Exploration company Arcon has reported a net loss of €14.7 million in 2002, an improvement on the €15.6 million loss in the previous year.

Announcing its results to the end of December, Arcon chief executive Mr Kevin Ross said the company had managed to increase its production rates and reduce its losses despite the very depressed global metals environment.

He said that Arcon had achieved a significant improvement in operational performance during the year, with production of 660,000 tonnes of ore and 45,000 tonnes of waste.

The higher production rates triggered higher costs, up to €21.3 million from €18.5 million. The main cost factors were the increase in the number of staff, and higher electricity and insurance costs, the company said.

The company restructured its balance sheet to reduce its total level of indebtedness in 2002. This has resulted in the significant reduction in its debt-servicing costs.

Last year the group raised €28.8 million from a rights issue.

The funds from the rights issue have been used partly to fund the exploration programme on several projects close to the Galmoy mine.

One of these, R Zone, has proved to be the most significant discovery since the original one in 1986, according to the company, doubling the contained metal content of the mine, Mr Ross said. He estimated that the gross value of the metal in this zone was about $400 million (€358 million).