1997/8 was a difficult but constructive year.

Profit after tax and abnormals of $63.3 million was marginally below the previous year’s $64.7 million; however this result was assisted significantly by an abnormal gain of $23.7 million. At $39.6 million, profit after tax and before abnormals reflected lower production volumes and higher costs during the second half, as we implemented a comprehensive program to improve the competitiveness of existing operations.

The economic downturn in a number of Asian economies continues to create uncertainty in product and equity markets in our region and wider afield.

With production facilities in Australia and Europe, and customers in some 45 countries, Pasminco performed well in 1997/8 in terms of aggregate sales compared with the previous year.

Perceptions about future demand, however, depressed world prices for our products despite the fact that global zinc and lead demand continue to exceed supply.

Amid the year’s volatile economic conditions, our break-even zinc price increased to US$998/tonne from US$934/tonne.

Our top priority and expectation for the current year is to reduce this key measure by lifting production and revenue and driving down costs. The development projects outlined in this report will assist these objectives.

The completion of the Century acquisition in September 1997 opened major opportunities for the company.With a world-class cost structure, Century will reduce our dependence on existing mines and give us more flexibility in their operations and has the potential to contribute significantly to shareholder value. Your Board welcomes the support given by shareholders and banks to the Century fund-raising program. The project is ahead of schedule and under budget.



Your Board is confident of the strong underlying value of Pasminco’s business and its future potential. In the climate of uncertainty created by the Asian downturn, we are disappointed that current share prices do not appear to recognise fully the underlying value of many resources companies, including our own.

As an integrated, focused zinc and lead producer and supplier, we will continue to seek opportunities to add to our asset base through exploration, acquisition and internal growth. Our objective is to ensure that all assets in the portfolio are among the world’s most competitive.

The outlook is for improved production performance and lower costs. Global supply-demand remains in deficit, and with London Metal Exchange inventories falling, metal prices are considered to have potential for improvement.

In conclusion, we extend our thanks to all Pasminco’s employees. Ours is a tough, performance-oriented business and we wish
to acknowledge the significant contribution of our people who thrive in this environment.

Click here to download PDF files of:

- Operations at a Glance (excerpt from Annual Report 1998)
- Production 5-Year Summary (excerpt from Annual Report 1998)
- Performance 10-Year Summary (excerpt from Annual Report 1998)

or

- Pasminco Annual Report 1998 (full report including the above excerpts)


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