends have been declared:
Security
| | Dividend Amount
| | Record Date
| | Payable Date
|
|---|
| Common shares | | Cdn$0.12 per share | | August 31, 2004 | | September 15, 2004 |
| Preferred Series F shares | | Floating rate | | August 31, 2004 | | September 13, 2004 |
| Preferred Series F shares | | Floating rate | | September 30, 2004 | | October 12, 2004 |
| Preferred Series F shares | | Floating rate | | October 29, 2004 | | November 12, 2004 |
| Preferred Series G shares | | Cdn$0.38125 per share | | October 15, 2004 | | November 1, 2004 |
| Preferred Series H shares | | Cdn$0.40625 per share | | August 16, 2004 | | September 30, 2004 |
This news release contains forward-looking statements concerning the Company's business and operations. The Company cautions that, by their nature, forward-looking statements involve risk and uncertainty and the Company's actual results could differ materially from those expressed or implied in such statements. Reference should be made to the most recent Annual Information Form for a description of the major risk factors.
6
Noranda is a leading copper and nickel company with investments in fully-integrated zinc and aluminum assets. The Company's primary focus is the identification and development of world-class copper and nickel mining deposits. It employs 15,000 people at its operations and offices in 18 countries and is listed on The New York Stock Exchange and The Toronto Stock Exchange (NRD).
Note: This press release is also available atwww.noranda.com. All dollar amounts are in U.S. dollars unless otherwise noted.
- 30 -
ATTACHMENTS
7
NORANDA INC.
CONSOLIDATED RESULTS
(US$ millions)
| | Second Quarter
| | Six Months ended June 30
| |
|---|
| | 2004
| | 2003
| | 2004
| | 2003
| |
|---|
| Revenues | | $ | 1,694 | | $ | 1,112 | | $ | 3,347 | | $ | 2,168 | |
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
| | Cost of operations | | | 539 | | | 502 | | | 1,006 | | | 971 | |
| | Purchased raw materials | | | 749 | | | 421 | | | 1,460 | | | 835 | |
| | Depreciation, amortization and accretion | | | 126 | | | 127 | | | 243 | | | 241 | |
| | |
| |
| |
| |
| |
| | | | 1,414 | | | 1,050 | | | 2,709 | | | 2,047 | |
| | |
| |
| |
| |
| |
| Income generated by operating assets | | | 280 | | | 62 | | | 638 | | | 121 | |
| Interest expense, net | | | 36 | | | 36 | | | 61 | | | 74 | |
| Corporate and general administration | | | 15 | | | 14 | | | 28 | | | 27 | |
| Research, development and exploration | | | 12 | | | 12 | | | 19 | | | 20 | |
| Minority interest in earnings of subsidiaries | | | 64 | | | 18 | | | 143 | | | 34 | |
| | |
| |
| |
| |
| |
| Income (loss) before undernoted | | | 153 | | | (18 | ) | | 387 | | | (34 | ) |
| Tax expense (recovery) | | | 58 | | | (23 | ) | | 144 | | | (29 | ) |
| Restructuring costs | | | — | | | 11 | | | — | | | 41 | |
| Other expenses (income) | | | (12 | ) | | 4 | | | (17 | ) | | 4 | |
| | |
| |
| |
| |
| |
| Net income (loss) | | $ | 107 | | $ | (10 | ) | $ | 260 | | $ | (50 | ) |
| Dividends on preferred shares | | | 5 | | | 9 | | | 10 | | | 12 | |
| Interest on convertible debentures | | | 1 | | | 1 | | | 2 | | | 2 | |
| | |
| |
| |
| |
| |
| Net income (loss) attributable to common shares | | $ | 101 | | $ | (20 | ) | $ | 248 | | $ | (64 | ) |
| | |
| |
| |
| |
| |
| Basic earnings (loss) per common share — $ | | $ | 0.34 | | $ | (0.08 | ) | $ | 0.84 | | $ | (0.26 | ) |
| | |
| |
| |
| |
| |
| Diluted earnings (loss) per common share — $ | | $ | 0.34 | | $ | (0.08 | ) | $ | 0.83 | | $ | (0.26 | ) |
| | |
| |
| |
| |
| |
| Basic weighted average shares outstanding — 000s | | | 296,249 | | | 243,080 | | | 295,922 | | | 242,302 | |
| Diluted weighted average shares outstanding — 000s | | | 303,965 | | | 243,412 | | | 303,543 | | | 242,634 | |
Note:- Effective July 1, 2003, Noranda adopted the US dollar as its reporting and functional currency. This change has been reflected on a retroactive basis.
NORANDA INC.
CONSOLIDATED BALANCE SHEETS
(US$ millions)
| | Actual
|
|---|
| | Jun. 30 2004
| | Dec. 31 2003
|
|---|
| Assets | | | | | | |
| Current assets | | | | | | |
| | Cash and cash equivalents | | $ | 628 | | $ | 501 |
| | Short-term investments | | | — | | | 129 |
| | Accounts receivable | | | 741 | | | 576 |
| | Metals and other inventories | | | 1,254 | | | 1,179 |
| | |
| |
|
| | | | 2,623 | | | 2,385 |
| Operating capital assets | | | 4,873 | | | 4,765 |
| Development projects | | | 891 | | | 973 |
| Investments and other assets | | | 298 | | | 205 |
| | |
| |
|
| | | $ | 8,685 | | $ | 8,328 |
| | |
| |
|
Liabilities and Equity |
|
|
|
|
|
|
| Current liabilities | | | | | | |
| | Accounts and taxes payable | | $ | 1,010 | | $ | 903 |
| | Debt due within one year | | | 174 | | | 431 |
| | |
| |
|
| | | | 1,184 | | | 1,334 |
| Long-term debt | | | 2,940 | | | 2,893 |
| Future income taxes | | | 101 | | | 46 |
| Reclamation, pension and other provisions | | | 602 | | | 539 |
| Stockholders' interest: | | | | | | |
| | Interests of other shareholders | | | 1,056 | | | 919 |
| | Shareholders' equity | | | 2,802 | | | 2,597 |
| | |
| |
|
| | | $ | 8,685 | | $ | 8,328 |
| | |
| |
|
NORANDA INC.
CONSOLIDATED STATEMENTS OF CASHFLOWS
(US$ millions)
| | Second Quarter
| | Six Months ended June 30
| |
|---|
| | 2004
| | 2003
| | 2004
| | 2003
| |
|---|
| Cash realized from (used for): | | | | | | | | | | | | | |
Operations |
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|
|
|
|
|
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|
|
|
|
| | Net income (loss) | | $ | 107 | | $ | (10 | ) | $ | 260 | | $ | (50 | ) |
| | Charges (credits) not affecting cash: | | | | | | | | | | | | | |
| | | Depreciation, amortization and accretion | | | 121 | | | 118 | | | 227 | | | 223 | |
| | | Minority interests in earnings of subsidiaries | | | 64 | | | 19 | | | 143 | | | 35 | |
| | | Foreign exchange, restructuring and other | | | 3 | | | 57 | | | 15 | | | 85 | |
| | |
| |
| |
| |
| |
| | | | 295 | | | 184 | | | 645 | | | 293 | |
| Net change in accounts receivable, inventories and payables | | | (40 | ) | | (47 | ) | | (128 | ) | | (150 | ) |
| | |
| |
| |
| |
| |
| Cash from operations | | | 255 | | | 137 | | | 517 | | | 143 | |
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| |
| |
| |
| |
Investment activities |
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|
|
|
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|
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|
|
| | Capital investments | | | (146 | ) | | (112 | ) | | (270 | ) | | (213 | ) |
| | Investments and advances | | | 118 | | | — | | | 128 | | | — | |
| | Proceeds on dispositions | | | 1 | | | 10 | | | 3 | | | 11 | |
| | |
| |
| |
| |
| |
| Cash used in investment activities | | | (27 | ) | | (102 | ) | | (139 | ) | | (202 | ) |
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| |
Financing activities |
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| | Long-term debt, including current portion | | | | | | | | | | | | | |
| | | Issued | | | 113 | | | 388 | | | 141 | | | 447 | |
| | | Repaid | | | (300 | ) | | (344 | ) | | (344 | ) | | (398 | ) |
| | Issue of shares — common | | | 5 | | | — | | | 18 | | | — | |
| | Issue of preferred shares | | | — | | | 100 | | | — | | | 198 | |
| | Dividends paid | | | (40 | ) | | (38 | ) | | (80 | ) | | (67 | ) |
| | Issue (repurchase) of shares — minority shareholders | | | 3 | | | (5 | ) | | 14 | | | (5 | ) |
| | |
| |
| |
| |
| |
| | | | (219 | ) | | 101 | | | (251 | ) | | 175 | |
| | |
| |
| |
| |
| |
| Increase in cash and cash equivalents | | | 9 | | | 136 | | | 127 | | | 116 | |
| Cash and cash equivalents, beginning of period | | | 619 | | | 273 | | | 501 | | | 293 | |
| | |
| |
| |
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| |
| Cash and cash equivalents, end of period | | $ | 628 | | $ | 409 | | $ | 628 | | $ | 409 | |
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NORANDA INC.
PRODUCTION VOLUMES
| |
| |
| |
| | Six Months ended June 30
|
|---|
| |
| | Second Quarter
|
|---|
Mine Production (tonnes, except as noted)
|
|---|
| | 2004
| | 2003
| | 2004
| | 2003
|
|---|
| | 100% basis,
except as noted
| |
| |
| |
| |
|
|---|
| Copper | | | | | | | | | | |
| | Copper business | | | | | | | | | | |
| | | Kidd Creek | | | | 14,292 | | 10,655 | | 23,588 | | 21,373 |
| | | Antamina | | (33.75%) | | 30,976 | | 21,942 | | 56,533 | | 46,399 |
| | | Collahuasi | | (44%) | | 46,433 | | 43,515 | | 81,802 | | 87,726 |
| | | Lomas Bayas | | | | 14,914 | | 14,809 | | 30,642 | | 29,381 |
| | | | |
| |
| |
| |
|
| | | | | 106,615 | | 90,921 | | 192,565 | | 184,879 |
| | Matagami | | | | 2,024 | | 1,928 | | 3,880 | | 3,931 |
| | Brunswick | | | | 1,357 | | 2,193 | | 3,199 | | 4,579 |
| | INO | | | | 9,081 | | 10,885 | | 14,617 | | 19,946 |
| | Other | | | | 2,943 | | 3,245 | | 7,373 | | 9,734 |
| | | | |
| |
| |
| |
|
| | | | | 122,020 | | 109,172 | | 221,634 | | 223,069 |
| | | | |
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| |
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Zinc |
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| | Zinc business | | | | | | | | | | |
| | | Brunswick | | | | 62,280 | | 73,942 | | 135,860 | | 144,740 |
| | | Matagami | | | | 31,771 | | 25,113 | | 58,445 | | 50,397 |
| | | | |
| |
| |
| |
|
| | | | | 94,051 | | 99,055 | | 194,305 | | 195,137 |
| | Kidd Creek | | | | 10,700 | | 16,479 | | 31,492 | | 37,651 |
| | Antamina | | (33.75%) | | 18,309 | | 33,592 | | 40,778 | | 57,760 |
| | Other | | | | 2,847 | | 2,120 | | 4,391 | | 4,092 |
| | | | |
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| |
|
| | | | | 125,907 | | 151,246 | | 270,966 | | 294,640 |
| | | | |
| |
| |
| |
|
| Nickel | | | | 11,957 | | 13,754 | | 23,029 | | 26,715 |
| Ferronickel | | | | 6,871 | | 6,557 | | 14,870 | | 13,444 |
| Lead | | | | 17,138 | | 19,911 | | 37,425 | | 38,336 |
Silver — 000 ounces |
|
|
|
|
|
|
|
|
|
|
| | Copper business | | | | | | | | | | |
| | | Kidd Creek | | | | 757 | | 548 | | 1,951 | | 1,287 |
| | | Antamina | | (33.75%) | | 736 | | 575 | | 1,389 | | 1,260 |
| | | | |
| |
| |
| |
|
| | | | | 1,493 | | 1,123 | | 3,340 | | 2,547 |
| | Brunswick | | | | 1,363 | | 1,543 | | 2,965 | | 3,025 |
| | Matagami | | | | 119 | | 89 | | 233 | | 186 |
| | Other | | | | 73 | | 61 | | 123 | | 130 |
| | | | |
| |
| |
| |
|
| | | | | 3,048 | | 2,816 | | 6,661 | | 5,888 |
| | | | |
| |
| |
| |
|
Metal Production (tonnes, except as noted) |
|
|
|
|
|
|
|
|
|
|
Refined copper |
|
|
|
|
|
|
|
|
|
|
| | Copper business | | | | | | | | | | |
| | | CCR | | | | 68,288 | | 46,444 | | 146,448 | | 89,470 |
| | | Kidd Creek | | | | 19,531 | | 38,024 | | 53,253 | | 74,983 |
| | | Collahuasi | | (44%) | | 5,669 | | 6,583 | | 11,821 | | 13,445 |
| | | Lomas Bayas | | | | 14,914 | | 14,809 | | 30,642 | | 29,381 |
| | | | |
| |
| |
| |
|
| | | | | 108,402 | | 105,860 | | 242,164 | | 207,279 |
| | Nikkelverk | | | | 9,234 | | 8,843 | | 18,980 | | 17,378 |
| | | | |
| |
| |
| |
|
| | | | | 117,636 | | 114,703 | | 261,144 | | 224,657 |
| | | | |
| |
| |
| |
|
Copper anodes |
|
|
|
|
|
|
|
|
|
|
| | Horne | | | | 41,199 | | 22,054 | | 84,433 | | 50,321 |
| | Kidd Creek | | | | 17,580 | | 36,276 | | 51,177 | | 73,044 |
| | Altonorte | | | | 67,242 | | 67,917 | | 131,092 | | 109,010 |
| | | | |
| |
| |
| |
|
| | | | | 126,021 | | 126,247 | | 266,702 | | 232,375 |
| | | | |
| |
| |
| |
|
Refined zinc |
|
|
|
|
|
|
|
|
|
|
| | Kidd Creek | | | | 35,918 | | 30,966 | | 64,376 | | 68,901 |
Refined nickel |
|
|
|
|
|
|
|
|
|
|
| | Nikkelverk | | | | 16,099 | | 20,140 | | 34,958 | | 40,703 |
| | Falcondo | | | | 6,871 | | 6,557 | | 14,870 | | 13,444 |
| | | | |
| |
| |
| |
|
| | | | | 22,970 | | 26,697 | | 49,828 | | 54,147 |
| | | | |
| |
| |
| |
|
| Primary aluminum | | | | 61,642 | | 61,178 | | 122,862 | | 122,304 |
| Fabricated aluminum | | 45,796 | | 36,660 | | 88,184 | | 73,585 | | |
| Refined lead | | | | 28,240 | | 23,322 | | 53,388 | | 47,788 |
| Refined gold — 000 ounces | | | | 266 | | 293 | | 535 | | 563 |
| Refined silver — 000 ounces | | | | 10,236 | | 7,028 | | 20,359 | | 15,696 |
NORANDA INC.
SALES VOLUMES & REALIZED PRICES
| |
| |
| |
| | Six Months ended June 30
|
|---|
| |
| | Second Quarter
|
|---|
Metal Sales (tonnes, except as noted)
|
|---|
| | 2004
| | 2003
| | 2004
| | 2003
|
|---|
| | 100% basis,
except as noted
| |
| |
| |
| |
|
|---|
| Copper | | | | | | | | | | |
| | Copper business | | | | | | | | | | |
| | | CCR | | | | 65,686 | | 48,608 | | 150,672 | | 95,762 |
| | | Kidd Creek | | | | 13,930 | | 21,522 | | 36,720 | | 50,240 |
| | | Horne — (concentrates) | | | | 11,338 | | 5,643 | | 15,190 | | 7,905 |
| | | Antamina — (concentrates) | | (33.75%) | | 18,500 | | 18,656 | | 35,951 | | 40,111 |
| | | Collahuasi — (concentrates) | | (44%) | | 30,390 | | 30,594 | | 49,365 | | 60,471 |
| | | Collahuasi | | (44%) | | 11,114 | | 9,250 | | 17,028 | | 17,765 |
| | | Lomas Bayas | | | | 12,746 | | 14,817 | | 28,681 | | 29,395 |
| | | Altonorte — (anodes) | | | | 43,567 | | 33,308 | | 98,664 | | 62,969 |
| | | | |
| |
| |
| |
|
| | | | | 207,271 | | 182,398 | | 432,271 | | 364,618 |
| | Nikkelverk | | | | 11,464 | | 16,139 | | 24,661 | | 30,609 |
| | | | |
| |
| |
| |
|
| | | | | 218,735 | | 198,537 | | 456,932 | | 395,227 |
| | | | |
| |
| |
| |
|
Zinc |
|
|
|
|
|
|
|
|
|
|
| | Copper business | | | | | | | | | | |
| | | Kidd Creek | | | | 33,675 | | 28,361 | | 60,200 | | 63,878 |
| | | Antamina — (concentrates) | | (33.75%) | | 19,931 | | 31,033 | | 34,150 | | 46,433 |
| | | | |
| |
| |
| |
|
| | | | | 53,606 | | 59,394 | | 94,350 | | 110,311 |
| | Zinc business | | | | | | | | | | |
| | | Brunswick/Matagami — (concentrates) | | | | 70,997 | | 86,104 | | 145,131 | | 164,131 |
| | | | |
| |
| |
| |
|
| | | | | 124,603 | | 145,498 | | 239,481 | | 274,442 |
| | | | |
| |
| |
| |
|
| Nickel | | | | 18,025 | | 20,562 | | 36,143 | | 40,952 |
| Ferronickel | | | | 7,808 | | 6,455 | | 14,585 | | 12,991 |
Aluminum |
|
|
|
|
|
|
|
|
|
|
| | Primary aluminum — shipments | | | | 65,680 | | 63,528 | | 126,425 | | 123,380 |
| | Norandal — shipments | | | | 45,796 | | 36,660 | | 88,184 | | 73,585 |
Lead |
|
|
|
29,263 |
|
26,446 |
|
50,474 |
|
44,915 |
Gold — 000 ounces |
|
|
|
225 |
|
213 |
|
461 |
|
449 |
Silver — 000 ounces |
|
|
|
|
|
|
|
|
|
|
| | CCR | | | | 10,193 | | 6,308 | | 19,519 | | 15,390 |
| | Kidd Creek | | | | 1,143 | | 1,553 | | 2,147 | | 2,757 |
| | Antamina | | (33.75%) | | 655 | | 435 | | 1,078 | | 1,010 |
| | | | |
| |
| |
| |
|
| | | | | 11,991 | | 8,296 | | 22,744 | | 19,157 |
| | | | |
| |
| |
| |
|
Average Realized Prices — ($U.S. per pound, except as noted) |
|
|
|
|
|
|
|
|
|
|
| | Copper | | | | 1.27 | | 0.75 | | 1.21 | | 0.76 |
| | Nickel | | | | 5.76 | | 3.87 | | 6.32 | | 3.85 |
| | Ferronickel | | | | 5.85 | | 3.78 | | 6.29 | | 3.71 |
| | Zinc | | | | 0.51 | | 0.40 | | 0.52 | | 0.40 |
| | Aluminum | | | | 0.81 | | 0.67 | | 0.81 | | 0.67 |
| | Lead | | | | 0.40 | | 0.24 | | 0.41 | | 0.24 |
| | Gold — (US$ per ounce) | | | | 394.71 | | 344.27 | | 399.24 | | 350.58 |
| | Silver — (US$ per ounce) | | | | 6.41 | | 4.58 | | 6.37 | | 4.70 |
Exchange Rate (US$ = Cdn$) |
|
|
|
0.74 |
|
0.71 |
|
0.75 |
|
0.69 |
NORANDA INC.
SEGMENTED INFORMATION
(US$ millions)
| | Second Quarter 2004
| |
|---|
| | Copper
| | Nickel
| | Zinc
| | Aluminum
| | Other
| | Total
| |
|---|
| Revenues | | $ | 853 | | 436 | | 110 | | 241 | | 54 | | $ | 1,694 | |
| | |
| |
| |
| |
| |
| |
| |
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | Cost of operations | | | 187 | | 158 | | 48 | | 110 | | 36 | | | 539 | |
| | Purchase of raw materials | | | 474 | | 111 | | 37 | | 97 | | 30 | | | 749 | |
| | Depreciation, amortization and accretion | | | 60 | | 31 | | 15 | | 10 | | 10 | | | 126 | |
| | |
| |
| |
| |
| |
| |
| |
| | | $ | 721 | | 300 | | 100 | | 217 | | 76 | | $ | 1,414 | |
| | |
| |
| |
| |
| |
| |
| |
| Income (loss) generated by operating assets | | $ | 132 | | 136 | | 10 | | 24 | | (22 | ) | $ | 280 | |
| | |
| |
| |
| |
| |
| |
| |
| Interest expense, net | | | | | | | | | | | | | | (36 | ) |
| Corporate and general administration | | | | | | | | | | | | | | (15 | ) |
| Research, development and exploration | | | | | | | | | | | | | | (12 | ) |
| Minority interest in earnings of subsidiaries | | | | | | | | | | | | | | (64 | ) |
| | | | | | | | | | | | | |
| |
| Income before undernoted | | | | | | | | | | | | | $ | 153 | |
| Tax expense | | | | | | | | | | | | | | (58 | ) |
| Other income | | | | | | | | | | | | | | 12 | |
| | | | | | | | | | | | | |
| |
| Net income | | | | | | | | | | | | | $ | 107 | |
| | | | | | | | | | | | | |
| |
| | Second Quarter 2003
| |
|---|
| | Copper
| | Nickel
| | Zinc
| | Aluminum
| | Other
| | Total
| |
|---|
| Revenues | | $ | 494 | | 306 | | 89 | | 171 | | 52 | | $ | 1,112 | |
| | |
| |
| |
| |
| |
| |
| |
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | Cost of operations | | | 154 | | 167 | | 61 | | 96 | | 24 | | | 502 | |
| | Purchase of raw materials | | | 250 | | 49 | | 40 | | 58 | | 24 | | | 421 | |
| | Depreciation, amortization and accretion | | | 51 | | 38 | | 16 | | 10 | | 12 | | | 127 | |
| | |
| |
| |
| |
| |
| |
| |
| | | $ | 455 | | 254 | | 117 | | 164 | | 60 | | $ | 1,050 | |
| | |
| |
| |
| |
| |
| |
| |
| Income (loss) generated by operating assets | | $ | 39 | | 52 | | (28 | ) | 7 | | (8 | ) | $ | 62 | |
| | |
| |
| |
| |
| |
| |
| |
| Interest expense, net | | | | | | | | | | | | | | (36 | ) |
| Corporate and general administration | | | | | | | | | | | | | | (14 | ) |
| Research, development and exploration | | | | | | | | | | | | | | (12 | ) |
| Minority interest in earnings of subsidiaries | | | | | | | | | | | | | | (18 | ) |
| | | | | | | | | | | | | |
| |
| Loss before undernoted | | | | | | | | | | | | | $ | (18 | ) |
| Tax recovery | | | | | | | | | | | | | | 23 | |
| Restructuring costs | | | | | | | | | | | | | | (11 | ) |
| Other expense | | | | | | | | | | | | | | (4 | ) |
| | | | | | | | | | | | | |
| |
| Net loss | | | | | | | | | | | | | $ | (10 | ) |
| | | | | | | | | | | | | |
| |
NORANDA INC.
SEGMENTED INFORMATION
(US$ millions)
| | Six Months ended June 30, 2004
| |
|---|
| | Copper
| | Nickel
| | Zinc
| | Aluminum
| | Other
| | Total
| |
|---|
| Revenues | | $ | 1,697 | | 917 | | 195 | | 445 | | 93 | | $ | 3,347 | |
| | |
| |
| |
| |
| |
| |
| |
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | Cost of operations | | | 382 | | 298 | | 82 | | 213 | | 31 | | | 1,006 | |
| | Purchase of raw materials | | | 936 | | 233 | | 68 | | 173 | | 50 | | | 1,460 | |
| | Depreciation, amortization and accretion | | | 108 | | 63 | | 33 | | 19 | | 20 | | | 243 | |
| | |
| |
| |
| |
| |
| |
| |
| | | $ | 1,426 | | 594 | | 183 | | 405 | | 101 | | $ | 2,709 | |
| | |
| |
| |
| |
| |
| |
| |
| Income (loss) generated by operating assets | | $ | 271 | | 323 | | 12 | | 40 | | (8 | ) | $ | 638 | |
| | |
| |
| |
| |
| |
| |
| |
| Interest expense, net | | | | | | | | | | | | | | (61 | ) |
| Corporate and general administration | | | | | | | | | | | | | | (28 | ) |
| Research, development and exploration | | | | | | | | | | | | | | (19 | ) |
| Minority interest in earnings of subsidiaries | | | | | | | | | | | | | | (143 | ) |
| | | | | | | | | | | | | |
| |
| Income before undernoted | | | | | | | | | | | | | $ | 387 | |
| Tax expense | | | | | | | | | | | | | | (144 | ) |
| Other income | | | | | | | | | | | | | | 17 | |
| | | | | | | | | | | | | |
| |
| Net income | | | | | | | | | | | | | $ | 260 | |
| | | | | | | | | | | | | |
| |
| | Six Months ended June 30, 2003
| |
|---|
| | Copper
| | Nickel
| | Zinc
| | Aluminum
| | Other
| | Total
| |
|---|
| Revenues | | $ | 965 | | 590 | | 176 | | 342 | | 95 | | $ | 2,168 | |
| | |
| |
| |
| |
| |
| |
| |
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | Cost of operations | | | 320 | | 310 | | 113 | | 186 | | 42 | | | 971 | |
| | Purchase of raw materials | | | 479 | | 111 | | 83 | | 118 | | 44 | | | 835 | |
| | Depreciation, amortization and accretion | | | 103 | | 67 | | 29 | | 21 | | 21 | | | 241 | |
| | |
| |
| |
| |
| |
| |
| |
| | | $ | 902 | | 488 | | 225 | | 325 | | 107 | | $ | 2,047 | |
| | |
| |
| |
| |
| |
| |
| |
| Income (loss) generated by operating assets | | $ | 63 | | 102 | | (49 | ) | 17 | | (12 | ) | $ | 121 | |
| | |
| |
| |
| |
| |
| |
| |
| Interest expense, net | | | | | | | | | | | | | | (74 | ) |
| Corporate and general administration | | | | | | | | | | | | | | (27 | ) |
| Research, development and exploration | | | | | | | | | | | | | | (20 | ) |
| Minority interest in earnings of subsidiaries | | | | | | | | | | | | | | (34 | ) |
| | | | | | | | | | | | | |
| |
| Loss before undernoted | | | | | | | | | | | | | $ | (34 | ) |
| Tax recovery | | | | | | | | | | | | | | 29 | |
| Restructuring costs | | | | | | | | | | | | | | (41 | ) |
| Other expenses | | | | | | | | | | | | | | (4 | ) |
| | | | | | | | | | | | | |
| |
| Net loss | | | | | | | | | | | | | $ | (50 | ) |
| | | | | | | | | | | | | |
| |
QuickLinks
NORANDA REPORTS QUARTERLY EARNINGS OF US$107 MILLIONCONSOLIDATED RESULTSCONSOLIDATED BALANCE SHEETSCONSOLIDATED STATEMENTS OF CASHFLOWSPRODUCTION VOLUMESSALES VOLUMES AND REALIZED PRICESSEGMENTED INFORMATION
